BRUSSELS—OAO Gazprom on Monday sent its response to European Union charges that the Russian energy firm hindered competition and charged unfair prices in Eastern Europe, arguing the case was "economically and legally unfounded."

The response, which was expected by Monday, "shows why we believe the European Commission's allegations are based on an incorrect methodology," Gazprom said. It comes a week after Gazprom said it proposed a settlement with EU regulators, a move that could help the company avoid billion-dollar fines.

The European Commission, the bloc's top antitrust authority, said it had received Gazprom's response and would consider it "carefully…before taking any decision on how to proceed." The regulator said it was assessing Gazprom's settlement proposals "in parallel."

The commission in April filed formal charges against Gazprom, saying the state-controlled company broke EU antitrust law in eight countries where it is the dominant gas supplier—Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia. The commission said restrictive terms in Gazprom contracts forced territorial constraints on customers, for instance by prohibiting them from re-exporting gas to another country. It also objected to Gazprom's practice of tying the price of gas to that of oil.

Gazprom has consistently rejected the charges as politically motivated; a claim the commission has denied. In recent months in particular the company has pointed out that customers whose contracts are tied to the price of oil are now enjoying exceptionally cheap gas because of the collapse in global oil prices.

In its statement on Monday, Gazprom said "when it comes to [the company's] alleged 'excessive pricing,' our response provides evidence and data to show why the Commission's conclusions are both economically and legally unfounded."

The company said it would continue with settlement talks "in order to settle the case on mutually acceptable ground, taking into account the arguments presented in our response." While Gazprom has denied any wrongdoing, its management has said it was open to a settlement.

If accepted, a settlement could help the company avoid fines, but would likely require it to fundamentally change the way it has done business in Eastern Europe since the collapse of the Soviet Union.

The commission said it couldn't "anticipate the timing for the next steps in the investigation."

Gabriele Steinhauser contributed to this article.

Write to Tom Fairless at tom.fairless@wsj.com

 

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(END) Dow Jones Newswires

September 28, 2015 14:15 ET (18:15 GMT)

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