Lithuanian railways judgment arrives in great haste

January 13, 2023
1 minutes

This week, the European Court of Justice (CJEU) upheld the General Court’s judgment and European Commission’s decision to fine the Lithuanian national railway company for abusing its dominant position.

The abuse: dismantling 19km of track, thereby making it unusable for the dominant railway company, Lietuvos geležinkeliai AB (LG), as well as for the complainant.

The case is interesting for a number of reasons, and I’ve written more about it here: European Union: Abuse of dominance and Article 102 of the TFEU. However, this week’s key learnings from the CJEU judgement are as follows:

Destruction does not equal Refusal of Access. By destructing an asset, the dominant company itself loses access to the benefit of its asset. This is in contrast to merely refusing access, whereby the dominant company reserves the asset to itself, deriving an immediate benefit. The present case should therefore not be reviewed as “problem of access” abuse.

State-Funded Infrastructure does not equal a Company’s Own Investment. Competition law requires a fair balance between the requirements of undistorted competition and contractual freedom and the right to property. For that purpose, the CJEU differentiates between infrastructure that a dominant company owns and has developed based on its own investment, and that of a publicly funded railway company that does not even own the infrastructure.

It is not necessary to consider the legal test for a duty to deal where there is a regulatory obligation to provide access in the first place. The CJEU found that the case-law arising from Bronner could not apply where the applicable regulatory framework already imposes a duty to supply on the dominant company, or where the dominant position derives from a statutory monopoly. It rejected LG’s argument that there is no rule that the Bronner criteria (in particular indispensability) are inapplicable where the applicable regulatory framework already imposes a duty to supply. 

An independent form of abuse does not need to meet the indispensability threshold under Bronner. Dismissing LG’s appeal, the CJEU concluded that the indispensability condition established by the CJEU in Bronner (judgment of 26 November 1998, C‑7/97), does not need to be met in cases where the abuse takes a different and independent form. This outcome may already provide a preview of what is in the bag for Google Shopping.