__[no-tr-for:concl-avg-civ-m]__ Rantos __[no-tr-for:presentees-le]__ 7 ____[unreferenced:no-tr-for:mois-07.2]____ 2022.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2022:537
• Date: 07 July 2022
• Celex Number: 62021CC0042
• Court: Court of Justice (European Union)

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 7 July 2022 (1)

Case C‑42/21 P

Lietuvos geležinkeliai AB

v

European Commission

(Appeal – Competition – Abuse of a dominant position – Rail freight market – Decision finding an infringement of Article 102 TFEU – Access to infrastructure managed by Lithuania’s national railway company – Removal of a section of railway track – Concept of ‘abuse’ – Bronner case-law – Indispensability of access – Anticompetitive intent – Exercise of unlimited jurisdiction – Reduction of the amount of the fine)

I. Introduction

1. By its appeal, Lietuvos geležinkeliai AB (‘LG’) seeks to have set aside the judgment of the General Court of the European Union of 18 November 2020, Lietuvos geležinkeliai v Commission (T‑814/17, EU:T:2020:545; ‘the judgment under appeal’), by which the General Court, first, dismissed its action in so far as it sought the annulment of Commission Decision C(2017) 6544 final of 2 October 2017 relating to a proceeding under Article 102 TFEU (Case AT.39813 – Baltic Rail) (‘the decision at issue’), and, second, in the exercise of its unlimited jurisdiction, reduced the amount of the fine imposed by that decision on LG, setting it at EUR 20 068 650.

2. In the present case, the decision at issue had established an abuse of a dominant position which consisted in the removal, by LG, Lithuania’s national railway undertaking and manager of its railway infrastructure, of a 19 km section of railway track, located in Lithuania and running up to the border with Latvia (‘the Track’). According to the Commission, the removal of the Track was liable to prevent a competing railway undertaking established in Latvia from entering the Lithuanian market for the provision of rail transport services for oil products or, at the very least render its entry more difficult.

3. The first three grounds of the present appeal are directed, essentially, against the Court’s assessment of the existence of an abuse of a dominant position. The fourth ground of appeal concerns the assessment of the amount of the fine.

4. The present appeal provides the Court of Justice with the opportunity to clarify its case-law on the criteria applicable to the finding of an abuse of a dominant position and, more specifically, to provide further clarification of the scope of the case-law established in the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569; ‘the judgment in Bronner’) on the criteria for classification of a refusal of access or supply by an undertaking in a dominant position as an ‘abusive practice’. In addition, this appeal also allows useful findings to be identified concerning the exercise by the General Court of its unlimited jurisdiction.

II. Background to the dispute

5. The background to the dispute and the content of the decision at issue are set out in paragraphs 1 to 48 of the judgment under appeal. For the purposes of the present appeal, they can be summarised as follows.

A. Factual context

6. LG is Lithuania’s national railway company, a public undertaking established in that Member State, whose sole shareholder is the Lithuanian State. As a vertically integrated undertaking, LG both manages railway infrastructure, which remains the property of the Lithuanian State, and provides rail transport services in Lithuania.

7. Orlen Lietuva AB (‘Orlen’) is an undertaking established in Lithuania, which specialises in refining crude oil and distributing refined oil products. Orlen is a wholly owned subsidiary of the Polish undertaking PKN Orlen SA. Orlen’s activities include operating several facilities in Lithuania, including a large refinery (‘the Refinery’) located in Bugeniai, in the Mažeikiai district in the north-west of Lithuania, close to the border with Latvia. That refinery is the sole installation of its type in the three Baltic States. At the end of the 2000s, 90% of the refined oil products from that refinery was transported by rail, thereby making Orlen one of LG’s most important customers.

8. At that time, Orlen produced approximately eight million tonnes of refined oil products annually at the Refinery. Three quarters of that output was destined for export, mainly by sea to countries in Western Europe. Accordingly, 4.5 to 5.5 million tonnes of refined oil products were transported through Lithuania by train to the seaport of Klaipėda (Lithuania). The remainder of the exported output, approximately 1 to 1.5 million tonnes, was transported also by train to or through Latvia and was destined mainly for consumption on the internal Estonian and Latvian markets. Around 60% of that output transport by train to or through Latvia used the ‘Bugeniai-Mažeikiai-Rengė’ railway line, a route which runs from the Refinery, located close to the Mažeikiai rail junction, to the town of Rengė (Latvia), 34 km of which were located in Lithuanian territory (‘the Short Route to Latvia’). The remainder of that output transported by train to or through Latvia used the ‘Bugeniai-Kužiai-Joniškis-Meitene’ railway line, a longer route, 152 km of which were located in Lithuanian territory (‘the Long Route to Latvia’).

