EU issues obligations addressing competition concerns against Gazprom

EU issues obligations addressing competition concerns against Gazprom
European Commissioner Margrethe Vestager © Seb Daly / Web Summit

The EU will impose obligations addressing competition concerns against Gazprom, the Russian state-owned company which is the dominant gas supplier in a number of member states.

The European Commission initially sent a statement of objections to Gazprom, outlining its preliminary view that that the company had broken EU antitrust rules to allow it to charge higher prices in certain member states. Now, the EU has announced a series of new obligations addressing competition concerns against Gazprom.

In particular, the commission alleged that Gazprom attempted to pursue an overall strategy to partition gas markets along national borders in eight member states, including:

  • Hungary;
  • The Czech Republic;
  • Slovakia;
  • Bulgaria;
  • Estonia;
  • Latvia;
  • Lithuania; and
  • Poland.

By doing so, the commission’s vie is that the company may then have been able to charge higher gas prices in the latter five countries on this list.

How will the new obligations address this behaviour?

The new raft of obligations addressing competition concerns against Gazprom seek to comprehensively combat what the EU views as breaches of its antitrust rules, and have been made legally binding.

The new measures include an obligation to remove restrictions on customers reselling gas across borders, and providing Gazprom customers with tools to ensure their gas price fairly represents competitive local markets.

They will also prevent Gazprom from acting on any advantages it may have concerning gas infrastructure, which it may have gained by leveraging its market position in gas supply. The EU can impose fines on the company if it breaches any of these obligations.

How did the commission announce the news?

European Commissioner for Competition, Margrethe Vestager, insisted that the new set of obligations would provide a framework for ensuring that all companies, no matter where they are based, respect European rules on competition.

She stated: “Today’s decision removes obstacles created by Gazprom, which stand in the way of the free flow of gas in Central and Eastern Europe. But more than that – our decision provides a tailor-made rulebook for Gazprom’s future conduct…. [This case] is about achieving the outcome that best serves European consumers and businesses.”

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