Article 6
This Decision is addressed to: Ferrovie dello Stato SpA Piazza della Croce Rossa, 1 I-00161 Rome This Decision shall be enforceable pursuant to Article 256 of the EC Treaty. Done at Brussels, 27 August 2003. For the Commission Mario Monti Member of the Commission (1) OJ 13, 21.2.1962, p. 204/62. Although the Regulation was repealed by Council Regulation (EC) No 1/2003 of 16 December 2002 (OJ L 1, 4.1.2003, p. 1), it continues to apply to decisions adopted prior to 1 May 2004. (2) OJ L 148, 15.6.1999, p. 5. (3) OJ L 175, 23.7.1968, p. 1. The Regulation was last amended by Regulation (EC) No 1/2003, which applies, however, only from 1 May 2004. (4) OJ L 354, 30.12.1998, p. 18. (5) OJ C 12, 16.1.2004. (6) OJ L 143, 27.6.1995, p. 70. (7) Schedules have been adapted several times according to the train paths offered by Schweizer Bundesbahn. (8) The Intercity from Germany arrives at 12.38 and 14.38 in Basle. Northbound, the Intercity leaves Basle at 12.21 and 14.21. In order to change trains in Basle, passengers would have seven or eight minutes respectively. (9) In 1998, the travelling time of these connections was five hours, 40 minutes. Today it is five hours, 21 minutes. These trains arrive in the "Basle Bad" railway station. (10) The trains via Domodossola arrive in the Basle "SBB" railway station. Passengers who wish to travel to Germany have to transfer to the "Basle Bad" railway station, from where trains leave to Germany. The travelling time for one of these trains is five hours, two minutes while the others take five hours, 21 minutes. In addition, there is the transfer time of about 30 minutes to Basle Bad. (11) The Cisalpino arrives in the Basle "SBB" station. The travelling time of the Cisalpino is four hours, 31 minutes. In addition, there is the transfer time of about 30 minutes to Basle Bad. For a comparison of travelling time between the Cisalpino and GVG's planned train, see section F(3). (12) As referred to in Article 2 of Council Regulation (EEC) No 1191/69 of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of public service in transport by rail, road and inland waterway (OJ L 156, 28.6.1969, p. 1), as last amended by Regulation (EEC) No 1893/91 (OJ L 169, 29.6.1991, p. 1). (13) OJ L 237, 24.8.1991, p. 25. Directive as last amended by Directive 2001/12/EC (OJ L 75, 15.3.2001, p. 1), which had to be implemented by 15 March 2003. (14) For instance, in November 1996 FS set up an international grouping with Swedish State railways SJ. (15) A list of such services is also provided in Annex II to Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification (OJ L 75, 15.3.2001, p. 29). (16) OJ L 143, 27.6.1995, p. 75. Directive 95/19/EC was repealed, with effect from 14 March 2001, by Directive 2001/14/EC, which had to be implemented by 15 March 2003. (17) Italian Official Gazette No 283, 2.12.1993. In addition, according to Legislative Decree No 422/1997, regional and local governments have the right to licence local and regional railway companies operating their own networks. (18) Article 16 of Decree No 225-T of 26 November 1993 (Italian Official Gazette No 283, 2.12.1993). (19) During the FTE A at the beginning of the year, railway undertakings communicate the needed rail paths and slots. After this meeting, railway undertakings develop draft plans and studies to find possible solutions to the various requests. During the FTE B, which usually takes place in May, requests are made and schedules are fixed. The last meeting, called FTE C, takes usually place in December. During this meeting infrastructure managers harmonise their various schedules. (20) As amended by Article 7 of Decree No 146/1999. (21) See judgment of the Court of First Instance in Case T-229/94 Deutsche Bahn AG v Commission [1997] ECR II-1689. (22) FTE minutes distinguish between an offer of a train path ("réception annonce de sillons") and a request for a train path ("commande de sillon"). The purpose of the former is to inform the infrastructure manager about the interest in providing a particular service. On this basis the infrastructure manager then investigates the availability of the requested train path. If it is available, the train path may then be requested. (23) Letter from GVG to DB of 5 September 1995; request made by DB to FS in September 1995. By letter of 11 September 1996, DB repeated its request on behalf of GVG. (24) Letter from DB to GVG of 28 January 1997. (25) Reply to a request for information on 26 February 2002. (26) Letter from GVG to FS of 12 December 1998. (27) Letter from FS to GVG of 27 November 1998. It is noted that FS did not inform GVG that FS itself was responsible for granting such a safety certificate. (28) In its FTE requests, GVG never got beyond the first step, i.e. the bid for the train path in order to find out whether it is available. (29) The complaint was sent to FS by fax on 29 October 1999. (30) FS offered two train paths from Milan to Domodossola with the schedules 7.15-8.45 and 12.05-13.35. In the opposite direction it offered only one train