EC preparing ‘statement of objections’ to Gazprom over alleged abuse of dominant position

Written by on October 4, 2013 in Europe - No comments

The European Commission is preparing a statement of objections to Russian gas export giant Gazprom, the latest phase since the EC opened a formal investigation in 2012 into alleged abuse in Gazprom’s dominant position in the supply of upstream gas to countries in Central and Eastern Europe.

“Since we opened the formal probe one year ago, we have been investigating very actively,” EC Vice President of the European Commission and Commissioner for Competition, Joaquín Almunia, said.

The European Commission last year launched a probe into an alleged abuse of dominant position by Gazprom in Lithuania and elsewhere in Eastern and Central Europe.

The probe aims at finding out abuse cases of unreasonable gas pricing, impediment to diversification of gas supplies and free movement of gas among the member states. The investigation is anticipated to end in spring 2014.

“We are dealing with the complaint by Lithuania, which was filed after our preliminary probe had started, but the geographic scope of our investigation is wider, encompassing the other Baltic states, Poland, the Czech Republic, Slovakia, Hungary and Bulgaria.”

Any company active within the EU single market, irrespective of where it is based, must play by the rules, he said.

“We suspect that Gazprom has been hindering the free flow of gas across member states and the diversification of sources of supply. We also suspect that it has imposed unfair priceazs on its customers.”

Almunia said that would be premature to anticipate when the next steps might be taken, but “we have now moved to the phase of preparing a statement of objections”.

The investigation into Gazprom had included raids on several Gazprom operations and the company’s clients in the Central and Eastern European countries that are subjects in the investigation.

Lithuanian president Dalia Grybauskaitė held talks with Almunia on October 3, underlining. that unfair energy prices posed a major obstacle to the EU competitiveness.

Abuse of monopoly position by the Russian gas concern Gazprom in Lithuania and other Eastern and Central European countries contravenes the free-market principles and harms the competitiveness of Europe, a statement after the meeting said.

At present, consumers in Lithuania pay for gas about 30 per cent more compared to other European countries.

Photo: Dž. G. Barysaitė

Photo: Dž. G. Barysaitė

According to Grybauskaitė, implementation of the EU’s Third Energy Package, construction of energy interconnections which will join still isolated EU regions, and diversification of energy supplies will contribute to ensuring competitive energy prices and transparency in the Eastern and Central European region. The EU single energy market is planned to be completed in 2014.

Grybauskaitė and Almunia also reviewed proposals to adopt an EU directive on damages claims for violation of competition rules.

According to Grybauskaitė, the directive is yet another tool in the fight against Gazprom’s abuse of monopoly position as it will have a deterrent effect.

This would make infringements even more expensive for offenders by ensuring that not only fines but also compensations to consumers and businesses are paid.

(Photo: Gazprom)

 

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