German electricity and gas distribution networks are governed by concession contracts. Among other entitlements, such contracts grant the holder of a concession the right to build and operate a network and to make use of the related public roads and infrastructure. Local municipalities issue concession contracts within a competitive process, which reflects the idea of ‘competition for the field’. In this paper, we give an introductory description of the German concept of ‘concession contracts’ and its legal implications with respect to electricity and gas distribution networks. We also show how such contracts respond to difficulties identified by economic research in the field of public utilities and long-term, relational and incomplete contracts. The objective is to shed light on this way of governing energy distribution networks and to draw benefits from the results for current and future principles of European network regulation.