French Competition Authority fines ENGIE €100 million for abusing its dominant position on the French retail gas supply market

• 24/03/2017
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On 22 March 2017, the French Competition Authority (“FCA”) fined ENGIE (formerly known as GDF-Suez) €100 million for abusing its dominant position on the retail gas supply market by using the customer database and business infrastructure it inherited from its former monopoly status in order to promote its market-based gas and electricity contracts.

ENGIE is the former monopoly holder on the French gas supply market where it continues to hold a dominant position. Even following market diversification, ENGIE carries on a public utility function of selling contracts at a state regulated price to certain eligible customers. In parallel, it offers market-based gas and electricity contracts in competition with new market entrants. ENGIE has only a limited share of the separate, though related, electricity supply market. 

In its decision, the FCA found that ENGIE abused its dominant position on the retail gas supply market for residential and small non-residential customers by employing the resources it held as a result of its former state monopoly to bolster its separate competitive activity of selling gas and electricity supply contracts at market price. Specifically, ENGIE used historical information from a database, which listed customers eligible for state regulated prices, to sell its competitive contracts to private individuals and small business customers. This database gathered together almost the totality of French natural gas customers. In addition, ENGIE used the business structure developed to carry out its public utility function in order to contact consumers and offer them market-based contracts for gas and electricity. Both the database and the business structure were impossible for competitors to reproduce at a reasonable cost or within a reasonable time, according to the FCA. Additionally, the FCA found that ENGIE used a misleading sales tactic by telling consumers that the security of its gas supply was superior to that of its competitors.

ENGIE did not contest the findings of the FCA and requested the matter be dealt with under the settlement procedure. In its decision the FCA noted that the opening of the natural gas market to competition created a situation in which ENGIE may not have been immediately aware of its obligations under competition law given its former monopoly status. According to the FCA, the resulting uncertainty could be regarded as mitigating the gravity of some of the findings. The settlement procedure led to a fine amounting to €100 million. It also confirmed the interim measures taken by the FCA on 9 September 2014 which imposed on ENGIE an obligation to give its competitors access to part of its customer database.