At the end of 2023 the Bundeskartellamt initiated proceedings against altogether seven municipal utilities and district heating suppliers on suspicion of abusively excessive price increases in the period from 2021 to 2023. In particular, the Bundeskartellamt is examining the specific use of so-called price adjustment clauses in relation to a total of nine different district heating networks.

Based on its findings to date, the Bundeskartellamt takes the view that its initial suspicion has already been substantiated in the case of four of these networks and that in these cases unlawful price adjustment clauses have been used to the detriment of consumers. The proceedings relating to these four networks will be continued, as will those relating to the other five networks. The suppliers in question will be given the opportunity to comment. For procedural reasons, the Bundeskartellamt will not disclose the names of the companies involved or any other details until the proceedings are finally concluded.

Andreas Mundt, President of the Bundeskartellamt: “District heating suppliers have a monopoly position in their network area. It is not possible for consumers to switch supplier. This is also why district heating suppliers are subject to the prohibition of abusive practices under competition law. Our findings so far already show that the authorities will have to focus more closely on the district heating sector in the future. Although it would be de facto impossible to truly regulate this sector, given the number of networks and the differences between them, concrete legal specifications would be of great help in ensuring long-term, efficient and effective control. We need transparency not only in terms of prices, but especially in terms of the costs incurred by the suppliers; we need clear guidelines on pricing; and we need a stronger competition law abuse control regime in this sector.”

Price adjustment clauses in contracts with private end customers for the provision of district heating are governed by the legal requirements set out in the Ordinance on general conditions for district heating provision (Verordnung über Allgemeine Bedingungen für die Versorgung mit Fernwärme – AVBFernwärmeV). The Ordinance only allows price adjustment clauses which duly take into account both the development of the costs incurred by the supplier in the generation and provision of district heating (“cost element”) and the conditions in the heat market at the relevant time (“market element”). According to the case law handed down by the Federal Court of Justice, the cost element and the market element must generally be given equal weight in a price adjustment clause.

Based on its investigations to date, the Bundeskartellamt has come to the preliminary conclusion that, contrary to what is required by law, the market element has been given too little weight in the case of four networks to the detriment of consumers. The Bundeskartellamt has also found that in the case of three of these four networks, the cost element used in the price adjustment clauses did not accurately reflect the development of the actual costs incurred by the supplier for the generation and procurement of heat in the periods examined. In some cases, for example, cost-reducing components were not taken into account. According to the Bundeskartellamt’s preliminary calculations, the price adjustment clauses examined have overall led to price increases in the relevant periods which were higher than legally permissible.

Irrespective of the Bundeskartellamt’s proceedings, private district heating customers can also always file a civil lawsuit due to alleged violations of the requirements under Section 24(4) AVBFernwärmeV.