Eon must pay hefty fine for cartel agreement

A European court has upheld the legitimacy of slapping a fine on German energy giant Eon and French GDF Suez for illegal gas supply agreements. But it lowered the initial fine because of procedural mistakes. German energy giant Eon and French utility company GDF Suez will have to pay a fine of 320 million euros ($403 million) each because of illegal bilateral supply agreements, a Luxembourg court affiliated to the European Court of Justice ruled on Friday. An original fine of 553 million euros as called for by the European Commission\'s anti-trust authorities was lowered by over 230 million euros in recognition of procedural mistakes made in the course of investigations, particularly relating to the duration of the illegal agreements between the two utility firms. But the court upheld the legitimacy of the fine as such, confirming that Eon and GDF Suez had created artificial conditions for keeping energy prices high. Long way to justice Back in the 1970s, the two companies were responsible for building the Megal long-distance gas pipeline designed to carry gas from Russia to both Germany and France. Eon and GDF Suez reached a dubious agreement at the time not sell that gas on the home market of the respective partner country, thus preventing genuine price competition. Both energy suppliers had appealed against the original fines as imposed by the European Commission in 2009. No immediate comment was available from the companies after Friday\'s court ruling.