European Union antitrust regulators imposed a combined fine of more than €1.1 billion ($1.54 billion) on German utility E.ON and Gaz de France Suez today for secretly carving up gas markets.
The European Commission, the EU's antitrust watchdog, fined each company €553 million for agreeing in 1975 not to compete with one another on their national gas markets when they jointly built a pipeline to import Russian gas.
"They maintained the market-sharing agreement after European gas markets were liberalised, and only abandoned it definitely in 2005," the Commission said in a statement.
"This decision sends a strong signal to energy incumbents that the Commission will not tolerate any form of anticompetitive behaviour," EU Competition Commissioner Neelie Kroes said.
The Commission said the fines were the first for an antitrust infringement in the energy sector.
Ms Kroes said the market-sharing agreement had deprived customers of price competition and choice of supplier in two of the largest gas markets in the 27-nation EU.
"The Commission has no alternative but to impose high fines," she said.
GDF Suez said in a statement issued before the ruling that it disagreed with the Commission's conclusions of collusion until 2005 and would appeal against any decision.
"The group also calls attention to the fact that the legal and regulatory context of the time was very different from that of the energy market today," it said.
The biggest Commission fine on a single company was the €1.06-billion penalty imposed on chipmaker Intel in May. Glass maker Saint-Gobain was fined €896 million last year for price fixing.
The biggest cartel fine was the more than €1.3 billion imposed on a group of companies in the European car glass market last November.
Reuters