LPG market under scrutiny: Competition Protection Agency investigates potential collusion among four LPG providers

The Slovenian Competition Protection Agency (the "Agency") initiated an investigation into a potential restrictive agreement or concerted practices among four energy companies: Butan plin, d.d., INA Slovenija, d.o.o., Istrabenz plini d.o.o. and Plinarna Maribor d.o.o. The Agency has reasons to believe that the companies breached Article 6 of the Prevention of the Restriction of Competition Act and Article 101 of the Treaty on the Functioning of the European Union by agreeing to only accept the returns of their own liquefied petroleum gas ("LPG") cylinders.

Facts known so far

The Agency suspects that the companies mutually agreed not to accept any LPG cylinders over which the other companies have proprietary rights, with the aim of sharing the market and allocating consumers among themselves. The Agency mentioned that three of those companies, Butan plin, d.d., Istrabenz plini d.o.o. and Plinarna Maribor d.o.o., also adopted general conditions which prohibit end-sellers and consumers from transferring possession of the LPG cylinders. Moreover, the Agency finds it problematic that the cylinders are handed over to consumers against payment of a refundable deposit for which they are issued a deposit certificate. Upon returning the companies' cylinders, the full deposit is only refunded if the consumer presents a valid deposit certificate.

According to the Agency such certificates inevitably get lost and consumers can no longer return the cylinder and get their full deposit refunded. Consequently, the Agency believes that consumers will be reluctant to change their LPG provider and will stay with the current one. This was likely the parties' objective, the Agency claims, which indicates the intention to share the market and allocate consumers. Market sharing, however, usually leads to higher prices for consumers.

Comment

In general, any agreements or concerted practices aimed at or having the effect of preventing, restricting or distorting competition in Slovenia are prohibited. The main idea behind company-owned instead of customer-owned cylinders is to allow companies to take effective control and responsibility for cylinder safety. In the case of company-owned cylinders, refundable deposit systems (and vouchers given as a receipt for the original deposit) are rather standard in the LPG market. More details regarding any potential infringements are yet to follow and the Agency is currently asking all interested parties to forward them any information they may have which could be relevant for the investigation. All things considered, the investigation shows that the Agency remains vigilant to any anti-competitive conduct despite the COVID-19 pandemic.

This article was first published on International Law Office.