The European Commission announced on May 24 that it has adopted a decision imposing a set of obligations on Russian energy giant Gazprom that address the Commission’s competition concerns and enable the free flow of gas at competitive prices in Central and Eastern European gas markets,
The European Commission’s competition chief, Margrethe Vestager, stressed that all companies doing business in Europe have to respect European rules on competition, regardless of their place of origin.
“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,” Vestager said, adding that it obliges Gazprom to take positive steps to further integrate gas markets in the region and to help realise a true internal market for energy in Europe, while giving Gazprom’s customers in Central and Eastern Europe an effective tool to make sure the price they pay is competitive.
“As always, this case is not about the (national) flag of the company – it is about achieving the outcome that best serves European consumers and businesses. And the case doesn’t stop with today’s decision – rather it is the enforcement of the Gazprom obligations that starts today,” Vestager said.
Gazprom’s Deputy Chairman of the Management Committee Alexander Medvedev hailed the Commission’s decision, saying it amounted to a settlement of the investigation.
“We were always committed to cooperate in good faith in order to find a constructive, mutually acceptable solution in accordance with the established procedure. We believe that today’s decision is the most reasonable outcome for the well- being of the entire European gas market,” Medvedev said in a statement from St Petersburg on May 24. “Gazprom has always honoured applicable provisions of the EU competition law and reaffirms its commitment to comply with them in future,” he added.
According to the Commission, Gazprom is the dominant gas supplier in a number of Central and Eastern European countries.
In April 2015, the Commission sent a Statement of Objections to Gazprom. It set out the Commission’s preliminary view that the company breached EU antitrust rules by pursuing an overall strategy to partition gas markets along national borders in eight Member States (Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia).
The Commission said in a press release on May 24 that this strategy may have enabled Gazprom to charge higher gas prices in Bulgaria, Estonia, Latvia, Lithuania, and Poland.
“Today’s Commission decision puts an end to this behaviour by Gazprom,” the press release read. “Furthermore, it imposes on Gazprom a detailed set of rules that will significantly change the way Gazprom operates in Central and Eastern European gas markets,” the Commission added.
The Commission said the Russian gas giant must remove any restrictions placed on customers who want to re-sell the gas across international border; facilitate gas flows to and from isolated markets i.e. the Baltic States and Bulgaria; abide by structured processes to ensure competitive gas prices; and not act on any advantages concerning gas infrastructure, which it may have obtained from customers by having leveraged its market position in gas supply.
These obligations address the Commission’s competition concerns and achieve its objectives of enabling the free flow of gas in Central and Eastern Europe at competitive prices, the Commission concluded.