Cartel authorities examine practice of network use contracts in connection with customers switching to new electricity suppliers (“double contract model”)

18.10.2001

The Bundeskartellamt and the Land cartel authorities have agreed to take concerted action against the anti-competitive effects of the so-called “double contract model”.

An increasing number of cases are coming to the notice of the cartel authorities in which network operators require a customer wishing to change to another supplier to conclude a “dormant” network use contract before commencing the new supply, even though the customer already has an all-inclusive contract (electricity rate inclusive of network use fee) with the new electricity supplier. Since the network operator and the old supplier are nearly always one and the same, this measure is specifically directed at making the change to a new supplier difficult.

The cartel authorities consider such a “double contract model” to be a violation of cartel law if the network operator makes this a compelling precondition for changing suppliers, since it would be forcing a commitment on the part of the customer after switching suppliers, at the expense of the new supplier, which is exactly what is meant to be avoided and which cannot be justified.

The competition authorities are of the opinion that a network use contract which the end customer concludes of his own free will does not give cause for concern.  Alternatively, the network operator can settle all network use issues (e.g. the right to enter the customer’s premises) on the basis of his contractual relationship with the electricity supplier.

Should, in the case of all-inclusive contracts between the new supplier and the end customer, a network use contract between the network operator and the end customer remain in force, even as a “dormant” contract, it may not stipulate a specific network use fee. If the contract with the new supplier is terminated it would still be possible for the customer to be supplied at the general tariff which includes the network use fee.

Some network operators are willing to forgo the double contract model. However, they make this conditional upon network user fees being calculated on the basis of the point-to-point tariff system of the first Associations’ Agreement. In view of the second Associations’ Agreement, which has meanwhile taken effect and is aimed at network use which is not distance-related, such conduct is considered by the cartel authorities to constitute a hindrance to any change to another supplier.

The President of the Bundeskartellamt, Dr Böge, stated: “In the event of any complaints to this effect the Bundeskartellamt and the Land cartel authorities will examine all “double contract models” to determine any anti-competitive effect they might have or any other clauses which violate cartel law. We will not tolerate anti-competitive obstruction to energy transmission in the interest of the consumer.”

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