EU Expected To Announce Antitrust Charges Against Gazprom
April 21, 2015
BRUSSELS -- The European Commission is expected to announce antitrust charges against Russia's state-owned energy giant Gazprom for noncompetitive practices in the EU, in a move that could stoke further tensions between Moscow and the West.
For three years Brussels has been investigating three main accusations against Gazprom: that it prevents some countries from reexporting the natural gas they had purchased, ties the gas price to the price of oil, and blocks rival supply sources.
The EU raided Gazprom offices in eight EU member states in Central and Eastern Europe in 2011 and launched an official probe against the company one year later.
The EU is expected on April 22 to charge that Gazprom was hindering competition in Central and Eastern European gas markets, where the company benefits from a dominant position.
But it is unclear if other charges will also be made against Gazprom and which of the countries where it was investigated -- Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia -- were subject, according to the EU Commission, to the energy giant's noncompetitive business practices.
Each of the eight countries had complained that it was being charged more for its gas from Gazprom than many 'Western' EU countries were paying.
EU sources say the European Commission had the charges ready one year ago but delayed moving forward with them due to concerns about aggravating ties already strained over Russia's intervention in Ukraine.
The EU has sanctioned dozens of Russian individuals and entities over Russia's illegal annexation of Crimea and its role in the conflict in eastern Ukraine.
Gazprom would have 12 weeks to respond to any charges against it and the right to call a hearing with EU competition officials in which it can defend itself against the charges.
It can try to settle the charges in that period of time, through negotiations with EU officials, something Gazprom has indicated it is willing to do.
If the issue is left unresolved, the commission can levy fines of up to 10 percent of Gazprom's overall sales, or order changes in the company's business practices.
Gazprom supplies up to one-third of the EU's total supply of natural gas.
The EU purchased about 125 billion cubic meters of gas from Gazprom in 2014, with half those supplies being sent through pipelines that cross Ukraine.
EU sources say the announcement of charges against Gazprom was also delayed in late 2014 because of the EU's dependence on Gazprom's supplies for the winter.
EU sources added that incoming EU Competition Commissioner Margrethe Vestager -- who assumed office in November -- also wanted to become acquainted with the investigation before announcing any results or charges.
Commission sources told RFE/RL that Vestager's announcement last week of anticompetition charges against the U.S.-based Internet giant Google proved that the EU's investigations are not politically motivated and do not 'single out' Gazprom.
Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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