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German FCO concludes investigation into district heating markets

  • 08/03/2017
  • Articles

The German Federal Cartel Office (“FCO”) has concluded proceedings initiated due to concerns of abusive pricing practices in the district heating markets by accepting commitments offered by the district heating suppliers.

In 2013, the FCO initiated proceedings against seven companies and industry associations in more than 20 different supply areas. Part of the proceedings were already concluded in 2015, when the FCO accepted commitments from Leipzig’s municipal utility to decrease district heating prices by an amount of €8 million per year over a period of five years.

With respect to the remaining proceedings, the FCO made the provisional finding that the district heating suppliers were dominant in the local markets for the supply of heat to consumers and had abused their dominant position by charging excessive prices for heat between 2010 and 2012. According to the FCO, it is particularly problematic that consumers in this market usually do not have the option to switch to an alternative supplier, while switching to a different type of heating is either impossible or a lengthy and expensive process. The FCO agreed to terminate proceedings on the basis of commitments offered by the investigated district heating suppliers. The commitments entail that affected customers will be either compensated or will benefit from future price decreases amounting to approximately €55 million. The FCO’s acceptance of the suppliers’ commitments concludes the remaining pending proceedings.

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