EU Sends Gazprom Statement of Objections for Abuse of Dominance on CEE Markets

The European Commission has sent a statement of objections to Russian gas giant Gazprom alleging that some of its business practices in eight markets in Central and Eastern Europe (CEE), including Bulgaria, constitute an abuse of its dominant market position in breach of EU antitrust rules.

"On the basis of its investigation, the Commission's preliminary view is that Gazprom is breaking EU antitrust rules by pursuing an overall strategy to partition CEE gas markets, for example by reducing its customers’ ability to resell the gas cross-border," the Commission said in a press release, adding that this may have enabled Gazprom to charge unfair prices in certain EU member states.

Gazprom may also have abused its dominant market position on the markets of Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia by making the supply of gas dependent on obtaining unrelated commitments from wholesalers concerning gas transport infrastructure, the Commission also said.

Gazprom now has 12 weeks to reply to the statement of objections and can also request an oral hearing to present its arguments.

"We find that it [Gazprom] may have built artificial barriers preventing gas from flowing from certain Central Eastern European countries to others, hindering cross-border competition. Keeping national gas markets separate also allowed Gazprom to charge prices that we at this stage consider to be unfair," the press release quoted EU Commissioner in charge of competition policy Margrethe Vestager as saying. "If our concerns were confirmed, Gazprom would have to face the legal consequences of its behaviour," she added.

The Commission opened formal proceedings against Gazprom on 31 August 2012.

Gazprom is the dominant natural gas supplier allCEE countries, with market shares well above 50% in most, and in some countries up to 100%.

A statement of objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them and the parties can reply in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments before representatives of the Commission and national competition authorities. The Commission takes a final decision only after the parties have exercised their rights of defence.

There is no legal deadline for the Commission to complete antitrust inquiries into anticompetitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.

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