Neelie Kroes
Member of the European Commission responsible for Competition Policy

Introductory remarks at press conference on Choline Chloride cartel and EDP/ENI/GDP merger decisions

Press conference
Brussels, 9 December 2004

Opening remarks

I am here today to present two important decisions which the Commission has taken this morning on the basis of my proposals.

In my hearing at the European Parliament, I likened my role to that of a football referee. I know that some people had doubts that someone who is passionate about business and knows it inside out could act with the impartiality and sense of fair play needed. A few went further and suggested that I would hold back from taking tough action against businesses that violate the competition rules because I was "too close to business interests", that I would be some kind of "pussy cat".

The two competition decisions taken by the Commission today are hard evidence to the contrary. I said I would blow the whistle when needed - today you see that commitment put into practice.

The first decision imposes fines on three companies - Akzo Nobel, BASF and UCB - for price fixing and market sharing in the choline chloride market. Fines totalling € 66.34 million have been imposed. This is clear proof that as Competition Commissioner, I will be steadfast in applying zero tolerance to those who operate cartels to the disadvantage of customers. The Commission will simply not tolerate that the benefits of the EU's Single Market are denied to customers by cartels and other anti-competitive practices. We will not allow the advantages of abolishing physical frontiers and creating pan-European markets to be neutralised by companies carving up the spoils amongst themselves. I have made it crystal clear that the fight against cartels will be one of my top priorities as Competition Commissioner. This decision demonstrates that I intend to walk the walk as well as talk the talk.

The second decision prohibits the joint acquisition by EDP (the incumbent Portuguese electricity company) and ENI, of GDP, the incumbent Portuguese natural gas company. This merger would have been bad for Portuguese consumers and bad for the competitiveness of Portuguese industry. It would have undermined the benefits of energy liberalisation, and excluded new entrants from the Portuguese markets. It would have meant higher prices for retail and business customers and put Portuguese industry at a competitive disadvantage.

The Commission must ensure that consumers benefit from more effective competition, in terms of choice of supplier and lower prices, following mergers. Effective competition on their home market also ensures that suppliers are efficient and better able to penetrate other markets. Ensuring effective competition in newly-liberalised markets such as energy is a priority for me, to prevent companies clubbing together to neutralise the effects of new market access.

I would like to stress that this decision:

• has been very carefully considered;
• is based on a very thorough investigation and an in-depth economic analysis of the case and;
• is shared almost unanimously by the Competition Authorities of the Member States.

Prior to the decision, we held very frank and constructive negotiations with the Portuguese Government and in particular with the Portuguese Minister for Energy Mr Baretto, with whom I spoke personally on two occasions.

But the parties were not in a position to offer appropriate remedies to meet the Commission's concerns that the most credible potential entrants in the markets concerned would be excluded and that the merged company would enjoy a quasi-monopoly in the Portuguese energy market.

In the absence of adequate remedies, the Commission was therefore obliged to prohibit this operation.

I am now happy to answer any questions.