The Impact of EU’s Competition Laws on the Long-Term Gas Contracts

Competion laws follow varions goals including economic targets such as increase of economic efficiency and consumers' welfare. This branch of law has resisted against agreements and contracts which endanger the consumers' or public welfare and has tried to prevent such contracts and processes. European Union is among the greatest consumers and importer of energy in the world. The most part of the gas consumed in EU is provided from outside and therefore the outlook of supply and transport of energy to the critical paths of lits industrial and economic sectors has become a major concern in EU. On the other hand, through imposing competition laws, EU is pursuing to develop a fair competitive structure among economic actors and production institution and by controlling anti-competion behaviour has prevented the formation of cartels and monopoles, and thus avoided damage to the public interests. One of the most important sectors which witnessed many disputes is the sale of gas to EU through long term contracts. Sometimes, conditions are inserted in the contracts which contrablicts competition laws in EU. Europe is willing to organize a common uniform energy market inside EU to support the consummers' rights and assurance of supply of the needed energy.In this paper, we are going to identify the EU envisaged anti-competition conditions through analysis of EU's long term gas sale contracts. Furthermore we will explore the impact of EU's regulations on the insertion of such conditions in the contracts.The subjects that will be covered are: Destination Cluse, Oil Price Indexation, Take or Pay and Resale Restrictions. It is very important to note that application of anti- trust laws is time specific and thus undergo countinuos change. A legal action today might be an anti competition activity tomorrow. JEL Classification: K12, K21, K32, F23, F53. Keywords: European Union, Competition laws, gas contracts, gas contract conditions, destination clauses, Take or Pay and Resale Restriction