Competitve water tariffs in Germany

In its most recent issue, the German refereed journal "Zeitschrift ffentliche und gemeinwirtschaftliche Unternehmen Z" published an article by Frontier staff on the assessment of the competitiveness of water supply tariffs. Under German competition law (GWB), the water supply industry in Germany is exempted from the prohibition to form cartels. Therefore, Germany is characterized by a number of regional - largely municipally owned - water supply monopolies. The L䮤er competition authorities (Landeskartellbehn) are effectively tasked with surveillance of these monopolies with the aim of preventing the abuse of a dominant position. The law in $19(4) GWB designates the "comparable market approach" as the instrument to assess water tariffs. In the face of a number of recently filed investigations against water companies, the article discusses possible implementations of this approach through revenue benchmarking - with reference to relevant experience from England and Wales - and outlines what role this concept could play for tariff reviews in the German water supply industry.