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With the reduction of gas and electricity prices, it is necessary to stop the excessive increase in tariffs for consumers. In addition, price increases should be banned until the end of 2023 – unless the supplier can prove “that the increase is objectively justified,” according to federal government bills that have been submitted to the Bundestag.

The Ministry of Economy explained on Saturday that the control of abuses is to prevent price increases that cannot be justified by rising procurement costs. Not every increase is automatically illegal, but an increase is “offensive and unjustified”.

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The planned cuts in gas and electricity prices by the Traffic Lights Coalition are intended to mitigate the sharp rise in prices for households and businesses. Some consumption must be subsidized by the state, but current high market prices continue to apply. FDP energy expert Michael Kruse told the Bild newspaper (Saturday): “We want to prevent free rider effects that encourage utilities to pay higher tariffs.” The brakes are due to take effect from March 2023, but a retrospective relief is planned from January.

Many households are now receiving tariff increase letters for 2023. This often happened at the end of the year, the representative of the Ministry of Economy explained. The reason is legal timing: if the price increase occurs in early January, it will need to be announced four to six weeks in advance. As regards the amount, the actual purchase costs can be transferred but cannot be further inflated.

Therefore, it should not be allowed that in the future price increases could occur simply because “the state still bears the costs through the price limit.” According to the spokesman, this would be offensive and should be avoided. According to the ministry, customers generally have to fulfill their contractual obligations. In case of disagreement about the validity of a claim, consumers can contact consumer protection centers or obtain other legal advice.

During the trial, the company must prove that there was no abuse.

The planned “abuse ban” on price brakes is aimed at labor prices, i.e. into cents per kilowatt-hour, which are reflected in the annual bill depending on consumption. “The energy price multiplied by your annual consumption is added to the base price and thus results in your annual bill amount,” the Federal Grid Agency said in a clarification.

In the event of possible litigation before the Federal Cartel Office, the following should apply: it is not for the agency to prove that there was abuse, but for the company that it was not. The Anti-Cartel Authority should be able to order suppliers to stop abuse or pay monetary penalties. Economic benefits should also be removed, the ministry explained. The planned abuse provisions should be applied in addition to the general antitrust and competition law instruments already in place. (day/day/mbo)