Enion has abused its dominant position on the electricity distribution market – decided the President of UOKiK and imposed on the undertaking a fine amounting to over PLN 7 million for restriction of competition

The abuse of a dominant position is a frequent tool of competition violation, applied by entrepreneurs operating in sectors, where access to infrastructure is of top priority; moreover the infrastructure cannot be duplicated or its duplication is not profitable. Anticompetitive practices consist mainly in attempts to eliminate the competitors and to prevent other entrepreneurs from entering the market. Its perfect example is the energy sector in which the process of liberalisation takes place and its aim is to ensure unrestrained competition between undertakings operating on the market. One of its elements was to enable final recipients to choose freely between electricity providers. Since 2004 all enterpreneurs have been enjoying the possibility. Since 2007 it has been available also to consumers.

The proceedings against Enion – the largest supplier and co-owner of the energy distribution network, inter alia in Małopolska – were instituted due to a complaint lodged by an independent energy provider in this area – Electrabel – using Enion’s infrastructure to supply its contractors with energy.

The proceedings of UOKiK confirmed the claimant’s motion and revealed that, until 2007, Enion had imposed onerous agreement terms and conditions on its contractors while enjoing a monopoly within the market of energy distribution. The applied rules for settlement of entrepreneurs using the network of energy distribution exposed them to financial loss. Simultaneulsy by applying unlawful practices, when selling energy, Enion could offer its customers better conditions than its contractors on the distribution market, and the competitors on the sales market – such as Electrabel. According to UOKiK, Enion hindered the freedom to choose the seller of the energy and thus impeded the development of competition on the market.

Another practice questioned by UOKiK concerned the system of compulsory financial guarantees introduced by Enion. In the case of lack of financial guarantees, the company threatened its contractors to suspend the performance of the agreement on distribution. The Office questioned the obligation to furnish a financial guarantee only unilaterally for Enion, although the risk of lack of current settlements and losing liquidity concerned both parties to the agreement. Such practice constitutes abuse of a dominant position on the market, pursuant to legal regulations, including the principle of equal consideration, the duties and rights of parties to an agreement should be equal.

The financial penalty for violation of competition law amounts up to 10% of entrepreneur's revenue obtained in the year preceding the issuance of the decision. In this case, a fine amounting to PLN 7,301,865 was imposed, A mitigating circumstance is the fact that illegal practices were ceased in 2007.

It is not the first fine imposed on Enion by UOKiK. In September 2009, the President of the Office decided that the entrepreneur restricted the possibility of lodging a complaint against defective devices indicating the electricity consumption. Energy companies were also punished for the abuse of a dominant market position – inter alia Enea for charging the recipients an illegal double licence fee for January 2008.

The decision is not final. The entrepreneur has lodged an appeal to the Court of Competition and Consumer Protection.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl