17th May 2006 10:21
OFGEM17 May 2006 R/30 WEDNESDAY MAY 17, 2006 GAS AND ELECTRICITY MARKETS AUTHORITY ISSUES STATEMENT OF OBJECTIONS AGAINSTNATIONAL GRID FOLLOWING COMPETITION ACT INVESTIGATION The Gas and Electricity Markets Authority today (Wednesday) issued a Statementof Objections1 against National Grid as part of a Competition Act investigationinto the provision of domestic-sized gas meters. The statement sets out Ofgem's6 proposed findings that National Grid has enteredinto long-term exclusive contracts for the provision of domestic gas meters withenergy suppliers. The contracts are considered to lock suppliers into NationalGrid for a significant share of their gas meter requirements and therebyrestrict the development of competition. Ofgem believes that National Grid'sconduct amounts to an abuse of dominance, which infringes competition law2. Ofgem has given National Grid eight weeks to make written representations on thestatement, with the subsequent opportunity of making oral representations, whichOfgem will take into account before making a final decision. ends Notes to Editors: 1. A statement of objections gives notice of a proposed infringement decisionunder the Competition Act 1998 to the party being investigated. The party (inthis case National Grid) then has the opportunity to make written and oralrepresentations in response to the case set out by Ofgem. It is standardpractice for Ofgem to issue such notices as part of its investigations and noassumption should be made that there has been an infringement of the CompetitionAct 1998. 2. The Gas and Electricity Markets Authority propose to find that National Gridhas infringed the Chapter II prohibition of the Competition Act 1998 and Article82 of the EC Treaty. Ofgem's Authority has concurrent powers with the Office ofFair Trading (OFT) under the Competition Act 1998 (CA98) to investigate and takeenforcement action in relation to suspected infringements of UK and ECcompetition law. 3. The Chapter II Competition Act 1998 prohibits the abuse of a dominantposition in a market by one or more undertakings which may affect trade withinthe UK. Article 82 of the EC Treaty prohibits the abuse of a dominant positionin a market by one or more undertakings which may affect trade between MemberStates. 4. Information about how the Authority applies the CA98 can be found in theCompetition Act 1998 guideline, 'The application in the Energy Sector'. Anelectronic version of this guideline can also be obtained using the link in thefurther reading section. Guidance issued by the OFT on the CA98 can be obtainedfrom the following website: www.oft.gov.uk 5. Third parties who may wish to comment on Ofgem's proposed findings areinvited to submit a written request for a non-confidential version of theStatement of Objections to Caroline Ormond ([email protected]) atOfgem by 5pm on 31 May 2006. Ofgem will consider such a request in accordancewith the Office of Fair Trading's guidance on "Involving third parties inCompetition Act investigations" (OFT 451). 6. Ofgem is the Office of the Gas and Electricity Markets, which supports theGas and Electricity Markets Authority, the regulator of the gas and electricityindustries in Great Britain. Ofgem's aim is to bring choice and value to all gasand electricity customers by promoting competition and regulating monopolies.The Authority's powers are provided for under the Gas Act 1986, the ElectricityAct 1989 and the Utilities Act 2000. For further press information contact: Richard Hunt: 0207 901 7158 or 07818457969 Mark Wiltsher: 020 7901 7006. Out of hours contact: 07766 511470 or 07774728971 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
National Grid