1. Introduction

Christopher Decker, Modern Economic Regulation: An Introduction to Theory and Practice (Cambridge University Press 2015) 227, 283; Simonetta Zarrilli, ‘Multilateral Rules and Trade in Energy Goods and Services: The Case of Electricity’ in Janusz Bielecki and Melaku G Desta (eds), Electricity Trade in Europe – Review of the Economic and Regulatory Changes (Kluwer Law International 2004) 255; WTO, Council for Trade in Services, Energy Services – Background Note by the Secretariat (09 September 1998) S/C/W/52, [5, 25, 39]; Winfried Rasbach, Unbundling-Regulierung in der Energiewirtschaft: Gemeinschaftsrechtliche Vorgaben und deren Umsetzung in die deutsche Energierechtsordnung (C.H. Beck 2009) 34.

This book focuses on the transport of electricity and gas through transmission networks, i.e. the long-distance transport of natural gas through high-pressure pipelines and the long-distance transport of electricity on the extra high-voltage and high-voltage interconnected system. In contrast, local or regional distribution networks are not specifically addressed.

EU energy legislation uses the following definition (for the electricity sector): A VIU is defined as ‘an electricity undertaking or a group of electricity undertakings where the same person or the same persons are entitled, directly or indirectly, to exercise control, and where the undertaking or group of undertakings perform at least one of the functions of transmission or distribution, and at least one of the functions of generation or supply of electricity’; see Article 2 No. 21 of Directive 2009/72/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (13 July 2009) OJ 2009/L 211/55. For the gas sector, see Article 2 No. 20 of Directive 2009/73/EC of the European Parliament and of the Council concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (13 July 2009) OJ 2009/L 211/94.

See, for example, Decker (n 1) 142, 178–179. In several EU competition law proceedings, the abuse of dominant position was said to derive from the vertically integrated nature of energy companies; see European Commission, Commission Decision relating to a proceeding under Article 82 of the EC Treaty and Article 54 of the EEA Agreement (18 March 2009) Case COMP/39.402 – RWE Gas Foreclosure, [50]; European Commission, Commission Decision relating to a proceeding under Article 82 of the EC Treaty and Article 54 of the EEA Agreement (26 November 2008) Cases COMP/39.388 – German Electricity Wholesale Market, COMP/39.389 – German Electricity Balancing Market, [87]; European Commission, Commission Decision relating to a proceeding under Article 102 TFEU and Article 54 of the EEA Agreement (29 September 2010) Case COMP/39.315 – ENI, [90].

See Agreement Establishing the World Trade Organization (15 April 1994) 1867 U.N.T.S. 154.

WTO, General Agreement on Trade in Services (15 April 1994) 1869 U.N.T.S. 183.

Energy Services – Background Note by the Secretariat (n 1) [3, 7]; WTO, Council for Trade in Services, Energy Services – Background Note by the Secretariat (12 January 2010) S/C/W/311, [5, 79].

Günter Knieps, Wettbewerbsökonomie: Regulierungstheorie, Industrieökonomie, Wettbewerbspolitik (3rd edn, Springer 2008) 21ff; Jürgen Kühling, Sektorspezifische Regulierung in den Netzwirtschaften (Energie- und Infrastrukturrecht vol 4, C.H. Beck 2004) 37.

Günter Knieps, ‘Wettbewerb auf den Ferntransportnetzen der deutschen Gaswirtschaft: Eine netzökonomische Analyse’ (2003) 26 Zeitschrift für Energiewirtschaft 171, 172.

Decker (n 1) 283; D. V Gordon, K. Gunsch and C. V Pawluk, ‘A Natural Monopoly in Natural Gas Transmission’ (2003) 25 Energy Economics 473, 478.

Decker (n 1) 227, 283; Kühling (n 13) 38.

Knieps (n 13) 32.

Piet J Slot and Andrew Skudder, ‘Common Features of Community Law Regulation in the Network-Bound Sectors’ (2001) 38 Common Market Law Review 87, 87.

Ibid [30–32].

European Commission, DG Competition Report on Energy Sector Inquiry (10 January 2007) SEC(2006) 1724, [497].

See, for example, Commission Decision relating to a proceeding under Article 102 TFEU – ENI (n 5) [51–52].

Commission Decision relating to a proceeding under Article 82 TEC – RWE Gas Foreclosure (n 5) [26–27]; Commission Decision relating to a proceeding under Article 102 TFEU – ENI (n 5) [46–48].

DG Competition Report on Energy Sector Inquiry (n 23) [497–498, 502] (for electricity) and [144, 157–159] (for gas). See also Commission Decision relating to a proceeding under Article 102 TFEU – ENI (n 5) [55–60].

