In March 2017, the French Competition Authority (“FCA”) closed an investigation into an abuse of dominant position by the French gas supplier Engie after accepting proposed commitments. Engie did not contest the findings of the FCA and requested a settlement procedure, under which it received a fine of €100 million. The investigation was opened following a complaint lodged by Direct Energie, a new entrant in the natural gas market. Direct Energie claimed that Engie abused its dominant position in the gas supply markets by cross-subsidizing its market offerings with its regulated tariffs, as well as by indulging in predatory pricing in tenders organized by small and mid-sized firms.
Compass Lexecon provided economic advice to Engie. We supported Engie in the design of commitments ensuring, through a series of ex-ante and ex-post price-cost tests, that there would be no cross-subsidization between the regulated and non-regulated offerings market segment and no predatory pricing.
The Compass Lexecon team included David Sevy, Frederic Palomino, Guillaume Duquesne, Aleksandra Khimich, Thibaut De Bernard, Jaime Coronado and Anastasia Tseomashko.