EC invites comment on non-compete clause

14 March 2012

The European Commission is inviting comment from interested parties on whether a reduced scope non-compete agreement between Siemens and Areva continues to infringe anti-trust rules.

The non-compete obligation was originally signed by the two companies in 2001 as they merged their reactor businesses together in a joint venture aimed at winning nuclear new build projects around the world. In 2003 the joint venture secured the contract for the Olkiluoto 3 project in Finland where they started construction on the first EPR – a design which fuses elements of existing French and German reactor fleets. However, things fell apart in 2009 when Siemens decided to abandon the partnership, prompting Areva to buy out the German company's stake of the reactor business known as Areva NP.

As intended, the terms of the non-compete obligation remained in place. Siemens was not allowed to bid for contracts which might bring it into competition with any of Areva NP's core products and services for a period of up to 11 years. The list included "nuclear islands, nuclear services and nuclear fuel assemblies," said the EC, adding that the list also covers some of Areva's non-core products and services - such as conventional islands and certain nuclear components.

Since the potential violation of anti-trust rules was first targeted by the EC in 2010, both companies have worked to resolve issues. The result, announced today, has been a new "reduced scope obligation" which does not cover any of Areva's non-core business activities, and which, for Areva's core areas, is reduced to a period of three years following the dissolution of the joint venture.

Still, the EC remains concerned that the new obligation may yet threaten competition. It has decided to invite comment from other parties as to whether the remedies sufficiently address concerns. Based on these "market tests" it has stated that it may make the obligation legally binding on the companies.

In September last year Siemens announced that it was quitting the nuclear business. Already devoid of its reactor business, this referred primarily to its offering of turbine islands specifically for nuclear power plants, rather than products such as its safety-critical instrumentation and control system technology which can be used in nuclear and non-nuclear power plants alike. Siemens continues to offer conventional systems such as turbines and generators.

Researched and written
by World Nuclear News