Dear Mr O.,
On 23 October 1998 you made a complaint to the European Ombudsman concerning an alleged maladministration in the way the European Commission (DG IV) dealt with the complaint you lodged on 21 October 1994. On 19 November 1998 you sent additional information.
On 14 December 1998, I forwarded the complaint to the President of the European Commission. The Commission sent its opinion on 5 March 1999 and I forwarded it to you with an invitation to make observations, if you so wished. On 12 April 1999, I received your observations on the Commission's opinion. On 18 October 1999 I wrote to the Commission in order to inquire about the situation of your complaint and to ask for additional comments. On 23 November 1999 the Commission sent its additional opinion, which I sent to you on 13 December 1999. On 10 January 2000 you sent me your additional observations.
I am writing now to let you know the results of the inquiries that have been made.
To avoid misunderstanding, it is important to recall that the EC Treaty empowers the European Ombudsman to inquire into possible instances of maladministration only in the activities of Community institutions and bodies. The Statute of the European Ombudsman specifically provides that no action by any other authority or person, like the UK authorities, may be the subject of a complaint to the Ombudsman.
The Ombudsman's inquiries into your complaint have therefore been directed towards examining whether there has been maladministration in the activities of the European Commission.
I apologise for the time it has taken to deal with your complaint.

THE COMPLAINT

According to the complainant, the relevant facts were as follows:
The complainant is a company based in Yorkshire, UK, specialised in "washing" dangerous piles of waste accumulated over decades outside coal mine mouths, and in selling that coal to electricity generators who require coal with those specifications. The complainant lodged on 21 October 1994 a complaint with Directorate General IV (Competition) of the European Commission for an alleged discrimination in coal supply contracts and an abuse of dominant position which were contrary to the Treaty articles (case IV/E-3/35.828). The complainant observed that it had been systematically discriminated against, contrary to Article 63 of the ECSC Treaty, by two power generating companies in the UK, namely National Power and PowerGen which refused to buy the complainant's coal for the same price as they pay for the other coal.
The complainant however alleged that, after 4 years since the complaint was lodged, the Commission has still not taken a decision on this case.
The complainant sent a first letter of dissatisfaction with the progress of the complaint in February 1996, but no action was taken by the Commission, and this despite several meetings with DG IV. The most recent meeting which the complainant had with officials of the Commission took place in May 1998, but still no decision on the case was taken. Meanwhile the complainant spent a lot of time and money in its complaint (preparing reports, attending meetings). The complainant observed that the failure of the Commission to resolve the discrimination had an extremely detrimental effect on its business. A complete file of correspondence with the Commission between October 1994 and September 1998 was annexed to the complaint (a total of 65 letters, of which 49 from the complainant to the Commission and 16 from the Commission to the complainant).

