The National Markets and Competition Commission (CNMC) announced on Friday a fine of 5.08 million to UFD Distribución Electricidad, SA (belonging to the Naturgy Group) for restricting competition in the market for the installation of electric meters between May 2018 and May 2021.
This is a “very serious” breach of the Competition Protection Act and Article 102 of the Treaty on the Functioning of the EU. According to Concurrence, “the UFD misinterpreted” that the obligation to integrate all meters in the domestic segment into the distributor’s remote management systems “was also applicable to certain types of meters in the industrial segment (types 3 and 4)”.
According to Concurrence, “between 2018 and 2021, the UFD carried out an inappropriate interpretation of the regulations which made it difficult for other companies to install certain electricity meters”. “Although the company corrected this interpretation in May 2021, the market effects were significant.”
This conduct resulted in the imposition of requirements not provided for in the regulations and the refusal or delay in the installation and activation of measurement equipment owned by other measurement service companies and industrial customers.
Competition emphasizes that “the dominant position of the UFD requires it to be particularly responsible not to affect competition in the market”.
The investigation began following a complaint against Naturgy from two companies specializing in energy efficiency, Axon Time, SL and Enerlin Ingenieros, SL, for possible practices contrary to competition rules. In April 2023, the CNMC carried out inspections at two headquarters of the Naturgy group and initiated a sanction procedure in November 2023.
The organization recalls that competition law requires that companies in a dominant position are particularly responsible for not restricting competition either in the market they dominate or in related markets. And “conducting actions without regulatory protection that have the capacity to produce exclusionary effects will be abusive, regardless of the intentionality of the conduct.”
The UFD will be prohibited from contracting with the public sector throughout the national territory for a period of 4 months. The ban concerns contracts for works, supplies and services linked to the market for the installation of electrical measuring equipment and their provision at the low-voltage supply points affected by the behavior, except when the UFD is obliged to do so in accordance with sector regulations.
The Naturgy distributor must also activate telemetry equipment belonging to third parties already installed and allow the installation and activation of new ones at the request of the customer; allow the installation of electrical measuring equipment covered by the regulations; and inform the owners of the refueling points concerned and publish the new obligations on their website.
The CNMC recalls that a contentious-administrative appeal can be filed directly against this resolution before the National Court within two months from the day after its notification.
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