DG Competition Report on Energy Sector Inquiry (n 23) [158–159].

Cabau (n 21) [4.3].

Cabau (n 21) [4.3]; Rasbach (n 1) 38.

Rasbach (n 1) 38; Cabau (n 21) [4.2].

This classification is used by the OECD, see for example OECD, ‘Recommendation of the Council Concerning Structural Separation in Regulated Industries’ (C(2011)135 and CORR1 13 December 2011) 2 <http://​www.​oecd.​org/​daf/​competition/​50119298.​pdf> accessed 24 June 2015.

OECD, ‘Restructuring Public Utilities for Competition’ (2001) 53 <http://​www.​oecd.​org/​competition/​sectors/​19635977.​pdf> accessed 20 January 2016.

See Wälde and Gunst (n 3) 187 (who conclude that ‘negotiated access usually proves ineffectual’ in the energy sector).

A third option, the ‘Single Buyer’ model, was only available in the electricity sector and has never been used, see Johnston and Block (n 12) [4.03].

Articles 20(1) and 23(2) of Directive 2003/54/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (26 June 2003) OJ 2003/L 176/37; Articles 18(1) and 25(2) of Directive 2003/55/EC of the European Parliament and of the Council concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC (26 June 2003) OJ 2003/L 176/57.

Article 6 of Regulation (EC) No 715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (13 July 2009) OJ 2009/L 211/36; Article 6 of Regulation (EC) No 714/2009 of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (13 July 2009) OJ 2009/L 211/15.

Article 32(2) of Directive 2009/72/EC (n 4); Article 35(1) of Directive 2009/73/EC (n 4). In the case of gas, access may also be denied where granting access would (i) prevent TSOs from carrying out public service obligations or (ii) lead to ‘serious economic and financial difficulties’ with take-or-pay contracts.

Kühling (n 13) 359 (who describes third party access rights as the core – ‘Herzstück’ – of network industry regulation).

Cabau (n 21) [4.4]; Wälde and Gunst (n 3) 185.

OECD, ‘Restructuring Public Utilities for Competition’ (n 32) 20ff.

See Wälde and Gunst (n 3) 185.

Ministerial Council of the Energy Community, ‘Decision 2011/02/MC-EnC on the Implementation of Directive 2009/72/EC, Directive 2009/73/EC, Regulation (EC) 714/2009 and Regulation (EC) 715/2009 and amending Articles 11 and 59 of the Energy Community Treaty’ (6 October 2011) <https://​www.​energy-community.​org/​portal/​page/​portal/​ENC_​HOME/​DOCS/​1146182/​0633975AB3B67B9C​E053C92FA8C06338​.​PDF> accessed 8 March 2016.

Council of the European Economic Area, Conclusions of the 42nd meeting of the EEA Council (19 November 2014), [16].

It seems that the Russian unbundling legislation in the electricity sector largely corresponds to the most intrusive unbundling model in the Third Energy Package (ownership unbundling), see Elena Timofeeva, Unbundling in der russischen Elektrizitätswirtschaft im Vergleich zum deutschen und europäischen Energierecht (Veröffentlichungen des Instituts für deutsches und europäisches Wirtschafts-, Wettbewerbs- und Regulierungsrecht der Freien Universität Berlin vol 34, Peter Lang 2012) 157; Anatole Boute, Russian Electricity and Energy Investment Law (Law in Eastern Europe, Brill 2015) 216ff. Given that the ownership unbundling model in the EU’s Electricity Directive is not mandatory, one commentator concluded that ‘Russia goes further in the liberalization of its electricity market than do some member states in the EU’, Boute (n 45) 217.

Government of Canada, ‘Electricity Infrastructure: About Electricity’ (2014) <http://​www.​nrcan.​gc.​ca/​energy/​electricity-infrastructure/​about-electricity/​7359> accessed 13 September 2016.

WTO, Trade Policy Review – Report by the Secretariat – China – Revision (12 August 2008) WT/TPR/S/199/Rev.1, 122.

WTO, Trade Policy Review – Report by the Secretariat – Japan – Revision (06 May 2015) WT/TPR/S/310/Rev.1, [4.95]; Ministry of Economy, Trade and Industry of Japan, ‘Electricity Market Reform in Japan’ (2013) 10–11 <http://​www.​meti.​go.​jp/​english/​policy/​energy_​environment/​electricity_​system_​reform/​pdf/​201311EMR_​in_​Japan.​pdf> accessed 7 September 2016.

Article 122 of the Republic of Peru, Electric Concessions Law (Ley de Concesiones Eléctricas) (19 November 1992) Decree Law No. 25844, as amended.