path from Domodossola to Milan at 20.45-22.15. As there was only one return train path offered, instead of operating two trains a day, GVG could have operated only one. In addition, the early departure time on one train in Basle and the late arrival time in Milan would have made the service unattractive for any beyond traffic. Finally, as the schedule offered by FS was different from the one requested, the train paths did not allow for connection at Domodossola. GVG claimed that SBB could not offer connecting train paths for the ones offered by FS. (31) DB Netz, internal report of 20 January 1997. (32) The minutes mention the exact train paths requested by GVG between Basle and Domodossola and Domodossola and Milan, and that GVG would need connections with trains coming from Germany to Basle. (33) As stated in recital 71, an international grouping can take many forms, including a loose agreement that only confers traffic rights to the grouping members. (34) Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94 European Night Services Ltd (ENS), Eurostar (UK) Ltd, formerly European Passenger Services Ltd (EPS), Union internationale des chemins de fer (UIC), NV Nederlandse Spoorwegen (NS) and Société nationale des chemins de fer français (SNCF) v Commission [1998] ECR II-3141 ("the ENS judgment"), paragraph 220. (35) UIC fiche 471-1 specifies the rules for cross-border traffic. (36) CFL, DB, NS, SNCB and SNCF for instance have concluded a multilateral agreement for cross-border services. A price list annexed to this multilateral agreement provides detailed prices for traction and prices for personnel (drivers and others). Prices vary according to the locomotive used, and whether it is a passenger or a freight transport service. (37) The "Autoreisezug" transports simultaneously passengers and their cars. (38) The "ETR 460". (39) Parts of this text have been omitted to ensure that confidential information is not disclosed. These parts are enclosed in square brackets. (40) The transport of goods was focused on express cargo, i.e. goods that need to be delivered in a relatively short time (time-critical delivery), such as flowers, express mail, spare parts and air cargo. (41) See, for example, Commission Decision 2002/746/EC of 5 July 2002 Austrian Airlines/Lufthansa (OJ L 242, 10.9.2002, p. 25). (42) To consider only rail transport as the relevant downstream market is in line with the case-law of the Community Courts as established in Case T-229/94 Deutsche Bahn (see footnote 21), paragraph 56. In this judgment, the Court pointed out that "the Commission was justified in not taking into consideration, in its material definition of the market, the services provided by [...] road hauliers and inland waterway transport operators." See also Commission Decision 94/210/EC in Case IV/33.941 HOV-SVZ/MCN (OJ L 104, 23.4.1994, p. 34). (43) On all of the three routes discussed here, i.e. from Karlsruhe, Koblenz and Mannheim to Milan, one would have to drive more than 1000 km for a return trip. The estimated travelling time of the car journey would be considerably longer than the train connection planned by GVG. (44) For instance, even without a chauffeur, on the basis of GVG's envisaged prices and a cost per kilometre of EUR 0,22 for travelling by car, travelling from Koblenz to Milan and back by car would cost about 37 % more than travelling by train with GVG's proposed service. The cost difference would increase significantly if one adds a chauffeur for the car journey. (45) For passengers from Karlsruhe, Koblenz and Mannheim, there are no convenient flights available to Milan-Linate. The only possible flights would be from Frankfurt. This, however, increases the travelling time to the airport in Germany. In addition, the only flights from Frankfurt to Milan-Linate depart too early in the morning (at 7.45 and 8.25) or in the evening (at 18.50). Such connections are not comparable with GVG's proposed time schedule. In the case of Koblenz, the passenger would leave at 10.47, in the case of Mannheim at 12.44 and in the case of Karlsruhe at 13.06. (46) Prices applicable on 13 May 2003. (47) The flight time between Basle and Milan is one hour 10 minutes. (48) Ferrovie dello Stato SpA, Trenitalia SpA, Rete Ferroviaria Italiana. SpA: Observations submitted pursuant to Article 19 of Regulation No 17 in the proceedings relating to Case COMP/37.685 GVG/FS, p. 60. (49) See footnote 34. Paragraph 182 of the judgment. (50) See also the Communication from the Commission "Towards an integrated European railway area" (COM/2002/18 final, 23.1.2002), Annex II. (51) ENS judgment (see footnote 34), paragraph 188. (52) GVG has already formed two such international groupings with SJ, the Swedish national railway carrier and the Austrian Graz-Köflacher Eisenbahn. Both groupings have been in place for more than two years and have been notified to the respective national authorities. In both cases, the agreement ensured that the parties obtained the respective traffic rights. In both cases, no further obligation