EU charges Gazprom, risking new front against Russia

BRUSSELS - Agence France-Presse

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The EU on April 22 formally charged Russian gas giant Gazprom with abusing its dominant market position in Europe, risking a new battle with the Kremlin and deepening the crisis over Ukraine.

The European Commission accused state-owned Gazprom with infringing the bloc’s single market rules as tensions between the Europe and President Vladimir Putin’s Russia are at their worst since the end of the Cold War.

With the political stakes so high, the Commission had been reluctant to move against Gazprom for fear of further angering Russia, which supplies Europe with one third of its gas supply, half of which moves through war-torn Ukraine.

“All companies that operate in the European market, no matter if they are European or not, have to play by our EU rules,” said Margrethe Vestager, the Competition Commissioner who last week opened a similar high-profile case against US Internet giant Google.

But Vestager insisted the case, first launched in 2012, was straightforward and based strictly on competition policy despite what she acknowledged to be a highly charged political context.

“This is a competition case, this is how we have proceeded, as always it is based on facts,” she said.

The Commission, the EU’s powerful executive arm, said investigators had found that Gazprom significantly hindered competition in Central and Eastern European gas markets, where the company is by far the dominant supplier.

Specifically, the EU accused Gazprom of breaching single market rules by forbidding the resale of its gas between EU countries, allowing the Russian giant to charge unfair prices.

Gazprom rejected EU accusations that it was abusing its dominant market position in Europe, calling the charges unjustified.

“Gazprom considers the objections put forward by the European Commission to be unfounded,” the company said in a statement.    

“Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business.”
  
The European Commission, the EU’s powerful executive arm, earlier Wednesday formally charged Gazprom with abusing its market position in Europe, in a move that risked inflaming tensions with Russia further.

Gazprom now risks fines as high as 10 percent of the company’s overall annual sales.