Sector Inquiry into Submetering of Heating and Water Costs

02.07.2015

The Bundeskartellamt has launched a sector inquiry into the metering and billing of heating and water costs. Submetering services cover the consumption-based metering and billing of heating and water costs in buildings as well as the provision of the necessary metering equipment such as heating costs distributors or water and heat meters.

Andreas Mundt, President of the Bundeskartellamt: "The aim of the sector inquiry is to obtain in-formation about the current market situation and intensity of competition in submetering and to reveal any competition problems. The metering market is concentrated. Apart from small local pro-viders there are very few companies active nationwide. The analysis will focus in particular on market structure as well as the prices for and revenue earned from submetering services.”

The competitive assessment will also take into account that although tenants are not the direct contractual partners of the submetering providers, they bear the main part of the costs. Technical enhancements, e.g. the possibility of remote meter-reading via a radio transmitter, will also be included in the assessment. The assessment will endeavour to establish whether there are any barriers to entry which make the market entry of newcomers difficult. Another aspect of the sector inquiry will be the bargaining power of submetering providers vis-a-vis property owners.

In the inquiry the Bundeskartellamt will consult market participants active in the sector. The criteria used for selecting the companies for the inquiry were size, number of customers and shareholder structure. After evaluating the replies to its structural and quantitative enquiries the Bundeskartellamt will present the results in a report.

General information on sector inquiries:
The Bundeskartellamt may conduct an investigation into a specific sector of the economy if special circumstances suggest that domestic competition may be restricted or distorted (so-called sector inquiry, § 32 e GWB (German Competition Act). It should be noted that this is a sector inquiry and not proceedings against specific companies. Proceedings can follow on after a sector inquiry if there is an initial suspicion that competition rules have been violated.

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