THE INQUIRY

The Commission's opinion
In its opinion, the Commission first expressed its regrets for the fact that more than four years had elapsed since the complaint was lodged and that the procedure has taken longer than anticipated. The Commission gave the following reasons for this inordinate delay, and stated that it dealt extensively with the complaint lodged on 21 October 1994:
This extensive examination was the direct result of both the existence of serious doubts as to the factual background supporting the case the and unprecedented application of the -probably sole - provision of the ECSC Treaty under which the behaviour of the electricity generators could be examined. These complex issues were dealt with without interruption since October 1994, despite a general context of scarcity of human resources and despite the limited interest of the case for the achievement of the aims of the ECSC Treaty.
The Commission first addressed the factual issues of the case: it stated that one party, namely PowerGen, had constantly put forward in its answers to the Commission alleged problems in the quality of the coal produced by the complainant. The Commission had to address this issue in detail since any difference in the quality of the coal would have significant impacts on the appreciation of any price discrimination a buyer may have practised. In order to tackle this issue, the Commission made several requests for information in order to assess the quality of the coal delivered for power generation by the complainant to another generator, National Power.
Another factual issue it that both National Power (NP) and PowerGen (PG) have strongly contested the hypothesis that the complainant could have been in a position to sell and deliver any substantial quantity of coal between 1993 and 1998 when the complainant was engaged in coal washing contracts with British Coal Corporation. Following the emergence of those doubts as to the complainant's ability to supply, the Commission had to enter into a detailed examination of both the procedure adopted by the power generators for concluding coal purchase contracts, and the contractual arrangements the complainant had entered into over the 1993-1998 period. This examination was made even more necessary when the Commission learned, during its investigation, that the complainant had been unable to deliver coal it had sold to NP on a non-CFD basis (i.e. a contract at a price better than the one usually agreed in standard contracts).
The Commission then stated that the issues of law raised by the complaint were on a par with the extensive fact finding it requested: the sole Article quoted in the complaint was Article 86 (new Article 82) EC Treaty. The Commission however came to the view - on is own initiative - that the complainant was an undertaking within the meaning of Article 80 ECSC Treaty and that the sole proper way for dealing with the issues that had been raised was the use of Article 63 ECSC. This assessment was fundamentally contested by the parties involved (the UK government and NP) in their answer to the second preliminary view issued by the Commission: they submitted that the complainant was not "producing" coal since it reclaimed coal from tips that had been created as a result of earlier "coal production". Furthermore, they submitted that the complainant did not pay the levy on coal production provided for in Article 49 ECSC Treaty.
The Commission had to address the issues in the answers in a very detailed manner. Indeed, the conclusion that the complainant was not an ECSC undertaking would have had major consequences on the case both in terms of procedure (EC rules v. ECSC rules) and, far more importantly, in terms of substantive analysis, because an application of Article 86 EC to the behaviour of NP and PG would necessitate the demonstration that they were collectively dominant and that their behaviour constituted an abuse of such position.
The provisional conclusion that the complainant was an ECSC undertaking and that the case ought to be examined under Article 63 ECSC did not facilitate the task of the Commission, because the ECSC Treaty came into force on 25 July 1952 and there has been no example since that date of an application of Article 63 ECSC by the High Authority/Commission.
Therefore the complaint led the Commission to explore a totally new domain and raised issues of law unanswered so far in the case-law of the Court of justice: does Article 63 ECSC apply to the facts of the complaint? What conditions have to be fulfilled for an intervention of the Commission? Is there a "de minimis" threshold under which no action can reasonably be expected ? What is the nature of the recommendation that could be sent to the UK Government in a context where the infringement was committed by private (publicly listed) undertakings?
As a corollary to the unprecedented application of Article 63 ECSC, the Commission had to fill a gap also in terms of procedural rules applicable to the investigation of such a case, which are, under the ECSC Treaty, far less developed than under the EC Treaty. The situation was made even more difficult in a case under Article 63 ECSC where the infringement was allegedly committed by private companies whereas the recommendation ought to be addressed to a Member State. Here again the Commission had to deal with issues unanswered so far, like to what extent did the EC rules give guidance as to the proper way of dealing with a proceeding under Article 63 ECSC?
Finally, the Commission had to deal with the appreciation of a past situation where contractual arrangements between the complainant and British Coal Corporation would not have allowed the former to bid any significant quantity of coal for sale to the power generators. However, some five years later, former employees to British Coal Corporation asserted that the contracts in question could have been modified at any time in a sense favourable to the complainant. It is clear that discrimination can only take place inasmuch dissimilar conditions are imposed upon undertakings in similar positions. A contrario, a finding that the complainant's position was not comparable to that of the other coal suppliers in terms of its ability to deliver coal would probably bar the application of Article 63 ECSC.
The Commission observed that the resolution of these factual and legal questions took place in a general context of scarcity of resources that creates an obligation for the Commission's DG Competition to give priority to some cases and, corollary, to treat some cases at a slower pace. The unit in charge of the case is applying the competition rules of the EC and ECSC Treaties to the energy (including coal, electricity, gas and petrol), water and steel sectors throughout the Union. Amongst these areas of responsibility, the DG Competition decided, on the one hand, to give priority to the electricity and gas sectors that are to be liberalised in the very near future and where immediate action will be necessary in order to guarantee the success of the implementation of Directives 96/92/EC and 98/30/EC. The decision to give priority to these sectors is daily confirmed by the large amount of cases they generate. On the other hand, the DG Competition took into account the fact that the complainant's case is of purely national dimension and that it is of very limited interest for the accomplishment of the goals of the ECSC Treaty in order to assign a lower priority to it.
The Commission finally observed that, notwithstanding this context, the DG Competition will endeavour to make progress on the case within the next few months, and that it will have to adopt a definite view on the complaint in the light of the various elements of fact and of law set out above before coming to a conclusion. The Commission annexed to its opinion also a two pages long description of the chronology of the case since the complaint was lodged, as well as a chronological list of correspondence containing 97 letters, notes and consultations between 21 October 1994 and 28 August 1998.
The complainant's observations
The complainant maintained his complaint and stated that the Commission gave no explanation for the delay in dealing with this case. The complainant further referred to a draft recommendation which the Commission sent to the generators and the UK Government in February 1997 from which it appeared that the Commission accepted the complaint and was willing to take a decision in favour of the complainant. However, the complainant did not understand why over two years later the Commission had still not decided on the case.

