Long-term Energy Supply Contracts in European Competition Policy: Fuzzy not Crazy

Jean-Michel Glachant () and Adrien de Hauteclocque

No 2009/06, RSCAS Working Papers from European University Institute

Abstract: Long-term supply contracts often have ambiguous effects on the competitive structure, investment and consumer welfare in the long term. In a context of market building, these effects are likely to be worsened and thus even harder to assess. Since liberalization and especially since the release of the Energy Sector Enquiry in early 2007, the portfolio of long-term supply contracts of the former incumbents have become a priority for review by the European Commission and the national competition authorities. It is widely believed that European Competition authorities take a dogmatic view on these contracts and systemically emphasize the risk of foreclosure over their positive effects on investment and operation. This paper depicts the methodology that has emerged in the recent line of cases and argues that this interpretation is largely misguided. It shows that a multiple-step approach is used to reduce regulation costs and balance anti-competitive effects with potential efficiency gains. However, if an economic approach is now clearly implemented, competition policy is constrained by the procedural aspect of the legal process and the remedies imposed remain open for discussion.

Keywords: Long-term supply contracts; Competition Policy; European Union (search for similar items in EconPapers)
JEL-codes: K21 L42 L44 (search for similar items in EconPapers)
Date: 2009-02-02
New Economics Papers: this item is included in nep-com, nep-eec, nep-ene and nep-law
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Long-term energy supply contracts in European competition policy: Fuzzy not crazy (2009)
Working Paper: Long-term Energy Supply Contracts in European Competition Policy: Fuzzy not Crazy (2009)
Working Paper: Long-term Energy Supply Contracts in European Competition Policy: Fuzzy not Crazy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:rsc:rsceui:2009/06

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