Brussels, 4 September 2012

Antitrust: Commission opens proceedings against Gazprom

The European Commission has opened formal proceedings to investigate whether Gazprom, the Russian producer and supplier of natural gas, might be hindering competition in Central and Eastern European gas markets, in breach of EU antitrust rules. An opening of proceedings does not prejudge the outcome of the investigation; it only means that the Commission will treat the case as a matter of priority.

The Commission has concerns that Gazprom may be abusing its dominant market position in upstream gas supply markets in Central and Eastern European Member States, in breach of Article 102 of the Treaty on the Functioning of the European Union.

The Commission is investigating three suspected anti-competitive practices in Central and Eastern Europe.
First, Gazprom may have divided gas markets by hindering the free flow of gas across Member States.
Second, Gazprom may have prevented the diversification of supply of gas.
Finally, Gazprom may have imposed unfair prices on its customers by linking the price of gas to oil prices.

Such behaviour, if established, may constitute a restriction of competition and lead to higher prices and deterioration of security of supply. Ultimately, such behaviour would harm EU consumers.

In September 2011, the Commission carried out inspections at the premises of gas companies in several Member States (see MEMO/11/641).

Background

Article 102 TFEU prohibits the abuse of a dominant position which may affect trade between Member States. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU Member States.

Article 11(6) of the Antitrust Regulation provides that the initiation of proceedings by the Commission relieves the competition authorities of the Member States of their competence to also apply EU competition rules to the practices concerned. Article 16(1) of the same Regulation provides that national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.

The Commission has informed Gazprom and the competition authorities of the Member States that it has opened proceedings in this case.

There is no legal deadline to complete inquiries into anti-competitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.

----------

 27 September 2011

Antitrust: Commission confirms unannounced inspections in the natural gas sector

In view of press questions, the European Commission can confirm that today, Commission officials undertook unannounced inspections at the premises of companies active in the supply, transmission and storage of natural gas in several Member States. The Commission has concerns that the companies concerned may have engaged in anticompetitive practices in breach of EU antitrust rules or that they are in possession of information relating to such practices.

The Commission is investigating potential anticompetitive practices in the supply of natural gas in Central and Eastern European Member States. The investigation focuses on the upstream supply level, where, unilaterally or through agreements, competition may be hampered or delayed. The Commission suspects exclusionary behaviour, such as market partitioning, obstacles to network access, barriers to supply diversification, as well as possible exploitative behaviour, such as excessive pricing. Any such behaviour could be in breach of EU antitrust rules that prohibit abuse of dominant positions and restrictive business practices (respectively Articles 102 and 101 of the Treaty on the Functioning of the European Union – TFEU).

At the same time, the Commission is also investigating suspicions of anticompetitive behaviour to the detriment of upstream suppliers themselves.

As usual, the Commission officials were accompanied by their counterparts from the relevant national competition authorities.

Competition enforcement in the energy sector

The Commission is determined that consumers throughout the EU should enjoy the benefits of an integrated and competitive single European energy market that increases security of supply of energy at affordable prices. This means in particular ensuring the diversification of sources of supply and the free flow of gas once it has entered the EU. Whereas EU energy legislation serves to remove public barriers to an open energy market, competition rules serve to ensure that private players do not replace these barriers by anticompetitive conduct.

As a follow-up to its energy sector competition inquiry (see IP/07/26), the Commission successfully concluded a series of antitrust investigations between 2007 and 2010 against a number of gas incumbents in Western Europe (see IP/07/1487, IP/09/410, IP/09/1872, IP/10/494 and IP/10/1197). The current antitrust investigations concern not only incumbents but also upstream suppliers. The inspections took place at multiple sites in ten Member States, mainly in Central and Eastern Europe. In most countries, it was the Commission's first competition inspection in the energy sector and in some, the Commission's first ever competition inspection.