Gazprom charged by EU regulators over Eastern Europe antitrust tactics
European regulators have formally charged Russian energy behemoth Gazprom with anti-competition charges over its central and eastern European business.
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01:16 03/12/14
The European Commission's antitrust regulators have accused the government-controlled gas giant of creating unfair barriers to competition, illegally overcharging its customers and muscling out rivals, in a move that risks adding salt to Moscow's wounds after European sanctions that have led to Russia's poor recent economic performance.
Read more: Russian economy contracts due to EU sanctions and weak oil price
"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," EC commissioner Margrethe Vestager said in a statement.
Vestager, who also recently levied competition charges against Google, added: "Keeping national gas markets separate also allowed Gazprom to charge prices that we at this stage consider to be unfair."
"If our concerns were confirmed, Gazprom would have to face the legal consequences of its behaviour."
Arguing its pricing practices were no different from rival gas suppliers, Gazprom dismissed the charges as "unfounded" and argued that its business practices followed "all the norms of international law and national legislation".
Moreover, it reiterated Moscow's position during the four-year investigation that preceded the charges that a state-to-state solution should be found to any competition issues, especially as it had been “empowered by the laws of the Russian Federation with special socially significant functions and has the status of a strategic government-controlled business entity”.
Not only might Gazprom eventually face fines of more than €10bn, according to media reports, but enforced competition in its markets could prove even more punitive.