Report: EU to file antitrust charges against Gazprom

MOSCOW, Apr 20 (PRIME) -- The European Union’s competition regulator plans to file formal antitrust charges against Russia’s state-owned gas company Gazprom on Wednesday, a person familiar with the matter said on Monday, a step set to escalate the standoff between Europe and Moscow, the Wall Street Journal reported.

The European Commission started a formal investigation into Gazprom’s business practices in some eastern and southern European countries in 2012, saying that it suspected the company of abusing its dominant position in those countries’ natural-gas supply. The bloc’s competition commissioner, Margrethe Vestager, said in February that she was ready to file formal charges against Gazprom “relatively short time span.”

A person familiar with the commission’s case against Gazprom said that the charge sheet, known as a statement of objections, against the company has been put on the agenda of the commission meeting on Wednesday and that no resistance was expected.

A spokesman for Ms. Vestager declined to comment.

Gazprom spokesman Sergei Kupriyanov couldn’t immediately be reached for comment.

A person familiar with Gazprom said that the company had signaled its willingness to settle the case to the commission as recently as last week. Formal settlement talks broke down last year after Russia annexed the Crimean peninsula from Ukraine.

With the planned charges, Vestager is escalating another antitrust case against a major company in a big country just one week after the commission filed formal charges against U.S.-based Google. The case against Gazprom could potentially result in multibillion euro penalties against the company.

The commission has treaded carefully with regards to the Gazprom case over the past year, amid concerns that moving ahead with charges could make it more difficult to reach a diplomatic solution with Moscow over its actions in eastern Ukraine.

But when Vestager took office in November she said that she would take a fresh look at the case and not be steered by political considerations. At the same time, progress on the Minsk Agreement, the E.U.’s peace plan for Ukraine, has been slow, indicating that a resolution of the broader conflict is likely still some time off.

Gazprom is the E.U.’s biggest outside supplier of natural gas, with some countries in the Baltics and southeast Europe relying entirely on shipments from the Russian company. When the commission opened its formal investigation into Gazprom’s practices 2 and a half years ago, it said that suspected the company of unfair behavior in three areas.

First, the commission has been examining whether Gazprom is preventing some countries from re-exporting gas that they bought from the company, a practice called “market partitioning.”

The commission has also been investigating whether Gazprom has tied some aspects of its contract with customers — such as the price it charges for gas — for cooperating on other business areas, including the building of new pipelines. That is known as “market foreclosure.”

Finally, the commission has been looking into Gazprom’s practice of tying the price it charges for gas to international oil prices.

Gazprom and E.U. competition regulators had come quite close to settling the first two elements of the case before talks stopped last year, according to people familiar with the investigation. A lot less progress had been made on the oil-price link — partly because other gas companies have pursued a similar pricing policy — and experts have questions regarding whether the commission would be able to build a case against Gazprom on that front.

The person familiar with the commission’s case didn’t say on what parts of the investigation charges would be filed on Wednesday.

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