A joint task force was established comprising teams from E-Control and AFCA (see AFCA’s press release of 18 January 2023). The task force has now presented its interim report in a press conference organised by the two organisations on 27 June 2023.
Electricity and gas are essential to daily life and are also pivotal in ensuring a diverse offering at prices in keeping with the market for many other products. The task of securing effective and competitive energy markets is therefore of utmost economic and social importance. It ensures that energy remains affordable to consumers.
“Any lack of competition has many disadvantages for consumers. Among these is that falling prices on the wholesale market are not fully passed on, or only belatedly, to consumers,” stated Wolfgang Urbantschitsch, Executive Director of E-Control.
“Competition in the Austrian electricity and gas markets has practically stalled in 2022. This is reflected in an obvious decline in switching rates and, above all, in the range of products offered. In our interim report we have analysed the reasons and made proposals to counter these developments,” added interim Director General Natalie Harsdorf-Borsch.
The first interim report provides initial results on:
- Changes in market concentration in the network areas
- Switching and offer behaviour on the consumer electricity and gas markets
- Development of electricity and gas prices to date during the crisis, as well as links between wholesale prices and prices for end consumers
- Development of prices on introduction of the electricity price cap
- Effects of legal uncertainty around price adjustments.
The following issues were among those identified in initial analysis:
- Market concentration has increased in energy markets
- Offers and switching rates have plummeted
- Extreme differences between prices offered to new and existing customers
- Prices for new customers remain at an elevated level that does not reflect wholesale prices
- Prices increased as the electricity price cap came into effect
- Consumers are treated differently depending on region or customer group
- Problematic price adjustment clauses.
AFCA steps up investigations, E-Control intensifies monitoring
On 26 June 2023, the AFCA posted extensive requests for information.
Natalie Harsdorf-Borsch explained what was next for the task force: “We have emphasised from the very beginning that we will take additional steps if our initial investigations show that this is necessary – and it is. Our task force still has a lot to do.”
The mandatory requests for information were sent to the distribution companies of provincial energy suppliers, bigger public utilities and Verbund AG, which is the largest producer of electricity in Austria. These companies cover around 80% of the Austrian electricity market.
E-Control will increase monitoring in the following areas:
- Transparency and reporting requirements
- Elements of general terms and conditions covering the supply of electricity and gas
- Price adjustment clauses
- Instalments on account
- Default supply
- Disconnections.
Legal basis for market inquiries
The AFCA carries out investigations as part of the Energy Task Force within the statutory scope of a sector inquiry (§ 2 para. 1 no. 3 of the Competition Act). A general inquiry into a business sector is conducted if circumstances suggest that competition is restricted or distorted in that business sector. A sector inquiry is not targeted at a single company.
If, during the course of a sector inquiry, an initial suspicion of anti-competitive behaviour is raised, the AFCA will initiate an investigation or file an application for a fine with the Cartel Court. The maximum penalty for infringements of the ban on cartels or the abuse of a dominant position is 10% of group turnover.
The interim report can be downloaded here.