Russia's Gazprom Settles Multiyear Antitrust Case With European Union
May 24 2018 - 7:48AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS--Russian energy giant PAO Gazprom has formally
committed to changing some business practices to settle a multiyear
antitrust case, the European Union said Thursday, in a procedure
that allows the state-owned company to avoid billion-dollar
fines.
The announcement, which contrasts with billion-dollar antitrust
fines levied by the same office on internet companies like Alphabet
Inc.'s Google, comes amid strained relations between Russia and the
West.
"This case is not about the flag of the company--it is about
achieving the outcome that best serves European consumers and
businesses," said EU antitrust chief Margrethe Vestager.
The European Commission, which serves as the EU's antitrust
watchdog, said Gazprom has committed to a variety of pledges for an
eight-year period that will enable the free flow of gas in central
and Eastern Europe at competitive prices. The company has already
made some of those changes of its own volition in response to
customer pressure.
Should the company renege on its promises, it could be hit with
a fine as high as 10% of its annual revenue, the EU said.
"We are satisfied with the commitments decision announced today
by the European Commission in relation to the settlement of the
investigation," said Alexander Medvedev, Gazprom's deputy chairman.
"We believe that today's decision is the most reasonable outcome
for the well-functioning of the entire European gas market."
The EU started probing Gazprom's business practices in 2011. In
spring 2015, Ms. Vestager formally accused Gazprom of violating
antitrust rules in eight European countries where it is the
dominant gas supplier--Bulgaria, Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Poland and Slovakia.
By 2016, the EU and Gazprom had agreed to settle the case and
over the past year, have been negotiating tweaks to the company's
commitments after testing the terms with complainants and
competitors.
As part of this, Gazprom has pledged to remove contractual
restrictions that prevented customers from reselling gas across
borders, the bloc said Thursday.
The commission said Gazprom had also promised to set gas prices
in line with competitive western European gas markets and that the
company would allow customers to more frequently ask for price
revisions.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
May 24, 2018 07:33 ET (11:33 GMT)
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