initially arose from the agreement. In the case of the agreement between GVG and Graz-Köflacher Eisenbahn each company carries out its own international services between Austria and Germany. Only if requested by the partner, the companies may also provide additional assistance to each other on an ad hoc basis. This, however, is not part of the international grouping contract itself. Also in the case of the agreement between GVG and SJ, the initial grouping contract only conferred traffic rights. However, the companies subsequently decided to deepen their cooperation. (53) Ferrovie dello Stato SpA "[...] jointly responsible towards the shareholder for the reorganisation of the Group [...]". (54) Case C-286/98 P Stora Kopparbergs Bergslags AB v Commission [2000] ECR I-9925, paragraph 23. (55) See in particular: Case 48/69 ICI v Commission [1972] ECR 619, paragraphs 132 and 133, Case 52/69 Geigy v Commission [1972] ECR 787, paragraph 44, and Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215, paragraph 15. (56) See Commission Decision 2002/344/EC of 23 October 2001 on the lack of exhaustive and independent scrutiny of the scales of charges and technical conditions applied by La Poste to mail preparation firms for access to its reserved services (OJ L 120, 7.5.2002, p. 19), point 79. See also Commission Decisions 94/19/EC Sea Containers v Stena Sealink (OJ L 15, 18.1.1994, p. 8) and 94/119/EC Port of Rødby (OJ L 55, 26.2.1994, p. 52) and the judgment of the Court of Justice in Case C-242/95 GT Link/DSB [1997] ECR I-4449, in which the Commission and the Court considered the behaviour of companies exploiting infrastructure in relation to their subsidiaries active in the provision of services on this infrastructure. (57) Judgment of the Court of First Instance in Case T-128/98 Aéroports de Paris v Commission [2000] ECR II-3929, paragraph 120. (58) Case 311/84 Télémarketing [1985] ECR 3261. (59) Reply to requests for information by RTC and FNME dated 20 February 2002 and 8 March 2002 respectively. (60) As identified by FS in its letter to the Commission dated 6 December 2002. (61) On average, European national railway companies keep one locomotive in reserve as a back-up for eight to 10 locomotives in operation. Some private railway companies manage to operate even with considerably lower back-up capacity. (62) To the extent that such services are open for tender, GVG's Italian subsidiary could only provide regional passenger transport services in Italy. This market, however, differs considerably from the long-distance market as it requires different locomotives and different route knowledge for drivers. (63) Rail Traction Company (RTC) and Ferrovie Nord Milano (FNME) assert that in principle it is possible to use foreign locomotives in Italy. However, owing to the 10-12-month lead time for type approval, RTC has chosen not to do so. FNME has imported a locomotive from Skoda but it is used for freight services only and is not suitable for GVG's planned passenger service. Skoda does not offer locomotives suitable for GVG's service. (64) With a view to establishing whether employing a new locomotive is an option for GVG, there is no need to distinguish between the purchasing and leasing of a new locomotive. The difference between the two arises only with regard to the financing. Leasing is a means of financing an investment. The leasing price is based on the cost of acquisition, the cost of financing and additional expenses. Thus, the sale price of the locomotive determines both the cost of purchasing and the cost of leasing. Moreover, the leasing market in Italy is still in its infancy. (65) Based on a model which FS (Trenitalia) developed internally to evaluate the economic viability of its own operations, Lexecon has developed a simulation model for FS, to verify whether GVG could provide its planned service from Basle to Milan by acquiring its own locomotives. On the assumption that GVG acquires two new locomotives at a price of EUR 3,5 million, runs four trains a day and carries on average 188 passengers per train, the simulation shows that the discounted value of the net cash flows are sufficient to cover the initial entry costs. (66) Until 8 July 1998, FS had a statutory monopoly to provide traction on the Italian railway network. Since then, in principle, other railway companies have the right to provide traction in Italy, provided that they have a licence and that they have obtained a safety certificate. However, until May 2000 the Minister of Transport had not defined the criteria for granting a safety certificate. As under Italian law the definition of these criteria is necessary to grant a safety certificate, until May 2000 no undertaking could enter the Italian traction market. Consequently, until May 2000 FS had a de jure monopoly to provide traction in Italy. While thereafter some companies were licensed, safety certificates were issued only after April 2001. (67) A safety certificate is granted for a particular route and for freight or passenger services. In May 2003, 26 