FURTHER INQUIRIES

On 18 October 1999 the Ombudsman wrote to the Commission for further inquiries. The Ombudsman referred to the Commission's opinion of 5 March 1999 in which the Commission had observed that the DG Competition would endeavour to make progress on the case within the next few months. Given however that no information had been received, the Ombudsman asked the Commission to inform him whether a final decision had been taken and to comment on the complainant's allegation that since the meeting of May 1998 no further steps had been taken.
The Commission's additional opinion
In its additional opinion, the Commission observed that the last noticeable step in this case was a meeting between the complainant and the Commission on 30 May 1998. As regards the present situation, the Commission stated that it had not yet adopted any formal decision since the complainant and PG have entered into negotiations that should lead to a settlement.
The Commission accepted the complainant's view that a settlement of the case would be the most appropriate solution at this stage since the market situation under which the complainant was allegedly discriminated against radically changed after March 1998, the date on which the contracts for the purchase of coal concluded by PG and NP that were not offered to the complainant expired.
Consequently, the Commission refrained from adopting a formal decision in the present context of the negotiation of a settlement. If the parties fail to reach an agreement, the Commission will revise its position and adopt a definite view on the case.
The Commission stated that it had been trying actively to facilitate the discussions between the complainant and PG, and has met the parties on several occasions since March 1999. The last meeting with representatives from the complainant took place on 3 November 1999, whereas the last meeting with PG occurred in October 1999.
The complainant's additional observations
The complainant observed that, after 4 years of little progress, the Commission had started to take steps to move the case forward. The complainant stated that the Commission played an active role in laying the groundwork for settlement negotiations between the complainant and PG which is the best was for compensating the complainant for past illegalities. Both the complainant and PG agreed that a negotiated settlement would be better than a Commission recommendation. The complainant however rejected the Commission's statement that the market situation radically changed after March 1998, and observed that until today it was still disadvantaged. The complainant also repeated his point that the Commission took many years to deal with this complaint which was a simple case that could have been quickly resolved.
The complainant observed that the Ombudsman would be kept informed if progress is made in the settlement discussions with PG. However, no information was received from the complainant since January 2000.

THE DECISION

The alleged delay of the Commission in taking a decision on the complaint.
1.1 The complainant alleged that, after 4 years since the complaint was lodged on 21 October 1994, the Commission had still not decided on the complaint. The Commission expressed its regrets for the fact that more than 4 years had elapsed since the complaint was lodged, but gave an explanation for the inordinate delay: the Commission observed that the complaint was particularly complex as regards the factual and the legal issues which had to be examined in detail. The Commission further stated that it had to give priority to other cases, more particularly the liberalisation of the electricity and gas sectors, and that the complainant's case had a purely national dimension and was of very limited interest for the accomplishment of the goals of the ECSC Treaty.
1.2 The Ombudsman notes that the present complaint was lodged on 21 October 1994 and that in November 1999, 5 years later, the Commission has still not taken a decision on it. This extraordinary delay in dealing with the complaint can only be justified when the Commission is able to provide an acceptable explanation for it. In the present case the Ombudsman considers that the Commission has provided him with a reasonable justification for the delay. This appears from the following elements:
1.3 In its opinion, the Commission firstly made a reference to the complex factual, legal (EC rules v. ECSC rules, unprecedented application of Article 63 ECSC) and procedural issues which the complaint raised and which required an intensive and in depth investigation from the services of the DG Competition. A detailed description of those complex factual, legal and procedural elements and their consequences on the handling of the complaint is contained in the Commission's opinion.
1.4 The Commission secondly referred to the obligation for the Commission's services to give priority to other cases which were more important like the liberalisation of the electricity and gas sectors and which required immediate action. The Commission further observed that the complainant's case had a purely national dimension and was of very limited interest for the accomplishment of the goals of the ECSC Treaty.
1.5 Next to these elements, it appears from both the annexes to the complaint and the annexes to the Commission's opinion (Annex I: chronology, Annex II: main correspondence) that during the above mentioned period of 5 years, the Commission has been very active in this case since the complaint was lodged. From annex I it appears that on several occasions the complainant was requested to send comments and further information to the Commission, that the Commission took contact with NP and PG as well as with the UK government in order to ask for their comments, and made several inter-service consultations on the matter. Moreover, from Annex II it appears that between 21 October 1994 and 28 August 1998 in total 97 letters, notes and consultations were sent. Furthermore different meetings with the complainant and PG took also place. It finally appeared that the complainant entered into settlement negotiations with PG. The complainant observed that the Commission played an active role in laying down the groundwork for these settlement negotiations.
1.6 From the elements above it appears that the Commission provided the Ombudsman with an acceptable explanation for dealing with the case for a long period of time and therefore no instance of maladministration has been established.
2 Conclusion
On the basis of the European Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the European Commission. The Ombudsman has therefore decided to close the case.
Yours sincerely
Jacob SÖDERMAN