The Elsam Saga – Danish Court Ruling on Excessive Pricing in Relation to the Delivery of Electricity (ELSAM III)

In an August 2016 ruling the Danish Maritime and Commercial High Court (So- & Handelsretten) confirmed that the Danish energy incumbent DONG Energy A/S (“DONG”) had infringed Article 102 and the Danish equivalent by charging excessive prices for the delivery of electricity in 2005-06. The judgment pertained to a 2007 decision by the Danish Competition and Consumer Authority (“DCCA”) which had subsequently been challenged by DONG on the basis that DONG was neither dominant nor had acted abusively. In DONG’s view it was merely supplying electricity at market prices and in accordance with commitments agreed with the DCCA in 2003. The case is the first of three inter-related abuse of dominance cases pending before the Danish courts regarding the Danish energy incumbent and its alleged abusive pricing of electricity. The judgment was almost instantly appealed. This comes at little surprise as another of the three cases involves claims for compensation now totaling approximately DKK 8 billion (EURO 1.07 billion). In the light of the magnitude of this compensation claim the legal fees and costs of challenging the underlying abuse cases would appear negligible. The August 2016 ruling is therefore only the first round of a legal battle that is expected to continue for the next couple of years. The case offers an interesting insight into how and how not to apply Article 102 to excessive pricing of electricity, as the DCCA 2007 decision sets out a number of principles in relation to the appropriate legal standards, costs and profits which were all reviewed by the court.