BRUSSELS -- European antitrust regulators on Wednesday charged the Russian energy giant Gazprom with abusing its dominance in natural gas markets, a move amounting to a direct challenge to authorities in Moscow.
The European Commission, the European Union's executive arm, said that unfair pricing might have resulted in higher gas prices in Bulgaria, Estonia, Latvia, Lithuania and Poland, which have long been wholly or substantially dependent on Russian gas. In those countries, the commission said, Gazprom was suspected of charging wholesalers prices that were significantly higher compared with the company's costs or to benchmark prices.
The commission also suspects Gazprom of quashing competition by restricting gas flows to some parts of Europe. Gazprom seems to be "pursuing an overall strategy to partition Central and Eastern European gas markets, for example by reducing its customers' ability to resell the gas cross-border," the commission said.
The commission also said that Gazprom might have been leveraging its dominant market position in Bulgaria and Poland by making supplies of gas conditional on those countries' participating in infrastructure plans such as building a new pipeline route to Europe under the Black Sea.
"Keeping national gas markets separate also allowed Gazprom to charge prices that we, at this stage, consider to be unfair," said Margrethe Vestager, the EU competition commissioner.
"If our concerns were confirmed, Gazprom would have to face the legal consequences of its behavior," she said.
The charges make it more likely that Gazprom could eventually face a fine theoretically running higher than 10 billion euros (about $10.7 billion).
But the larger worry for Gazprom is the prospect of being forced to allow more competition in markets it has long controlled. Russia supplies about one-third of the European Union's natural gas.
Gazprom said in a statement that it "considers the objections put forward by the European Commission to be unfounded."
The company added that it "strictly adheres to all the norms of international law and national legislation," and that its pricing policies "are in full conformity with the standards observed by other producers and exporters of natural gas."
Christopher J. Weafer, a senior partner at Macro-Advisory, a Moscow-based business consulting firm, said that the European Union is "in a stronger position to take on Gazprom than it has been before" because of new supplies of gas opening up for Europe. He noted gas production in Azerbaijan at the end of this decade and the potential of gas from Iran, which has comparable reserves to Russia.
"The commission seems intent on putting a cap on Gazprom's position," Weafer said. "They can do that."
He said that the only leverage that Gazprom has is to refuse new contracts to European customers, but "that would be pretty much cutting off their nose to spite their face."
He said there was the possibility of a settlement, with Gazprom easing some of its pricing and gas-flow restrictions while gaining permission to expand its pipeline capacity in northern Europe. But he said that the "political rhetoric is going to be tough."
"The Kremlin is going to complain about this in fairly clear terms," he said.
The regulators' move is a frontal challenge to President Vladimir Putin's economic and geopolitical strategy by potentially limiting Russia's ability to set prices favoring some customers and penalizing others.
On Wednesday, Gazprom reiterated that it was closely tied to the Russian state and "established beyond the jurisdiction of the EU." The company added that it had been "empowered by the laws of the Russian Federation with special socially significant functions and has the status of a strategic government-controlled business entity."
President Dalia Grybauskaite of Lithuania, the country that called most vigorously for formal charges, said, "The decision is a strong signal to consumers and the market that rules apply to everyone."
"The era of Kremlin-backed political and economic blackmail draws to a close," said Grybauskaite, who also called for "swift and conclusive" results in the case.
The charges represent the second major move in a week by Vestager, who has sought to reinvigorate antitrust enforcement in Europe since taking office six months ago. Last Wednesday, she filed formal charges accusing Google of abusing its dominance in the market for online search in Europe.
Stanley Reed contributed reporting from London.