The EU Competition Investigation into Gazprom’s Sales to Central and Eastern Europe: a comment on commitments

On 13 March 2017 DG COMP announced its satisfaction with Gazprom’s commitments, submitted in response to DG COMP’s concerns in respect of Gazprom’s alleged anti-competitive practices in several central and east European EU member states, relating to territorial restrictions, pricing, and infrastructure. Gazprom’s commitments have addressed all substantiated DG COMP concerns and their acceptance would provide insurance against any future abuse by Gazprom of its dominant position in these countries. Most importantly, Gazprom has henceforth agreed to charge average weighted import border prices in Germany, France and Italy and/or prices at relevant generally accepted liquid hubs in Continental Europe instead of alternative fuel (oil-linked) prices, despite the fact that at present west European border/hub prices do not (yet) accurately represent gas market conditions in either Bulgaria or the Baltics (and only in the past one to two years, and only approximately in Poland). This means that if the commitments are accepted, buyers in these countries will be able to buy Russian gas at prices which otherwise would not have been offered to them until interconnections had been established with north-west European hubs (potentially up to three years hence). Therefore it is reasonable to expect an overall positive response to the commitments during the (ongoing) market test, followed by DG COMP’s acceptance of the commitments and closure of the case with a settlement. However, it cannot be ruled out that some member states, specifically Poland, might attempt to derail such a settlement. Should that happen and the case be referred to the EU Court of Justice (CJEU), the whole episode could drag on for several more years.

By: Jonathan Stern , Katja Yafimava

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