EU alleges gas price extortion from Russian company Gazprom

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Disagreements between the Europe and Russia came to a head last week, as the European Union launched a legal investigation into Gazprom, creating tension with Moscow as it accused the gas company of overpricing gas for purchasers in Eastern Europe and hindering free market competition.
The EU’s new anti-trust chief, Margrethe Vestager, who announced a similar market abuse action against US based company Google last week; stating Gazprom was using its market dominance in to charge as much as 40% more than average.

It could do so, she said, by insisting on contracts that ban clients selling on gas to others, especially across borders, in itself a hindrance of free markets that broke EU law and has been an obstacle to EU efforts to supply Ukraine. A third set of charges related to pressure put on Bulgaria & Poland to invest in pipelines according to priorities actioned by Gazprom.

Gazprom dismissed all the accusations on the grounds of being unfounded and said it expected a resolution at a political level, though Vestager maintained the case was not at all political.

This comes after last year’s Gazprom offered concessions to Vestager’s predecessor in a bid to settle the case and avoid a possible fine but negotiations failed over refusal to reduce prices in Eastern Europe. The Russian giant supplies about a third of Europe’s natural gas.