Gazprom accused of abusing its market position

Gazprom charges more for its gas in places like Poland and the Czech Republic than it does in France and Germany, despite having to transport gas further

The EU is seeking to protect Central and Eastern European consumers from what it calls an “abuse of its dominant market position” (GETTY IMAGES)

The European Competition Commissioner, Margrethe Vestager, fresh from charging US tech giant Google with abusing its monopoly position, has levelled similar charges at Russian gas giant Gazprom.

The EU is seeking to protect Central and Eastern European consumers from what it calls an “abuse of its dominant market position”. Gazprom charges more for its gas in places like Poland and the Czech Republic than it does in France and Germany, despite having to transport gas further.

In a statement the Competition Commission claimed that Gazprom abuses its monopolistic position by imposing territorial restrictions on the re-sale of gas, pursues an unfair pricing policy in five member states (Poland, Czech Republic, Latvia, Estonia and Bulgaria) and uses its gas supply to leverage unrelated commitments from gas transportation infrastructure wholesalers.

If proven, the charges could result in large fines and other sanctions against Gazprom. Aside from the business and energy implications, the move also has the potential to complicate negotiations to end the civil war in Ukraine. The Russian economy has already been hit hard by the fall in energy prices, and targeting Gazprom may discourage Russian politicians from seeking a peace deal in Ukraine.

In a radio interview, the Russian Foreign Minister, Sergei Lavrov, said the EU was attempting to retroactively apply new rules to old contracts. “This is absolutely unacceptable,” he said. “All contracts in effect now that Gazprom signed with its partners were signed with full respect to the legal regime that existed in the EU at that time.”

The Competition Commission has been investigating Gazprom’s pricing and business practices since 2013.

Ms Vestager’s comments in the EU statement make her position clear: “All companies that operate in the European market – no matter if they are European or not – have to play by our EU rules. Gazprom has 12 weeks to respond to the charges.