France’s Competition Authority (the ADLC) is currently investigating the EDF group in relation to four separate matters.
The first, relating to the commercial practices of EDF and some of its subsidiaries in the energy services markets, follows a complaint filed on 17 October 2016 by Xélan. Following this complaint, the ADLC conducted search and seizure operations at the premises of EDF and several of its subsidiaries on 22 and 23 November 2016. This investigation is still ongoing.
The second investigation follows a complaint filed by Engie on 19 June 2017 relating to EDF’s commercial practices regarding retail electricity and gas sales, and specifically the circumstances in which EDF gave electricity suppliers, upon request, access to its file of customers paying the regulated “Green” and “Yellow” tariffs from the end of 2015, when these tariffs were about to be discontinued. Documents collected during search and seizure operations in November 2016 were used in the Engie proceedings. On 27 May 2021 EDF, Dalkia, Dalkia Smart Building, Citelum and Cham were notified of the ADLC’s objections concerning the markets for retail electricity and gas supply, multi-technique management/maintenance and energy optimisation services, and energy control measures leading to issuance of energy savings certificates. The ADLC’s decision is awaited, after a meeting was held before the ADLC’s panel in November 2021.
The third investigation follows an ex-officio referral to the ADLC on 4 November 2019 and concerns the formation of a partnership for heat network operations. On 3 May 2021 EDF, Dalkia, Électricité de Strasbourg, ES Services Energétiques and EDEV were notified of the ADLC’s objections and responded on 16 July 2021. This procedure, which allows both sides to present their arguments, will continue in 2022.
The fourth investigation, relating to EDF’s pricing policy for its electricity supply offers to non-residential customers with a connection capacity of less than 36kVa, follows a complaint by Plüm Energie dated 14 September 2020. This complaint was accompanied by an application for precautionary interim measures, intended to make the ADLC take urgent action. On 18 February 2021, the ADLC rejected Plüm’s application for interim measures. The investigation on the merits of the complaint is ongoing.
Finally, in a decision of 18 January 2022 the ADLC dismissed a complaint and application for interim measures made against EDF by ANODE (the national association of retail energy operators). This complaint concerned EDF’s refusal to provide access to the database of non-residential customers concerned by discontinuation of the “blue” regulated sales tariffs, who were switched automatically to a follow-on market-price contract at 31 December 2020. However the ADLC considered that ANODE’s arguments were not backed up by sufficient evidence proving the existence of the alleged practices. This decision is open to appeal for a one-month period from its notification to the parties.
Should the ADLC conclude in any of these investigations, after examining the merits of the matter, that anti-competitive practices have been involved, the possible penalties in application of Article L. 464-2 of the French Commercial Code include a fine of up to 10% of the Group’s worldwide sales excluding taxes.
A provision was recognised at 31 December 2021.
Financial assets comprise equity instruments (particularly non- consolidated investments), debt securities, loans and receivables at amortised cost, derivative assets (see note 18.7) and cash and cash equivalents (see note 18.2).
The classification and measurement of financial instruments depend on the business model and the instruments’ contractual characteristics. They are carried at amortised cost, fair value through other comprehensive income (OCI), or fair value through profit and loss.
Financial liabilities comprise loans and other financial liabilities, bank credit and derivative liabilities (see note 18.7).
Financial assets and liabilities are recorded in the balance sheet as current if they mature within one year and non-current if they mature after one year, apart from derivatives held for trading, which are all classified as current.
The Group derecognises a financial asset when:
Any interest created or retained by the Group in transferred financial assets is recorded as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are extinguished, cancelled or expire. When a debt is renegotiated with a lender the Group derecognises the debt and recognises a new liability when the new terms are substantially different; otherwise, the book value is recalculated. In either case, the impacts of the debt renegotiation are recorded in profit and loss.
Financial assets comprise debt and equity securities. The accounting treatment applied depends on their contractual characteristics and business model
Financial assets carried at fair value through OCI comprise:
Upon initial recognition, these financial assets are recorded at fair value plus transaction costs attributable to their acquisition.
At each reporting date, they are adjusted to fair value based on quoted prices where possible, or using the discounted future cash flow method or by reference to external sources otherwise. Changes in the fair value of these instruments are recorded directly in OCI with recycling (for debt securities) or OCI with no recycling (for equity instruments) in the income statement.
