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EU, Gazprom settle gas dispute

March 13, 2017

The Russian gas giant has agreed to a set of commitments to settle an investigation into whether it is breaking EU antitrust rules with its huge European market share and in some countries an outright monopoly.

Margrethe Vestager
Image: Dunand/AFP/Getty Images

The settlement announced by EU Competition Commissioner Magrethe Vestager on Monday includes greater contractual freedom for countries dealing with Gazprom - the Russian energy behemoth which has long dominated the market of gas distribution in eastern and central Europe.

Vestager said Gazprom had now come forward with commitments seeking to address EU concerns, adding that competitors and customers were now invited to voice their opinions on the deal as part of the EU process of deciding whether the terms are acceptable.

Noting that the commitments would "better integrate" gas markets in the region, she said: "We believe that Gazprom's commitments will enable the free flow of gas in Central and Eastern Europe at competitive prices."

Greater freedom

The EU has been investigating Gazprom since 2015 over claims it abused its dominant position in these markets. The bloc's executive, the European Commission, noted at the time that it believed the company had been breaking antitrust rules by "pursuing an overall strategy to partition central and eastern European gas markets."

The remedies now offered by Gazprom also include removing restrictions on customers re-selling gas across borders, ensuring that gas prices are tied to competitive benchmarks.

Gazprom will also be barred from taking undue advantage of infrastructure which it has obtained from customers by having leveraged its market position in gas supply.

Under EU rules, a company found in breach of anti-competition rules is liable to a fine of up to 10 percent of annual sales, in Gazprom's case nearly 83 billion euros ($88.5 billion) in 2015. Vestager noted that Gazprom was still facing such a fine if it violated the commitments.

A Gas Deal with Ukraine - Delivery from West to East

uhe/sri (dpa, AFP)