WTO, Trade Policy Review – Turkey – Report by the Secretariat (19 November 2003) WT/TPR/S/125, 95, 98.

Neelie Kroes, ‘Improving Competition in European Energy Markets Through Effective Unbundling’ (2007) 31 Fordham International Law Journal 1387, 1396–1401.

WTO, Trade Policy Review – Report by Zimbabwe (14 September 2011) WT/TPR/G/252, [106].

See Kühling (n 13) 337ff, 359ff (who identifies unbundling measures as an important ingredient for the regulation of network industries).

See Peter Abegg and others, ‘Entflechtung in Netzsektoren – ein Vergleich’ [2014] Bremen Energy Working Papers No. 19, 30, 35.

Article 7 of Directive 2012/34/EU of the European Parliament and of the Council establishing a single European railway area (21 November 2012) OJ 2012/L 343/32 (in its unamended form).

European Commission, The Fourth Railway Package – Completing the Single European Railway Area to Foster European Competitiveness and Growth (30 January 2013) COM(2013) 25 final.

Ibid 4–5.

According to the Commission proposal, the same legal person or persons would not have been allowed to ‘directly or indirectly exercise control …, hold any financial interest in or exercise any right over a railway undertaking and over an infrastructure manager at the same time’. See draft Article 7(2)(a) of the European Commission, Proposal for a Directive of the European Parliament and of the Council amending Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area, as regards the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure (30 January 2013) COM(2013) 29 final, 11. The ‘institutional separation’ would have acted as a default rule in the Commission’s proposal. Member States would have been able to derogate from this general model, if ‘Chinese walls’ were put in place to guarantee the full independence of the infrastructure manager; see draft Article 7(5) in conjunction with draft Articles 7a, 7b and 7c, ibid 12–15.

Directive 2016/2370/EU of the European Parliament and of the Council amending Directive 2012/34/EU as regards the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure (14 December 2016) OJ 2016/L 352/1.

See Articles 7, 7a, 7b, 7c and 7d of Directive 2012/34/EU (n 56), as amended by Directive 2016/2370/EU (n 60).

Abegg and others (n 55) 23–30.

Article 13a of Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (07 March 2002) OJ 2002/L 108/7, as amended by Directive 2009/140/EC of the European Parliament and of the Council amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services (25 November 2009) OJ 2009/L 337/37.

OECD, ‘Report on Experiences with Structural Separation’ (2012) 68ff <http://​www.​oecd.​org/​daf/​competition/​50056685.​pdf> accessed 24 June 2015.

European Union, Treaty on European Union (consolidated version) OJ 2012/C 326/13.

European Union, Treaty on the Functioning of the European Union (consolidated version) OJ 2012/C 326/47.

Article 5(1) and (2) TEU (n 67).

Ibid [86, 106].

Pielow, Brunekreeft and Ehlers (n 70) 103–105; Pielow and Ehlers (n 70) 261–262. This fact was also emphasized in the context of the subsidiarity requirement (Article 5(1) TEU), see Stefan Storr, ‘Die Vorschläge der EU-Kommission zur Verschärfung der Unbundling-Vorschriften im Energiesektor’ [2007] Europäische Zeitschrift für Wirtschaftsrecht 232, 236–237.

See Müller-Terpitz and Weigl (n 74) 353ff; Christian Koenig, Kristina Schreiber and Kristin Spiekermann, ‘Defizitäres Entflechtungsregime? Eine kritische Analyse der Entflechtungsvorschriften in dem Entwurf des dritten Liberalisierungspakets der Kommission der Europäischen Gemeinschaften’ [2008] Netzwirtschaften & Recht 7, 9; Bernd Holznagel and Pascal Schumacher, ‘Großer Eingriff, k(l)eine Wirkung – Die Pläne der Kommission zur eigentumsrechtlichen Entflechtung der Energienetzbetreiber’ [2007] Netzwirtschaften & Recht 96, 100; Kim Talus and Michaël Hunt, ‘Ownership Unbundling: What End to the Saga?’ in Dirk Buschle, Simon Hirsbrunner and Christine Kaddous (eds), European Energy Law: Droit européen de l'énergie (Dossier de droit européen vol 22. Helbing Lichtenhahn 2011) 35–37; Kim Talus and Angus Johnston, ‘Comment on Pielow, Brunekreeft and Ehlers on “Ownership Onbundling”’ (2009) 2 Journal of World Energy Law & Business 149, 151–152. See also Jürgen F Baur, Kai U Pritzsche and Stefan Klauer, Ownership Unbundling: Wesen und Vereinbarkeit mit Europarecht und Verfassungsrecht (Veröffentlichungen des Instituts für Energierecht an der Universität zu Köln vol 121, Nomos 2006) 57–58; Baur and others (n 70) 19–20 (who are critical of the ECJ’s case-law but appear to come to the same conclusion).

