Competition authorities in the European Union face a very tough challenge in regulating foreign investment in energy infrastructure. For political reasons, it’s clear that they desire a level of “reciprocity” in the home market of each foreign investor – namely, that if Gazprom wants to own mid- and down-stream assets in Europe, it’s only fair that European companies be allowed direct shares in energy production projects. Such was the aim of the contentious but well intentioned “unbundling” proposal from the EC. The measure, it goes without saying, came under aggressive criticism both from Gazprom as well as several German and French national champions, who didn’t want to see their energy production companies severed from their supply and distribution entities. On Friday, the commissioners finally folded under the pressure, reaching an agreement which will allow each individual EU member state to decide whether to allow foreign bidders entering their market, significantly weakening Europe’s ability to protect itself from Russian market domination.