Italian competition watchdog probes Eni’s market share

The Italian authority for market competition (AGCM) announced on Monday that it is investigating Eni for potentially abusing its dominant position in the country’s wholesale natural gas market.

The company allegedly breached the 55% market-share threshold between April 2013 and March 2014. If the investigation confirms this, Eni could be fined up to 1% of its 2013 revenues.

Companies such as Eni, with a wholesale gas market share exceeding 10%, have to calculate and report their market stake annually to the competition watchdog according to rules approved by parliament in 2010. By Italian law no market player can control over 55% of the market, a clause designed to protect competition in the sector.

Eni reported its market share at 54% for the April 2013 – March 2014 year. But the authority is looking into Eni’s decision to exclude three activities from its caluclations. Volumes sold:

• at extraction, rather than at network entry, points;

• with Eni as “default shipper” on behalf of some protected user categories;

• under a deal involving Libyan gas sold by the subsidiary Eni North Africa to GDF SUEZ.

These activities are not explicitly recognised by the law as exceptions, the watchdog said, although being listed in Eni’s calculations as such. The omitted volumes make up a further 2% of the Italian wholesale market, which would push Eni’s actual 2013-2014 market share above the regulatory threshold to 56%.

The investigation is due to close by 31 December. Both AGCM and Eni declined to comment on the matter at the time of going to press.

In 2012, AGCM held investigation into Eni’s alleged abuse of its dominant position on cross-border pipelines in Italy. This prompted the company to offer up a minimum of 5bcm/year from September 2012 to 2017, which depressed gas prices on the PSV curve in 2012 (see EDEM 7 September 2012 and 19 September 2012 ). Riccardo Patrian