PARIS—France's antitrust regulator has ordered power utility Engie SA to change its natural gas prices for non-residential customers to better reflect its costs.

Acting on a complaint filed in October by rival Direct Energie, the regulator, Autorité de la Concurrence, said Engie, formerly known as GDF Suez, didn't reflect all its costs in some of the individual offers made to large companies. The company's price policy could threaten to push rivals out of the market, it said.

Even though the probe isn't complete, the regulator said it found enough evidence to force Engie to change its pricing policy immediately.

"It appeared the Engie offers could in some cases qualified as eviction or predatory prices," Autorité de la Concurrence said in a statement.

The investigation shows how the energy market has become complex since the deregulation of electricity and gas distribution over the last decade. The new regulation lets customers decide whether to remain with former monopolies—Engie for natural gas and Electricité de France SA for electricity—or shift to new suppliers.

The government created regulated fees for residential customers for both Engie and EDF that take into account all the costs plus a "reasonable" profit margin.

Direct Energie, a new utility that operates in France, claimed that Engie was able to take advantage of its dominant position and the guaranteed profits on residential customers to make offers to some large non-residential customers which don't reflect costs, with the aim of driving rivals out of the market.

Engie said it has always respected the gas market's rules and insisted the market is already very competitive. The company said it is considering appealing the Autorité de la Concurrence's decision.

Autorité de la Concurrence can eventually decide to fine Engie for abusing its dominant position. Fines for breaching competition rules can total as much as 10% of a company's overall revenue, but are traditionally significantly lower.

Engie faces another investigation on from Autorité de la Concurrence on its practices toward residential customers that has been going on for two years and could lead to a separate fine.

Write to Inti Landauro at inti.landauro@wsj.com

 

(END) Dow Jones Newswires

May 02, 2016 12:55 ET (16:55 GMT)

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