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Poland’s anti-monopoly authority fines Gazprom and its business partners engaged in Nord Stream 2

The President of the Office of Competition and Consumer Protection (UOKiK) decided to impose a fine of 29 billion złoty (6,2 billion euros) on Russia’s gas giant Gazprom and a total of 234 million złoty (51,5 million euros) on the business partners engaged in the Nord Stream 2 project. Thus, the UOKiK confirmed that the participants acted not only to the detriment of competition in the gas market but also circumvented the competition laws concerning mergers.

Charges against six economic operators were pressed in this particular case two years ago. The entities concerned included: Russia’s Gazprom, the French Engie Energy, Germany’s Uniper, Austria’s OMV, the Dutch-British Shell and the German Wintershall.

The investigation conducted by the Polish anti-monopoly authority has shown that these six companies concluded, without having received the approval to establish a joint venture, a number of agreements concerned with the financing of Nord Stream 2. In fact, the UOKiK President had issued objections regarding the application, pointing that the construction of Nord Stream 2 posed a threat to competition.

“After the President of UOKiK voiced his serious concerns regarding the concentration, Gazprom signed agreements concerning NS2 gas pipeline with five Western European energy companies,” explained Tomasz Chróstny, President of UOKiK. “According to those agreements, half of the costs of constructing the gas pipeline (with the total value of the project estimated at 9,5 billion euros), was to be financed by those five corporations, contributing 950 million euros each. The other half was to be covered by Gazprom. The same entities which had previously applied for the approval based on the competition protection regulations in effect in Poland and failed to receive it became parties to the financing agreements.”

According to the President of UOKiK, such activities constitute an attempt of the would-be shareholders of Nord Stream 2 to work around the requirement to obtain the approval of the President of UOKiK to establish a company financing the construction of the gas pipeline.

“It needs to be stressed that operating as a financial institution is not the core activity of any of the remaining concentration participants,” Mr Chróstny continued. “First and foremost, Uniper, Engie, OMV, Shell and Wintershall are customers and sometimes also competitors of Gazprom on the gas market.”

In particular, from the very beginning of Nord Stream 2 project, Poland’s oil and gas company PGNiG pointed to its negative impact on competition and security of gas supplies in Central and Eastern Europe, particularly on the Polish market. The company indicated the harmful effect of the Nord Stream 2 project on competition in, among others, the antitrust proceedings conducted by the European Commission against Gazprom, the derogation proceedings before Germany’s Federal Network Agency (Bundesnetzagentur) and in the positions submitted to the UOKiK President as part of antitrust proceedings.

PGNiG considers that the decision of the UOKiK President will significantly contribute to protecting competition in the gas market in Europe. The decision shows that any actions aimed at circumventing the law and harming competition are unacceptable and that all businesses, regardless of the country they are based must act in accordance with the law and comply with their legal obligations. 

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