EU Charges Gazprom With Abusing Its Dominance, Preventing Cross-Border Flow Of Gas In Europe

In a move that could further exacerbate tensions between Russia and Europe, the European Union on Wednesday filed formal charges against Russian gas giant Gazprom for violating the EU’s antitrust rules by abusing its dominant market position. In a statement released Wednesday, the European Commission said it had reached the “preliminary view” that Gazprom was hindering cross-border competition in markets in eight EU countries -- Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

“All companies that operate in the European market -- no matter if they are European or not -- have to play by our EU rules,” EU’s antitrust chief Margrethe Vestager said, in the statement. “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.”

These artificial barriers include, among other things, imposing territorial restrictions in supply agreements with wholesalers and pursuing an unfair pricing policy in many EU member states, the commission said, in the statement.

“Gazprom has also used other measures that prevented the cross-border flow of gas, such as obliging wholesalers to obtain Gazprom’s agreement to export gas and refusing under certain circumstances to change the location to which the gas should be delivered,” the European Commission said, adding that these measures violate the free trade of gas within the European Economic Area.

Gazprom is currently the dominant gas supplier in several Central and Eastern European countries. It has a market share of well over 50 percent, and, in some cases, up to 100 percent in many of these nations.

If these allegations are proven, Gazprom might face fines of up to 10 percent of the company's overall sales -- a sum of nearly 93 billion euros ($100 billion), Agence France-Presse reported. The company now has 12 weeks to respond to the charges.