# C_2017383EN.01000501.xml

| 14.11.2017 | EN | Official Journal of the European Union | C 383/5 |
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14.11.2017

EN

Official Journal of the European Union

C 383/5

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Final Report of the Hearing Officer (1)

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Case AT.39813 — Baltic Rail

(2017/C 383/07)

| (1) | The draft decision relates to the removal by AB Lietuvos geležinkeliai (‘LG’) of a 19-kilometre stretch of railway track running from Mažeikiai (Lithuania) to the border with Latvia (the ‘Track’). According to the draft decision, this constitutes an infringement of Article 102 TFEU in that it raised market entry barriers without objective justification, weakening (potential) competition in the market for the provision of rail transport services for oil products between a refinery in Bugeniai (Lithuania) (the ‘Refinery’) and the seaports of Klaipėda (Lithuania), Riga (Latvia) and Ventspils (Latvia). |
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(1)

The draft decision relates to the removal by AB Lietuvos geležinkeliai (‘LG’) of a 19-kilometre stretch of railway track running from Mažeikiai (Lithuania) to the border with Latvia (the ‘Track’). According to the draft decision, this constitutes an infringement of Article 102 TFEU in that it raised market entry barriers without objective justification, weakening (potential) competition in the market for the provision of rail transport services for oil products between a refinery in Bugeniai (Lithuania) (the ‘Refinery’) and the seaports of Klaipėda (Lithuania), Riga (Latvia) and Ventspils (Latvia).

| (2) | The Commission’s investigation followed a complaint by the Refinery’s owner, AB ORLEN Lietuva (‘OL’). Until shortly before its removal, the Track had been used as part of the main route for the transportation of oil products from the Refinery to or through Latvia. After the removal of the Track, all products from the Refinery bound by rail for Latvia had to be transported on a different route, via a more distant border crossing. |
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(2)

The Commission’s investigation followed a complaint by the Refinery’s owner, AB ORLEN Lietuva (‘OL’). Until shortly before its removal, the Track had been used as part of the main route for the transportation of oil products from the Refinery to or through Latvia. After the removal of the Track, all products from the Refinery bound by rail for Latvia had to be transported on a different route, via a more distant border crossing.

| (3) | Between 8 and 10 March 2011, the Commission carried out inspections at LG and at another undertaking. |
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(3)

Between 8 and 10 March 2011, the Commission carried out inspections at LG and at another undertaking.

| (4) | On 6 March 2013, the Commission initiated proceedings for the purposes of Article 11(6) of Council Regulation (EC) No 1/2003 (2) and Article 2(1) of Commission Regulation (EC) No 773/2004 (3) in respect of LG. |
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(4)

On 6 March 2013, the Commission initiated proceedings for the purposes of Article 11(6) of Council Regulation (EC) No 1/2003 (2) and Article 2(1) of Commission Regulation (EC) No 773/2004 (3) in respect of LG.

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| (5) | On 5 January 2015, the Commission addressed a statement of objections to LG (the ‘SO’). In essence, the Commission’s preliminary assessment in the SO was that LG, by dismantling the Track without objective necessity, infringed Article 102 TFEU, raising barriers-to-entry in the downstream market for the railway transportation of oil products between the Refinery and the seaports of Klaipėda, Riga and Ventspils. |
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(5)

On 5 January 2015, the Commission addressed a statement of objections to LG (the ‘SO’). In essence, the Commission’s preliminary assessment in the SO was that LG, by dismantling the Track without objective necessity, infringed Article 102 TFEU, raising barriers-to-entry in the downstream market for the railway transportation of oil products between the Refinery and the seaports of Klaipėda, Riga and Ventspils.

| (6) | On 9 January 2015, LG was given access-to-file by means of a CD-ROM. |
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(6)

On 9 January 2015, LG was given access-to-file by means of a CD-ROM.

| (7) | On 4 February 2015, in accordance with Article 6(1) of Regulation No 773/2004, OL received a non-confidential version of the SO. After OL requested access to some of the information that was redacted in that version (4), DG Competition provided OL with a less-redacted version of the SO on 25 February 2015. OL did not seek further access to the SO text, but in its written comments on the SO, OL criticised the extent of redactions in this second ‘non-confidential’ version as being unjustified. Contrary to OL’s suggestions however, the extent of redactions in that version did not undermine the exercise of OL’s right, as a complainant, to be closely associated with proceedings. |
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(7)

On 4 February 2015, in accordance with Article 6(1) of Regulation No 773/2004, OL received a non-confidential version of the SO. After OL requested access to some of the information that was redacted in that version (4), DG Competition provided OL with a less-redacted version of the SO on 25 February 2015. OL did not seek further access to the SO text, but in its written comments on the SO, OL criticised the extent of redactions in this second ‘non-confidential’ version as being unjustified. Contrary to OL’s suggestions however, the extent of redactions in that version did not undermine the exercise of OL’s right, as a complainant, to be closely associated with proceedings.

