European regulator launches probe against Gazprom

The European Union antitrust regulator has launched an investigation into whether Russia's largest energy company Gazprom had blocked competition in the natural gas markets in Central and Eastern Europe.

The European Commission (EC) yesterday said that it has opened formal proceedings to investigate whether Gazprom may be abusing its dominant market position in upstream gas supply markets by hindering competition in Central and Eastern European gas markets in breach of EU antitrust rules.''

The Brussels-based regulator said that it is investigating three suspected anti-competitive practices by the Moscow-based energy giant in Central and Eastern Europe.

Whether Gazprom has divided gas markets by hindering the free flow of gas across member states, may have prevented the diversification of supply of gas, and whether Gazprom has 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, the EC said in a statement.

The decision to open a formal investigation follows unannounced inspections of natural gas companies across Europe, including at Gazprom affiliates, in September 2011.