Regulator finds Gazprom guilty of abusing position in LDP market
MOSCOW. Dec 12 (Interfax) - A Russian Federal Antimonopoly Service (FAS) commission has found a group of entities consisting of OJSC Gazprom , LLC Gazprom Komplektatsia and LLC Gazprom Tsentrremont guilty of abusing its commanding position in the large-diameter pipe market but has closed the case in view of the fact that the group of companies volunteered to rectify the violations, the FAS said.
The commission found that the group's actions could have restricted competition in this market in the period 2008-2011.
Gazprom is Russia's biggest LDP consumer with over 50% of the market, the FAS said.
"However, in the period from 2012 through 2013, the Gazprom group has carried out a set of measures aimed at improving the system of purchases and developing competition on the LDP market," the regulator said. As a result of changes in the company's purchasing strategy, LDP producers have obtained the opportunity to participate in competitive purchases conducted by the group.
Therefore, the FAS commission decided to close the case concerning Gazprom group violations of the competition law in light of the voluntary rectification of the antimonopoly legislation violations.
The regulator also decided to issue instructions to Gazprom, Gazprom Komplektatsia and Gazprom Tsentrremont to not allow actions that could lead to the restriction or elimination of competition and violation of antimonopoly law on the markets for electric welded LDP when conducting competitive purchases of LDP, as well as to carry out actions aimed at ensuring competition on LDP markets.
The investigation into collusion against LLC North European Pipe Project (NEPP) and the Gazprom group has been stopped due to the lack of violations of competition law in the actions reviewed by the commission. NEPP is a distributor that bids in Gazprom tenders for pipes. The company forms a pool of suppliers for large Gazprom lots that pipe companies cannot supply independent.
"The FAS commission decided to issue the Gazprom group instructions with the aim of preventing violations of antimonopoly legislation and ensuring competition on LDP markets. The FAS of Russia will continue to monitor the situation in the area of large-diameter pipe purchases," commission chairman and FAS deputy head Andrei Tsarikovsky was quoted as saying.
NEPP said the FAS decision is "balanced." A spokesman for NEPP said that contracts with Gazprom were signed following tenders, and the company believes that NEPP did not receive "any preferences, particularly in regard to pipe manufacturers."
The chairman of the coordinating council of the Association of Pipe Producers, Ivan Shabalov hopes the FAS decision can be considered a benchmark and final, considering the amount of information that was gathered and analyzed. "Clearly, there are no more questions left for participants of the pipe market," he said.
"The LDP market has only taken shape in the last eight years. I'm confident that as it develops further the network of distribution companies and competition among many suppliers will grow, which is a plus both for producers and for consumers of pipes," Shabalov said.
