The European Commission (EC) is keen to stamp down any measures which raise barriers to trade within the single market of the EU. This includes territorial restrictions on resale.
One species of such restrictions includes those imposed by dominant suppliers on their customers, and in the past the EC has proceeded against a number of energy suppliers which have used such terms. The most recent example is its case against Bulgarian Energy Holding (BEH), the incumbent state-owned vertically-integrated energy company in Bulgaria.
The EC announced on 12 August 2015 that it has provisionally found that the majority of electricity supply contracts entered into between BEH and traders stipulate that electricity supplied by BEH may only be resold within Bulgaria or may only be exported. The contracts also contain control and sanctioning mechanisms which allow BEH to monitor and punish customers who fail to comply with these territorial restrictions. This could be an abuse of BEH’s dominant position.
This case is of importance to dominant companies and customers of such companies in the EU, whatever the sector. Customers can protect themselves against dominant companies using such a provision in a number of ways, including initiating court action and making a complaint to the EC or a national competition regulator.