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08/12/2016

Vestager: Commission ready to move forward with Gazprom probe

Competition

Vestager: Commission ready to move forward with Gazprom probe

Margrethe Vestager [European Commission]

Competition Commissioner Margrethe Vestager said that despite the Ukraine crisis, she will move forward with the two-and-a half year long probe into Gazprom.

In an interview in the Wall Street Journal, the Danish Commissioner said she believed that the executive could move the case forward in a relatively short time span.

The Commission opened an antitrust case against Gazprom in September 2012, having already raided some of its offices.

At that time, the EU executive said it will treat the case as “a matter of priority”, but added that there was no deadline to complete the enquiry.

The investigation has reportedly focused on three suspected anti-competitive practices in Central and Eastern Europe, the Commission said:

  • First, Gazprom may have divided European gas markets by hindering the free flow of gas across member states.
  • Second, it may have prevented the diversification of gas supply.
  • Thirdly, it may have imposed unfair prices on its customers by linking the price of gas to oil prices.

>> Read: Commission opens antitrust case against Gazprom

Since she assumed her portfolio, Vestager has been repeatedly asked about she intends to deal with the Gazprom probe. Each time she replied that she needed to familiarise herself with the case.

US officials have just confirmed their intentions to intensify sanctions against Russia in the context of the Ukraine crisis, by hitting the country’s energy sector.  In addition to the sanctions on Russian individuals, Washington has banned the Russian oil industry from access to services vital to develop deepwater, Arctic offshore and shale energy projects.

However, Vestager strongly denied the Commission’s move against Gazprom was politically motivated.

“I think if you see it as a political case, then any timing will be bad,” she said. “For me, there’s a case and eventually that may have to stand up in court,” she told the WSJ.

Background

Gazprom is suspected to be in breach of Article 102 TFEU, which prohibits the abuse of a dominant position which may affect trade between member states.

The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU member states.

Gazprom delivers gas to 25 EU countries, the exceptions being Spain and Portugal. The vast majority of contracts to Europe are 20-25-year contracts.

Further Reading