Following an eighteen months’ sector inquiry, the Commission concludes that there are serious competition problems in the energy sector. Both consumers and businesses are losing out because of inefficient and expensive gas and electricity markets. The Commission’s concerns related to high levels of market concentration, vertical integration of supply generation and infrastructure which leads to a lack of equal access to these markets, insufficient investment in infrastructure and possible collusion between incumbent operators leading to market sharing. To adjust these problems, the Commission will not only make full use of its powers under antitrust, state aid and merger control law, it will also strive to improve the regulatory framework for energy liberalisation. [10 January 2007]