UPDATE: EU Commission, Gazprom settle antimonopoly case

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ST. PETERSBURG/BRUSSELS, May 24 (PRIME) -- The European Commission has decided to close an antimonopoly case against Russian gas giant Gazprom and obliged the company to enable the free flow of gas at competitive prices in Central and Eastern European gas markets, according to statements of the commission and the company released on Thursday.

“The European Commission has adopted a decision imposing on Gazprom a set of obligations that address the Commission's competition concerns and enable the free flow of gas at competitive prices in Central and Eastern European gas markets, to the benefit of European consumers and businesses,” the authority said.

Gazprom is also obliged “to remove any restrictions placed on customers to re-sell gas cross-border” and “cannot act on any advantages concerning gas infrastructure, which it may have obtained from customers by having leveraged its market position in gas supply,” the commission said.

Gazprom must not demand compensation by Bulgaria for cancellation of the South Stream gas pipeline project.

The company can be fined up to 10% of its worldwide turnover if it breaks any of the imposed obligations, according to the commission’s statement.

Gazprom said: “The European Commission has told us today that in the framework of the antimonopoly investigation and settlement of the claims by the European Commission’s Directorate for Competition made under a corresponding investigation, it deems acceptable Gazprom’s proposals corrected after a market test,” the company said. The commission decided to close the case and will not take any further actions regarding the case, the company said.

Gazprom’s Deputy CEO Alexander Medvedev said that the company is satisfied with the decision.

E.U. Competition Commissioner Margrethe Vestager said that the settlement of the case does not prevent interested entities in Central and Eastern Europe from claiming compensation by Gazprom in courts.

She said that Gazprom has the right to retain a dominating position on the E.U. gas market but must not abuse it.

She also said that the obligations on Gazprom would be in force for eight years, while the obligation to demand no compensation from Bulgaria would be in force for 15 years. Any long-term contracts that Gazprom signs during the period should include conditions of the settlement agreement, she said.

The European Commission’s antimonopoly case was not about Russia, it was about European consumers and European businesses, she added.

The European Commission initiated an antimonopoly investigation against Gazprom in August 2012 and accused it of violating the E.U. competition rules in 2015. According to the authority, Gazprom restricted free supplies to Eastern E.U. countries by splitting gas markets, preventing diversification of supplies and setting unfair prices.

In March 2017, the European Commission disclosed details of Gazprom’s proposals for a peaceful settlement of the case. The authority approved the proposals preliminary.

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