companies had received a railway licence in Italy, while six companies were in possession of the safety certificate. (68) The main private railway operators in Italy are Rail Traction Company (RTC) and Ferrovie Nord Milano Esercizio (FNME). RTC has obtained a licence to provide passenger and freight services in Italy. Its safety certificate, however, is limited to the Verona-Brenner and Verona-Mantua route and to freight services. FNME has obtained a licence to provide passenger and freight services in Italy. It has also obtained a safety certificate to operate on the Milan-Domodossola route. However, this safety certificate is limited to freight transport only. (69) Case C-323/93 La Crespelle [1994] ECR I-5077, paragraph 17; Case C-41/90 Hoefner and Elser [1991] ECR I-1979. (70) Judgments of the Court of Justice in Cases C-40/75 Suiker Unie [1975] ECR 1663, paragraph 375, and C-27/76 United Brands, [1978] ECR 207, paragraphs 45, 56 and 57. (71) In 1996, FS entered into an international grouping with SJ Rail. (72) See footnote 56. Paragraph 122 of the judgment. The Court of First Instance confirmed the Commission's Decision and found that the airport facilities of the Paris airports can be considered an essential facility. Their use is indispensable to the provision of various services, in particular ground handling. Similarly, gaining access to the infrastructure in Italy is essential for GVG for the provision of international rail passenger services from German cities to Milan. (73) See footnote 34. Paragraph 209 of the judgment. (74) In European Night Services (ENS), the Court of First Instance (CFI) stated that an infrastructure, products or services are only essential if such infrastructure, products or services are not interchangeable and if, by reason of their special characteristics - in particular the prohibitive cost of and/or time reasonably required for reproducing them - there are no viable alternatives available to potential competitors, which are thereby excluded from the market (see footnote 34. Paragraph 209 of the judgment). (75) Decision 94/119/EC Port of Rødby (see footnote 55). (76) See footnote 57. Paragraph 27 of the judgment. (77) OJ C 265, 22.8.1998, p. 2, point 83 and Case 85/76 Hoffman-La Roche [1979] ECR 461. (78) OJ L 72, 11.3.1998, p. 30, recital 98. (79) Decision 94/19/EC in Sea Containers v Stena Sealink (see footnote 55), recital 75. (80) The predecessor of FS (RFI). See recital 4 of this Decision. (81) In its letter to GVG of 27 November 1998, FS pointed out that it would provide information on train paths and infrastructure charges only after GVG had presented documents showing that it had entered into an international grouping and that it possessed a safety certificate in Italy. (82) Cases C-287/98 Linster [2000] ECR I-6917, C-8/81 Becker [1982] ECR 53 and 28/67 Molkerei-Zentrale [1968] ECR 211. (83) GVG's first request to FS dates back to 1992. (84) This is acknowledged by FS in its reply to the statement of objections, points 89 and 107. (85) In a number of decisions, the Italian competition authority has found that FS is dominant on the traction market for intermodal container transport. In February 2000, the authority sanctioned FS for having abused its dominant position in the railway traction market for multimodal transport by favouring its own subsidiaries, Italcontainer and Cemat. To deal with excessive demand for rail traction, FS had to introduce a capacity allocation system to ensure fair and efficient allocation of available traction resources. (86) Case C-18/88 RTT v GV-Inno-BM [1991] ECR I-5941 and Joined Cases C-271/90, C-281/90 and C-289/90 Spain, Belgium and Italy v Commission [1992] ECR I-5833. (87) See footnote 57. Paragraph 26 of the judgment. (88) In Decision 88/518/EC British Sugar v Napier Brown (OJ L 284, 19.10.1988, p. 4), the Commission held that British Sugar abused its dominant position on the British sugar market with a course of conduct intended to force Napier Brown to withdraw from the British retail sugar market. (89) See footnote 77. (90) A parallel can be drawn with the situation in the FAG-Flughafen Frankfurt Decision, in which the Commission specified that Frankfurt Airport's obligation to operate the airport properly and safely did not mean that it was allowed to retain these activities for itself (see recitals 93-96 of the Decision). (91) Judgment of the Court of Justice in Joined Cases 6 and 7/73 ICI and Commercial Solvents [1974] ECR 223 and Commission Decision 88/518/EEC in British Sugar v Napier Brown (see footnote 87). (92) See footnote 34. (93) As the market has not yet been liberalised in Italy, no Italian railway undertaking other than FS has a licence based on Directive 95/18/EC for long-distance passenger rail transport. (94) This is acknowledged by FS in its reply to the statement of objections, points 89 and 107. (95) See footnote 12. (96) See Commission Decision 90/456/EEC of 1 August 1990 concerning the provision in Spain of international express courier services (OJ L 233, 28.8.1990, p. 19).