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Decision by the Danish Competition Appeal Tribunal - Elsam A/S´ abuse of dominant position by charging unfair prices

14. november 2006

4/0120-8700-0014

On 14 November 2006 the Danish Competition Appeal Tribunal concluded that Elsam A/S had abused its dominant position on the market for wholesale of physical electricity in Western Denmark.

The Competition Appeal Tribunal thereby confirmed parts of the Danish Competition Council decision from November 2005 in which Elsam was found to infringe Section 11(1) of the Danish Competition Act and art. 82 of the Treaty.

The Competition Appeal Tribunal concurred in the opinion that Elsam during the period from 1 July 2003 till 31 December 2004 held a dominant position on the market for wholesale of physical electricity in Western Denmark and that Elsam had abused this position.

The Competition Appeal Tribunal found that through comprehensive and thorough investigations and analysis the Competition Council had at least proven that during said period Elsam had the ability to a certain extend to control the formation of price on the relevant market and that Elsam to a certain extend did so contrary to Section 11(3), cf Section 11(1) of the Danish Competition Act and art. 82 of the Treaty.

However, the Competition Appeal Tribunal annulled parts of the decision from the Competition Council whereby the Council had ordered Elsam not to charge prices on the Nord Pool spot market above the thresholds set out in the order.

The Competition Appeal Tribunal stated that as a starting point price control must be seen as harmful to competition and to the efficiency of the companies. The Competition Appeal Tribunal furthermore stated that the use of price control in accordance with Section 16(1) of the Danish Competition Act requires the existence of specific market conditions without effective competition and without the prospects of effective competition caused by for example clear and sustained market power.

Considering that the relevant market is young and has been and continues to be developing, considering the fact that Vattenfall AB has entered the market and considering the doubts about the use of price control on this market expressed by Energinet.dk and Nord Pool, the Competition Appeal Tribunal did not find sufficient grounds for upholding the price control order issued by the Competition Council.