Why is the EC concerned about concentration? Why can large gas companies negotiate contracts with large gas producers?
The EC is not opposed to large companies in general, in particular if they establish themselves as European players (instead of national). However, the EC believes that competition is the best way to ensure diverse sources of energy throughout the EU. A competitive gas market will provide the best incentives to seek and achieve the most efficient outcomes. A competitive market will prevent external providers of gas dominating particular regions within the EU. The EU-wide market will arbitrage prices downwards, thus enabling companies to source gas from the most efficient sources. High levels of concentration combined with barriers to entry and expansion stifle competition and so can inhibit the diversification of energy supply.
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