Price Caps in the Energy Sector Do Not Mean Tolerance of Cartels, Says Petr Mlsna, Chairman of the Office for the Protection of Competition

2022-09-15
The Office for the Protection of Competition (hereinafter referred to as "the Office") understands the necessity of capping energy prices, but, at the same time, warns that it will not tolerate price coordination and other anti-competitive practices in energy markets.

"The price cap does not mean that the energy traders can coordinate their prices in any way, and it is not intended to facilitate or encourage undertakings to engage in price agreements or other anti-competitive practices," said Petr Mlsna, the Chairman of the Office for the Protection of Competition, in connection with the price caps.

At its meeting on 12 September 2022, the Government decided to introduce price caps on electricity and gas prices for households and individuals engaged in business. The aim of this measure is to reduce the impact of high energy prices on these entities, and, thus, limit the negative impact of the development of market conditions on energy markets.  

From a competition perspective, price capping is considered to be a significant interference with the normal functioning of the market, as it restricts free pricing, and, thus, affects the operation of the market mechanism, but in many cases, as in this case, it is completely justified. However, the Office stresses that price caps set a maximum price not the only possible price. Electricity and gas suppliers are therefore free to compete freely and will undoubtedly be able to set a price below the price cap despite this measure.  At the same time, the introduction of a price cap should not affect existing consumers who have contracted prices for electricity and gas below the price cap.

The Office therefore points out that it will continue to monitor developments in the energy markets and will be ready to take firm action against any distortions, restrictions or exclusion of competition in these markets.

 Press Unit of the Office for the Protection of Competition
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