The Spanish National Commission on Markets and Competition (CNMC) has imposed a fine of €5.08 million on UFD Distribución Electricidad, S.A., the electricity distribution subsidiary of the Naturgy Group, for restricting competition in the market for the installation of certain electricity metering equipment. The infringement occurred between May 2018 and May 2021 and has been classified as a very serious violation of competition law.
The CNMC emphasised that companies holding a dominant position are subject to a heightened duty of responsibility not to distort competition, not only in the market they dominate but also in closely related markets. Under Spanish and EU competition law, conduct that lacks a valid regulatory basis and is capable of producing exclusionary effects may constitute an abuse of dominance, regardless of whether the conduct was intentional.
According to the authority’s findings, UFD adopted an incorrect interpretation of the applicable regulatory framework by extending an obligation designed for domestic electricity meters to certain types of industrial meters, specifically type 3 and type 4 meters. UFD considered that these meters also had to be fully integrated into the distributor’s own remote management and telemetering systems, despite the absence of a legal requirement to that effect.
This interpretation led UFD to impose requirements not предусмотрed by the regulatory framework and to deny or delay the installation and activation of metering equipment owned by independent metering service providers and industrial customers. As a result, alternative operators were effectively excluded from the market, and customers’ ability to choose competing service providers was significantly reduced.
Although UFD corrected its internal interpretation of the regulation in May 2021, the CNMC concluded that the restrictive effects on competition during the preceding period were substantial and sufficient to establish an infringement. The authority considered that the conduct materially affected market dynamics and hindered effective competition in a market closely linked to UFD’s core distribution activities.
The investigation was triggered by complaints lodged by Axon Time, S.L. and Enerlin Ingenieros, S.L., which alleged anticompetitive practices by UFD. In April 2023, the CNMC carried out dawn raids at two premises of the Naturgy Group, and in November 2023 it formally opened sanctioning proceedings against UFD.
In addition to the financial penalty, the CNMC imposed a temporary prohibition on UFD from contracting with the public sector throughout Spain for a period of four months. This restriction applies to public works, supply, and service contracts related to the installation and commissioning of electricity metering equipment at low-voltage supply points affected by the conduct, except where UFD is legally required to provide such services under sector-specific regulation.
The CNMC also imposed a series of compliance and transparency obligations on UFD. The company is required to activate third-party telemetering equipment that has already been installed, to allow the installation and activation of new equipment at the request of customers when permitted by law, and to ensure that all installations covered by the regulatory framework are duly authorised. UFD must further inform the owners of the affected supply points of these obligations and publish the relevant information on its website.
The CNMC noted that the decision may be challenged before the National High Court (Audiencia Nacional) through a contentious-administrative appeal within two months from the day following notification of the resolution.