See references cited in footnote 21, Chap. 3.

See Sect. 3.​3.

See Sect. 3.​4.

Gerechtshof Amsterdam, Eneco Holding N.V. v. Staat der Nederlanden, Judgment (1 November 2016) 200 175 864/01; Gerechtshof Amsterdam, Delta N.V. v. Staat der Nederlanden, Judgment (1 November 2016) 200 176 186/01; Gerechtshof Amsterdam, Delta N.V. v. Staat der Nederlanden, Judgment (25 July 2017) 200 176 186/01.

For some (in most cases cursory) analysis of this issue, see Matthias Schmidt-Preuß, ‘Die Kontrolle des Verkaufs bzw. des Erwerbs von Netzen (Erwerb durch Nicht-EU-Ausländer gem. §4b EnWG; Außenwirtschaftsrecht; Fusionskontrolle)’ in Jürgen F Baur, Peter Salje and Matthias Schmidt-Preuß (eds), Regulierung in der Energiewirtschaft: Ein Praxishandbuch (2nd edn. Carl Heymanns Verlag 2016) [77ff, 88–90]; Arnoud Willems, Jung-ui Sul and Yohan Benizri, ‘Unbundling as a Defence Mechanism Against Russia: Is the EU Missing the Point?’ in Kim Talus and Piero L Fratini (eds), EU – Russia Energy Relations (Euroconfidentiel 2010) 233–237; Michaël Hunt, ‘Ownership Unbundling: The Main Legal Issues in a Controversial Debate’ in Bram Delvaux, Michaël Hunt and Kim Talus (eds), EU Energy Law and Policy Issues (1st edn. Euroconfidentiel 2008) 73–85; Jörg Gundel and Claas F Germelmann, ‘Kein Schlussstein für die Liberalisierung der Energiemärkte’ [2009] Europäische Zeitschrift für Wirtschaftsrecht 763, 769–770.

Some academic contributions address selected and limited aspects of the EU’s unbundling legislation from the perspective of international economic law, see Thomas Cottier, Sofya Matteotti-Berkutova and Olga Nartova, ‘Third Country Relations in EU Unbundling of Natural Gas Markets: The “Gazprom Clause” of Directive 2009/73 EC and WTO Law’ in Dirk Buschle, Simon Hirsbrunner and Christine Kaddous (eds), European Energy Law: Droit européen de l'énergie (Dossier de droit européen vol 22. Helbing Lichtenhahn 2011); Willems, Sul and Benizri (n 83); Anatole Boute, ‘Energy Trade and Investment Law: International Limits to EU Energy Law and Policy’ in Martha M Roggenkamp and others (eds), Energy Law in Europe – National, EU and International Regulation (3rd edn. Oxford University Press 2016) [3.43–3.47; 3.63–3.65].

Victor van Hoorn, ‘“Unbundling”, “Reciprocity” and the European Internal Energy Market: WTO Consistency and Broader Implications for Europe’ (2009) 1 European Energy and Environmental Law Review 51, 70.

Caroline Van den bergh, ‘Reciprocity Clause and International Trade Law’ (2009) 27 Journal of Energy & Natural Resources Law 228, 256.

See Schmidt-Preuß (n 83) [97] (who discards the relevance of the GATS with respect to the unbundling and unbundling-related measures solely on the basis of an alleged lack of specific commitments and inadequate classification of energy services).

Denis Pinchuk and Nerijus Adomaitis, Gazprom takes on Lithuania in EU policy test case (Reuters 2012); Gazprom, Gazprom seeks international arbitration against Lithuanian Government (2012); Permanent Court of Arbitration, ‘OAO Gazprom v. The Republic of Lithuania’ (no date) <https://​pcacases.​com/​web/​view/​47> accessed 14 September 2016. See also the description in European Court of Justice, ‘Gazprom’ OAO, Opinion of Advocate General Wathelet (4 December 2014) C-536/13 [35–36].

WTO, ‘European Union and its Member States – Certain Measures Relating to the Energy Sector’ (3 December 2015) <https://​www.​wto.​org/​english/​tratop_​e/​dispu_​e/​cases_​e/​ds476_​e.​htm> accessed 13 April 2016.

See in this regard also Moritz Wüstenberg, ‘An Overview of the Dichotomy between EU Energy Market Liberalisation and the Multilateral Trading System: Case Review of WTO Case DS476 – Certain Measures Relating to the Energy Sector’ (2016) 22 International Trade Law & Regulation 8, 17–18.

See Sect. 6.​1.