EC fines Lithuanian Railways €28M in competition breach
- EC fines Lithuanian Railways €28 million for hindering competition on rail freight market: EC press release says

The European Commission has fined state-owned Lithuanian Railways €27.8 million for hindering competition on the rail freight market, by removing a rail track connecting Lithuania and Latvia, the Commission announced on Monday.

The Commission's investigation found that such action hindered competition on the rail freight market by preventing a major customer of Lithuanian Railways from using the services of another rail operator, according to the press release.

"Lithuanian Railways failed to show any objective justification for the removal of the track. Such behavior is in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) which prohibits the abuse of a dominant market position," the press release said.

In 2008, polish oil company Orlen, a major commercial customer of Lithuanian Railways, considered redirecting its freight from Lithuania to Latvia by using the services of another rail operator. In October 2008, Lithuanian Railways dismantled a 19 kilometer-long section of track connecting Lithuania and Latvia, close to Orlen's refinery.

The removal of the track meant that Orlen would need to use a much longer route to reach Latvia. Since then, the dismantled track has not been rebuilt.

"Lithuanian Railways used its control over the national rail infrastructure to penalize competitors in the rail transport sector. The European Union needs a well-functioning rail freight market. It is unacceptable and unprecedented that a company dismantles a public rail infrastructure to protect itself from competition," EU Commissioner Margrethe Vestager said.

Lithuanian Railways is the incumbent state-owned rail company in Lithuania. The company is vertically integrated, meaning that it is responsible for both railway infrastructure and rail transport.

The EU's rail freight market was liberalized in 2007. Since then, the Commission has been working to complete the single market for rail services by ensuring the independent management of rail infrastructure and fostering investment in tracks that interconnect Member States.

By Muhsin Baris Tiryakioglu

Anadolu Agency



03 Oct,2017