Exploitation of energy price caps prohibited - Bundeskartellamt starts to build the required organisational structure

The Bundeskartellamt has started preparing its organisational structure by setting up a department for the enforcement of the prohibition to exploit the price caps on gas, electricity and district heating.

Andreas Mundt, President of the Bundeskartellamt: "We are entering a completely new field of activity. The goal here is not to protect competition, but first and foremost to protect tax payers and to prevent companies from raising their prices irrespective of procurement cost increases with the aim to exploit government subsidies. We have started to build the organisational framework we need and will now dedicate ourselves to this important task. This is a challenging task for the Bundeskartellamt, but in these extraordinary times, we need extraordinary measures."

Last week, the German Bundestag passed two laws capping the prices of electricity (StromPBG) and pipeline-based natural gas and heating (ErdgasWärmePBG).

The price caps are intended to ease the burden of gas, heating and electricity price increases on end consumers by capping these prices for a set quota (normally 80 per cent of last year's consumption). Consumers only pay the statutory capped price per kilowatt hour until their quota is used up. As long as consumers do not exceed their quota, they will not have to pay the higher energy prices while the price caps are in force.

The government will compensate energy suppliers for the difference between the contractual energy price per kilowatt hour and the statutory price cap.

The laws on the price caps prohibit exploitation of these rules which are meant to ease the financial burden on consumers (Section 39 StromPBG and Section 27 ErdgasWärmePBG, respectively). In particular, these stipulations are intended to prevent energy suppliers from raising their prices to the end consumer for gas, heating and electricity even though this is not objectively justified by cost increases in an attempt to receive higher government compensation. Any violation can be sanctioned with fines and illegally obtained compensation must be reimbursed. The Bundeskartellamt is in charge of enforcing these stipulations.

Andreas Mundt: "Energy prices have soared in recent months due to the effects of Russia's attack on Ukraine. For this reason, many suppliers have to procure energy at very high prices. Current price increases mainly reflect these cost increases. The government is providing considerable funds to ease the financial burden on consumers and the industry. Should individual companies try to exploit these funds to receive higher or unjustified government subsidies, the Bundeskartellamt will prosecute exploitative practices."

If the authority suspects unjustified price increases, it will initiate an examination within its scope of discretion.

Many members of the civil society have sent requests for a review of price increase notifications for gas, electricity and district heating to the Bundeskartellamt over the recent weeks. However, contrary to reports in some media, the Bundeskartellamt is not the competent authority to look into objections to price increases filed by consumers. It is also incorrect that price increases by energy suppliers are subject to prior clearance by the Bundeskartellamt, as has been publicly assumed in some cases, nor is this included in the new stipulations on price caps for gas, electricity and heating. The Bundeskartellamt will not generally monitor or clear electricity, gas or district heating prices, now or in the future.