14.11.2017   

EN

Official Journal of the European Union

C 383/7

1.

The Commission found that the state-owned Lithuanian rail company, AB Lietuvos geležinkeliai (‘LG’), abused its dominant position as the rail infrastructure manager in Lithuania by removing a track leading from Lithuania to the border with Latvia thus preventing a competing rail undertaking from Latvia to enter the Lithuanian market. The Commission imposed a fine on LG and ordered it to bring the infringement to an end.

2.

On 14 July 2010, the Commission received a complaint under Article 7 of Regulation (EC) No 1/2003 lodged by AB ORLEN Lietuva (‘OL’) against LG.

3.

Between 8 and 10 March 2011, the Commission carried out inspections under Article 20(4) of Regulation (EC) No 1/2003 at the premises of LG.

4.

On 6 March 2013, the Commission decided to initiate proceedings against LG within the meaning of Article 2(1) of Commission Regulation (EC) No 773/2004 (2) and Article 11(6) of Regulation (EC) No 1/2003.

5.

On 5 January 2015, the Commission adopted a Statement of Objections against LG. The oral hearing took place on 27 May 2015.

6.

On 23 October 2015 the Commission sent a Letter of Facts to LG to which it responded on 2 December 2015.

7.

LG has a legal monopoly on the management of rail infrastructure in Lithuania.

8.

The complainant, OL, owns a refinery in Lithuania near the border with Latvia. OL is dependent on rail for the transportation of its products from the refinery. The larger part of its production is transported to the Lithuanian seaport of Klaipeda for seaborne export. OL is an important customer of LG.

9.

In 2008 OL was examining the possibility of switching to the Latvian seaports using the services of the Latvian rail company (‘LDZ’). For that purpose OL’s cargo would have been transported to Latvia on a 34 kilometre route from the refinery to the border. In September 2008 LG suspended traffic on a 19 kilometre section of the route (‘Track’) due to an alleged deformation on 40 metres (‘Deformation’). In October 2008 LG dismantled entirely the 19 kilometres of the Track which was not rebuilt since.

10.

The Commission considered that by removing the Track entirely LG has had recourse to methods different from those which condition normal competition, where: LG was aware of OL’s plans to switch to the Latvian seaports using LDZ’s services; the removal of the Track by LG was done in great haste without securing the necessary funds and without taking any of the normal preparatory steps for its reconstruction; the removal of the Track was contrary to standard practice; LG took steps to convince the Lithuanian government not to rebuild the Track.

11.

The Commission found that the Track allowed for the shortest and cheapest route from the refinery to a seaport. Because of its proximity to Latvia and to LDZ’s logistical base, this route also presented a very favourable option for LDZ to enter the Lithuanian market.

12.

The removal of the Track prejudiced LDZ’s competitive position vis-à-vis LG and made its entry to the Lithuanian market significantly more difficult. After the removal of the track, rail transport from the refinery to a seaport (either in Lithuania or Latvia) must pass through much longer routes in the territory of Lithuania. This would necessitate LDZ to operate far from its logistical base in Latvia and make it dependent on the infrastructure services of its competitor, LG. In these circumstances LDZ faces significant commercial risks which it is less likely to take.

13.

LG justified its actions by arguing that after the Deformation occurred, the renovation of the entire Track was necessary before traffic could have been resumed. According to LG the renovation required first removing the track entirely. The Commission considered however that these explanations were inconsistent with each other, at times simply contradicting one another and unconvincing. The Commission therefore considered that LG failed to show objective justification for the removal of the Track.

14.

In light of the gravity and duration of this ongoing infringement, the Commission imposed on LG a fine of EUR 27 873 000.

15.

The Commission considered that there may be several possible structural or behavioural remedies that would either restore the competitive situation that existed before the removal of the track or eliminate the disadvantages facing potential competitors on the alternative routes to the seaports.

16.

The Commission ordered LG to bring the infringement to an end and to submit to it within three months from the date of notification of the decision a proposal for measures to that effect.