EUROPEAN Union regulators stepped up their threat of antitrust action against Germany's E.On AG and France's Gaz de France yesterday over allegations that the two colluded to avoid selling natural gas in each other's home markets.
The European Commission sent the two companies an official complaint and asked them to explain their positions in answer to allegations the two shared out markets between them for gas piped from Russia on the MEGAL pipeline they jointly own. EU officials said this could have kept prices artificially high.
If EU regulators conclude that the companies did break antitrust rules by making an illegal market-sharing agreement, they could face fines of up to 10 percent of annual global turnover for each year of the offense.
An investigation into the two companies' alleged deal was launched last July.
The MEGAL pipeline is the major source of Russian gas for German consumers and the only route for gas piped to France. It crosses southern Germany, bringing gas from the border with the Czech Republic and Austria across to France.
Forty percent of Europe's gas comes from Russia, a reliance that is increasing as gas gains popularity because it releases fewer greenhouse gas emissions than oil and coal.
EU antitrust officials have focused on Europe's energy sector in recent years, claiming that prices are too high and large companies have too much control over energy transport and supply.
Gaz de France also faces another EU probe, launched last month, into whether the company deliberately restricted gas imports into France, a move that would allow it to control prices and limit competition.
The company said from Paris that it "will continue" to cooperate with EU officials in the investigation.
Separately the EU Commission said it was continuing a study on changes proposed by E.On to placate EU concerns over the way it operates in the German electricity markets. EU regulators have said they have concerns that E.On may have abused its dominant market position in Germany by withholding capacity from competitors.