Cartel Office review can take time
The electricity price stop sign has a catch
12/03/2022, 3:55 p.m
By law, the traffic light government wants to prevent electricity and gas providers from taking advantage of the moment to rip off and increase prices. An examination by the Federal Cartel Office should prevent abuse. According to the FDP, however, a reaction cannot always be direct.
With the gas and electricity price brake, excessive tariff increases for customers are to be put a stop to. In addition, price increases are to be banned until the end of 2023 – unless the supplier can prove “that the increase is objectively justified,” according to draft laws of the federal government that have been introduced in the Bundestag. “It is still possible that suppliers will increase prices in the future, but they have to justify this to the Federal Cartel Office,” said the FDP energy expert Michael Kruse on ntv.
However, this is not an immediate measure against price increases. “The Federal Cartel Office should check the price increase. That will take some time. That means there will not always be an immediate reaction,” says Kruse. He advises consumers to find a cheaper supplier. “The competition remains in force and all providers are under pressure to continue to offer cheap tariffs.” According to Kruse, the FDP is also working on anchoring further measures in the legislative package in order to increase the competitive pressure on energy companies.
Meanwhile, the Ministry of Economic Affairs explained that the abuse control should prevent price increases that cannot be justified by rising procurement costs. Not every increase is automatically illegal, but only increases that are “abusive and unjustified”. The gas and electricity price brake planned by the traffic light coalition is intended to cushion the sharp rise in costs for households and companies. A certain consumption volume is to be subsidized by the state, but current, high market prices continue to apply.
The brakes should take effect from March 2023, but retrospective relief from January is planned. Many households are currently receiving letters with tariff increases for 2023. That has often happened at the end of the year, explained a spokesman for the Ministry of Economic Affairs. The reason is legal deadlines: If price increases are to come at the beginning of January, they would have to be announced four to six weeks in advance. As far as the amount is concerned, actual procurement costs could be passed on, but not further abusive increases. It should therefore be prevented that future price increases could take place simply because “the state bears the costs anyway via the price cap”. That would be abusive and should be avoided, the spokesman said.
“Abuse prohibition” in the price brakes
According to the ministry, customers generally have to fulfill their contractual obligations. In the event of differences of opinion as to whether a claim is justified, consumers can turn to the consumer advice centers or seek other legal advice. The planned “abuse ban” on the price brakes is aimed at the work prices – i.e. the cents per kilowatt hour, which are reflected in the annual bill depending on consumption. “The energy price multiplied by your annual consumption is added to the basic price and thus results in your billing amount on the annual bill,” says the Federal Network Agency in a basic explanation.
In the case of possible proceedings before the Federal Cartel Office, the following should apply: it is not the office that has to prove that abuse has occurred – but the company that this is not the case. The Cartel Office should be able to oblige suppliers to stop abusive behavior or to pay monetary penalties. Economic advantages should also be able to be skimmed off, the ministry explained. The planned abuse regulations should apply in addition to the instruments of general antitrust and competition law that are already in force.