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| (8) | On 8 April 2015, LG responded to the SO and to OL’s comments on the SO. |
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(8)

On 8 April 2015, LG responded to the SO and to OL’s comments on the SO.

| (9) | LG and OL took part in an oral hearing on 27 May 2015. |
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(9)

LG and OL took part in an oral hearing on 27 May 2015.

| (10) | In the reply to the SO and during the oral hearing, LG claimed that the SO failed to ‘identify a proper theory of harm’ and thus to review LG’s conduct under sufficiently specify precise legal criteria that describe the nature of the allegedly abusive conduct and point to relevant case law. Rather, the SO combined, according to LG, the Commission’s ‘own doubts ... with a superficial appreciation of LG’s statements to reach a vague conclusion that the removal of the Track was not objectively justified’. |
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(10)

In the reply to the SO and during the oral hearing, LG claimed that the SO failed to ‘identify a proper theory of harm’ and thus to review LG’s conduct under sufficiently specify precise legal criteria that describe the nature of the allegedly abusive conduct and point to relevant case law. Rather, the SO combined, according to LG, the Commission’s ‘own doubts ... with a superficial appreciation of LG’s statements to reach a vague conclusion that the removal of the Track was not objectively justified’.

| (11) | These criticisms essentially raise issues of substance rather than of procedural fairness. The effective exercise of LG’s rights of defence, in particular its right to be heard, was not unlawfully restricted by the framing or content of the SO. Accordingly, these criticisms are unconvincing from a due-process perspective. |
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(11)

These criticisms essentially raise issues of substance rather than of procedural fairness. The effective exercise of LG’s rights of defence, in particular its right to be heard, was not unlawfully restricted by the framing or content of the SO. Accordingly, these criticisms are unconvincing from a due-process perspective.

| (12) | On 23 October 2015, DG Competition sent LG a ‘letter of facts’, enclosing additional evidence on which reliance by the Commission was envisaged. In its written response of 2 December 2015, LG claimed in substance, among other things, that the Commission should have indicated more precisely why, and the extent to which, it considered given pieces of evidence to corroborate arguments put forward in the SO and/or to undermine LG’s arguments made in response to the SO. |
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(12)

On 23 October 2015, DG Competition sent LG a ‘letter of facts’, enclosing additional evidence on which reliance by the Commission was envisaged. In its written response of 2 December 2015, LG claimed in substance, among other things, that the Commission should have indicated more precisely why, and the extent to which, it considered given pieces of evidence to corroborate arguments put forward in the SO and/or to undermine LG’s arguments made in response to the SO.

| (13) | The letter of facts presents in sufficiently clear and precise terms (often including specific references to the SO) the additional evidence concerned, as well the inferences that might be drawn from the individual pieces of this evidence. These inferences were provisional since LG was being given the opportunity to comment on them. The detail in which they were presented was sufficient for LG to identify, where necessary, those of its arguments to which given possible inferences related. I thus consider LG’s procedural criticisms of the letter of facts to be unwarranted. |
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(13)

The letter of facts presents in sufficiently clear and precise terms (often including specific references to the SO) the additional evidence concerned, as well the inferences that might be drawn from the individual pieces of this evidence. These inferences were provisional since LG was being given the opportunity to comment on them. The detail in which they were presented was sufficient for LG to identify, where necessary, those of its arguments to which given possible inferences related. I thus consider LG’s procedural criticisms of the letter of facts to be unwarranted.

| (14) | In accordance with Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which LG has been afforded the opportunity of making known its views. I conclude that it does. |
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(14)

In accordance with Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which LG has been afforded the opportunity of making known its views. I conclude that it does.

| (15) | Overall, I consider that the effective exercise of procedural rights has been respected in this case. |
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(15)

Overall, I consider that the effective exercise of procedural rights has been respected in this case.

Brussels, 29 September 2017.

Joos STRAGIER

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(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

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(2)  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1).

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(3)  Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18) (‘Regulation No 773/2004’).

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(4)  This request was addressed to me, but was transferred to DG Competition in view of the requirements of Article 3(7) of Decision 2011/695/EU.

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