9. In order to transport its products on the Short Route to Latvia, Orlen used LG’s services for the Lithuanian part of the route, namely from the Refinery to the Latvian border. LG then concluded a subcontract with Latvijas dzelzceļš, the Latvian national railway company (‘LDZ’) for transport over that Lithuanian part of the route. Since it did not have the necessary regulatory authorisation to carry out its activities independently in the territory of Lithuania, LDZ operated as a subcontractor of LG. After crossing the Lithuanian border, LDZ continued to transport Orlen’s products on Latvian territory under various contractual arrangements.

10. Commercial relations between Orlen and LG concerning LG’s transport services on the Lithuanian rail network, including transport services on the Short Route to Latvia, were governed by an agreement signed in 1999 (‘the 1999 Agreement’). As well as setting out the rates applied by LG for transport services, the 1999 Agreement included, in particular, a specific commitment by LG to transport Orlen’s cargo on the Short Route to Latvia for the duration of the agreement, namely until 2024.

11. In early 2008, a commercial dispute arose between LG and Orlen regarding the rates paid by Orlen for the transport of its oil products. On account of that commercial dispute, Orlen explored the possibility of contracting directly with LDZ for rail transport services for its freight on the Short Route to Latvia, and switching its seaborne export business from Klaipėda, in Lithuania, to the seaports of Riga and Ventspils in Latvia.

12. On 12 June 2008, a meeting was held between LG and Orlen, at which those plans to switch Orlen’s export business were discussed. In addition, since Orlen had made a unilateral decision to apply a lower rate than that requested by LG, on 17 July 2008 the latter initiated arbitration proceedings against Orlen.

13. On 28 July 2008, LG informed Orlen that the 1999 Agreement would be terminated as from 1 September 2008. Orlen noted during the administrative procedure before the Commission that the termination of the 1999 Agreement from 1 September 2008 had been announced by LG three days after Orlen had formally requested a quotation from LDZ to replace LG’s services for transporting, from the Refinery using the Short Route to Latvia, approximately 4.5 to 5 million tonnes of refined oil products to the seaports located in the territory of Latvia. Orlen also suggested that LG could have been informed of the request for a quotation directly by LDZ.

14. On 2 September 2008, following the identification of a defect in the rail track of several dozens of metres in length (‘the Deformation’), LG, relying mainly on safety grounds, suspended traffic on the Track between Mažeikiai and the border with Latvia.

15. On 3 September 2008, LG set up an Inspection Commission composed of senior employees in its local subsidiary to investigate the reasons for the Deformation. The Inspection Commission submitted two reports, namely the investigation report of 5 September 2008 and the technical report of the same date.

16. According to the investigation report of 5 September 2008, the Deformation was caused by the physical deterioration of a number of elements of the Track structure. That report also confirmed that traffic should remain suspended ‘until all the restoration and repair works are completed’.

17. The findings contained in the investigation report of 5 September 2008 were confirmed by the technical report of the same date, which referred solely to the site of the Deformation and identified the cause of that deformation as various problems with the structure of the Track. That technical report concluded that the traffic accident, which occurred due to the deformation on the Track, should be qualified as a buckling which happened due to physically worn-out elements of the Track’s upper structure.

18. LDZ made an offer to Orlen for the transport of its oil products on 29 September 2008, following a meeting held on 22 September 2008. According to Orlen, that offer was ‘concrete and attractive’. From 3 October 2008, LG undertook the complete removal of the Track. By the end of October 2008, the Track had been removed in its entirety.

19. On 17 October 2008, Orlen sent a letter to LDZ confirming its intention to transport approximately 4.5 million tonnes of oil products from the Refinery to the Latvian seaports. A subsequent meeting was held on 20 February 2009 and further discussions took place during the spring of 2009.

20. In January 2009, a new general transport agreement was concluded between LG and Orlen for a 15 year period, namely until 1 January 2024 (‘the 2009 Agreement’). That agreement replaced an interim agreement which had been signed on 1 October 2008.

21. Negotiations between Orlen and LDZ...