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Czechs fine RWE $11 mln for hurting competition

RWE AG, the German utility that controls more than 80% of the Czech Republic's natural-gas business, will be fined 240 million koruna ($11.2 million) for violating competition rules, the largest penalty ever levied on a single company by the Czech antitrust competition office.

The fine was reduced from an initial 370 million koruna levied on RWE's Czech unit, RWE Transgas AS, last August, the Czech Anti-Monopoly Office said today on its Web site. It reduced the fine after RWE cooperated to rework the contracts that constituted the violations, the Brno-based office said. Transgas imports about 99.5% of all Czech gas. The German utility controls Transgas and six of the country's eight regional gas distributors. The regulator said RWE's contracts with the two distributors it didn't control were discriminatory, making it hard for them to compete with RWE units.

The violations occurred from November 2004 through August 2006 and hurt the market at the time it was opening to competition, the regulator said. „The behavior” of RWE „is seen even more serious as it occurred at the beginning of the liberalization of the gas industry in the Czech Republic,” the Anti-Monopoly Office said. It occurred in a market where „any discrimination by the dominant player can slow down or endanger the start of the positives that are linked with liberalization.”

RWE Transgas said in an e-mail from Prague it would analyze the verdict before it took further steps. The regulator said the decision cannot be appealed. „We continue to be convinced that our actions in 2005 made no harm to the market,” RWE said. The two distributors not controlled by RWE are Prazska Plynarenska AS and Jihoceska Plynarenska AS, operating in the capital city, Prague, and in the south of the country. The Czechs started to open their gas market to competitors as part of the country's 2004 entry into the European Union. (Bloomberg)