At the end of January 2006, after dramatic price rises since the previous October, the Bundeskartellamt instituted abuse proceedings against seven national gas providers on suspicion of their charging end consumers abusively excessive prices.

The providers concerned are

-  E.ON Thüringer Energie AG,

-  E.ON Avacon AG (Saxony-Anhalt),

-  RWE Westfalen-Weser-Ems AG,

-  MITGAS Mitteldeutsche Gasversorgung GmbH,

-  SpreeGas GmbH,

-  ENTEGA Vertrieb GmbH & Co. KG and

-  An independent company of Thüga AG.

A nationwide survey on gas prices conducted by the Bundeskartellamt and the competition authorities of the Länder at more than 700 gas providers had identified price differences of more than 40 per cent between the least and the most expensive providers. In addition to the proceedings instituted by the Bundeskartellamt (which is competent for 29 gas providers) the competition authorities of the Länder have instituted more than 80 proceedings against providers falling under their competence. Private consumers had not only complained about the high prices but also, and above all, about the fact that they were not free to switch gas providers.

Bundeskartellamt President Dr Böge stated: “The freedom of choice of consumers is one of the principles of our free economic and social system. Thanks to our abuse proceedings we were able to arrive at a rapid solution. If consumers have an effective opportunity to switch providers this will stimulate competition in general. Such an approach is therefore superior to price abuse control which always has to relate to a specific competition law violation.”

The companies named above have now undertaken in writing to offer private customers the possibility to switch providers from 1 April. E.ON has given this commitment on behalf of all its affiliated companies. As a consequence, the Bundeskartellamt decided today to discontinue the proceedings.

The possibility to change provider runs under the rubric “provision”, a market-opening regulation which is already applied in the telecommunications sector and electricity market. This practically involves a “triangular relationship”. The private end consumer concludes a supply contract with the new supplier, who in turn buys the gas from an established local network operator on the basis of a “provision” contract.

President Böge stated: “Admittedly, this solution is no cause for euphoria. The provision scheme only serves as an interim solution until an effective entry-exit system is in place for household customers which allows the alternative gas provider non-discriminatory transmission through the network of the local network operator. The Federal Network Agency expects such an entry-exit system to start on 1 October 2006. But the effect of the interim solution is that the private end consumer now has the possibility to choose another gas provider. Better possibilities to switch providers should ultimately be reflected in lower prices.”