WHAT IS IT

Competition rules are a cornerstone of the Energy Community’s efforts to protect competition and consumer welfare. Competition is also vital to foster economic growth and technological development.

The following conduct is prohibited, insofar as it may affect trade of Network Energy between the Contracting Parties:

1. All agreements and concerted practices which have as their object or effect the prevention, restriction or distortion of competition.
2. Abuse of a dominant position in the market between the Contracting Parties as a whole or in a substantial part thereof.

State aid is generally prohibited unless justified by specific circumstances contributing to remedying market failures. Such prohibition prevents undertakings from gaining a distortive advantage over their competitors, which ultimately has negative effect on consumers.

State aid is a policy tool that encompasses not only direct grants or subsidies, but also covers loans and guarantees, exemptions from fiscal charges and other measures insofar as they meet the following cumulative criteria:

• the beneficiary is an undertaking (i.e., participates in an economic activity),
• the measure grants an economic advantage (which would not have been obtained under normal market conditions),
• the advantage is granted in a selective way,
• the measure is imputable to the State (Contracting Party) and granted through State resources (directly or indirectly),
• the measure distorts or threatens to distort competition,
• has effect on trade.   

The Energy Community acquis on competition and State aid aligns with the rules of the European Union to ensure a level playing field across the whole region.

WHY IT MATTERS

Competition and State aid rules are indispensable when it comes to the development and proper functioning of liberalized energy markets in the Energy Community.

Competitive markets ensure cost-reflective prices, increase choice and promote innovation across the electricity and gas sectors. When market players compete on merit rather than on advantages, consumers benefit through lower bills, varied choices, and more reliable supply. Competition also reduces dependence on dominant incumbents, encourages new entrants and investments, and ensures that scarce public resources are used efficiently.

Whilst antitrust rules pursue the objective of protecting competition on the market for the benefit of consumers, State aid rules aim at preventing distortive public interventions that selectively favour certain undertakings or sectors.

Enforcement of competition acquis is of paramount importance to ensure well-functioning energy markets with consumers’ access to energy at affordable prices.

The Energy Community’s acquis in competition and State aid is enforced at the national level of each Contracting Party.