The Russian Federal Antimonopoly Service (“FAS”) has initiated proceedings against state-controlled natural gas company Gazprom for violating antimonopoly legislation by creating unlawful obstacles for entry to the gas market. Gazprom holds a dominant position in the market of gas transportation services and is, therefore, prohibited from abusing that position in such a way as to prevent or restrict competition.

The FAS investigation follows a complaint made by Rosneft in which it was alleged that Gazprom had restricted Rosneft’s access to its gas pipeline system. In particular, Rosneft claimed that between April and August 2009, Gazprom restricted the acceptance of gas from Rosneft’s gas fields to its gas transportation system. Rosneft assert that as a result of Gazprom’s unlawful restrictions it was deprived of the possibility of selling gas to consumers losing business as a result, and also incurred fines for violating environmental regulations when it was forced to burn the oil/gas not accepted by Gazprom’s gas transportation system.

The gas transportation system is the main gas pipeline system in the Russian Federation. It allows for the transportation of produced and processed gas from gas fields to customers in Russia.

The case will be considered by the FAS on 2 December 2009.

This investigation follows the FAS announcement on 27 October 2009 that it had fined Rosneft, the country’s biggest oil producer, 5.28 billion roubles (approximately €145 million) for abusing a dominant position in the wholesale market of oil products. In particular, the FAS found that in the first half of 2009, Rosneft had taken oil products off the market which led to increased prices and discriminatory selling conditions. Fines for similar antitrust violations are expected to be imposed on another oil company, Lukoil, in November.

Such intense activity by the FAS against large Russian companies, including the State gas monopoly and oil companies, marks a notable change in Russia in the view of effective competition enforcement. The FAS's activity is to be watched in the future.