Gazprom decision not inconsistent with Google and Qualcomm fines, Csiszár says

Janith Aranze

10 July 2018

Gazprom decision not inconsistent with Google and Qualcomm fines, Csiszár says

Credit: Photo Credit: Ridhiin Pancchmatia

The European Commission’s recent decision not to fine Gazprom for abuse of dominance was consistent with the agency’s punishment of Google or Qualcomm, a senior official at the EU competition watchdog has said. Janith Aranze at GCR Live Brussels

Paul Csiszár, director of DG Comp's basic industries, manufacturing and agriculture directorate, today said he “respectfully disagrees” that there was inconsistency in enforcement between those three decisions. While on the face of it “one might think along these lines”, it is far from the truth, he said.

He was speaking in his personal capacity at GCR Live Brussels: the Bigger Picture, responding to a question from Freshfields Bruckhaus Deringer partner John Davies, who asked if the Gazprom commitment decision was inconsistent with DG Comp’s fines against Google and Qualcomm. Davies noted that “quite a few commentators were unhappy” that Gazprom was not fined.

The commission fined Google €2.42 billion last year for illegally promoting the company’s own comparison shopping service ahead of its rivals’, a decision that it has since appealed against. Earlier this year, DG Comp also hit chipmaker Qualcomm with a €997 million fine, concluding that its exclusivity rebates with Apple illegally shut out rivals from the 4G baseband chipset markets.

In May, DG Comp imposed legally binding commitments on Gazprom requiring it to remove contractual restrictions that disincentivise or prohibit cross-border gas resale in Central and Eastern European markets, but the energy giant escaped a fine.

The commission accused Gazprom of imposing territorial restrictions in its supply agreements, making gas supplies in Bulgaria and Poland conditional on customers investing in unrelated infrastructure, and pursuing an unfair pricing policy in several European countries.

Comparing the Gazprom decision and the fine imposed against Google, Csiszár recalled that Google had three chances to reach a settlement decision with DG Comp before it was fined. Google had submitted remedies to the commission to squash the enforcer’s concerns, but talks broke down between the tech company and the commission after the complainants presented new concerns to the commission.

“Unfortunately Google’s undertakings, which were also market tested, just did not cut it so I do not think Google was not given the opportunity to escape fines,” he said.

Csiszár also pointed to the Amazon e-books case, where the commission accepted Amazon’s commitments to change its practices regarding its most-favoured nation clauses with e-book publishers.

“When it came to our Amazon case, a similarly large American company could have been hit with large headline fines, but it did not happen,” he said.

In the commission’s Gazprom case, Csiszár said the agency thought it was better to ensure commitments from the Russian energy company to guarantee effective change in the market for the benefit of small central and eastern European countries.

“I think my commissioner [Margrethe Vestager] said the case is really starting now and the proof will be in the pudding. Gazprom has to step up and make good on these promises,” he said.

Csiszár noted DG Comp’s €561 million fine against Microsoft for breaching commitments it made in 2009 to give users of its software an easy web browser choice.

“We all hope Central and Eastern European countries can trade with each other and will never have to resort to this type of enforcement,” he said.

Csiszár gave the keynote speech on the second day of GCR Live Brussels, which concluded today.

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