Tallinn Administrative Court dismissed with its judgment of 5 June 2015 a complaint filed by AS Tallinna Vesi in the tariff dispute between the company and Estonian Competition Authority. AS Tallinna Vesi applied to the court in 2011, as Estonian Competition Authority did not coordinate the company’s price rise application and issued a precept to AS Tallinna Vesi to bring the effective price in line with the law.
While earlier the price had been agreed in a contract between Tallinn City Government and AS Tallinn Vesi, on 1 November 2010 the Public Water Supply and Sewerage Act entered into force, laying an obligation to coordinate the price on Estonian Competition Authority. According to law, the prices for water services shall be cost-based. Estonian Competition Authority did not coordinate the company’s price application and the company applied to the court.
“The judgment of the Tallinn Administrative Court is most welcome because the consumers have no chance to choose a provider of water services. Without the price regulation, monopolies would earn huge profits. Whereas the average performance of the assets of other regulated monopolies operating in Estonia was 4.7-6.6% during the period 2005-2013, the profitability earned by AS Tallinna Vesi averaged 17.2%. The consumers are not obliged to pay up the unreasonable profitability,” said Märt Ots, Director General of Estonian Competition Authority.
In December 2010, AS Tallinna Vesi addressed a complaint to the European Commission, as well, which rejected the company’s complaint on 14/05/2014. European Commission found that the price regulation applied by Estonian Competition Authority is transparent and this is applied equally towards all businesses.