Commission notice pursuant to Article 12(2) of Council Regulation (EEC) No 1017/68 concerning Case COMP/D-2/38.086 - European Rail Shuttle (ERS)

(2002/C 13/03)

(Text with EEA relevance)

1. Application

The parties listed in section 3 below have submitted an application pursuant to Article 12 of Regulation (EEC) No 1017/68 with a view to obtaining, for a further three-year period, a declaration of non-applicability of the prohibition in Article 2 to the continuing operation of ERS, in accordance with Article 5 of that Regulation.

2. Background

ERS was set up in 1994 as a joint venture company engaged in the movement of deep-sea containers by scheduled rail shuttle services between Rotterdam and points in Germany and Italy. ERS acts as an intermediary between its parent shipping lines and the railway undertakings and contracts with the latter for train crew and traction. ERS sells any available spare capacity to third parties.

The ERS agreement was originally notified to the Commission on 15 June 1995. Details of the application were published by the Commission on 30 October 1997(1). By decision of 30 January 1998 ("the decision"), the Commission acknowledged that the agreement should be exempted for a period of three years.

The parties contend that the nature, content and objectives of the current arrangements are essentially the same as those which were the subject of the decision and that the only differences relate to shareholding and routes served.

3. The parties

The parties to the notified agreement are:

- Mærsk Intermodal Europe BV ("MIE"), an intermodal operator based in the Netherlands and specialising in the inland distribution of deep-sea containers moved by Mærsk Sealand. MIE is a subsidiary of Mærsk Benelux BV and part of the A P Møller Group,

- P & O Nedlloyd BV ("PONL"), a container transport company based in the Netherlands and formed by the merger of P & O Containers Ltd and Nedlloyd Lines BV.

4. Arguments of the parties for negative clearance or exemption

Shareholding

ERS originally had five shareholders i.e. Nedlloyd, Mærsk, Sea-land Service, P & O Containers Ltd and Holland Rail Container BV. The four shipping companies had the same shareholding and decisions were taken on the basis of unanimity. P & O Containers Ltd and Nedlloyd established P & O Nedlloyd in 1996(2). Subsequently, Holland Rail Container BV withdrew from ERS. In 1999, the AP Møller Group acquired control of Sea-Land Service Inc(3). Consequently, MIE and PONL are the sole shareholders of ERS, each with 50 % of the shares. The European Rail Shuttle Agreement BV ("ERS Shareholders Agreement") of 12 December 2000 supersedes that of 1998.

The parties contend that the reduction in the number of shareholders cannot be considered a change of control, as the reduction in the number of shareholders having joint control i.e. MIE and PONL does not lead to a change in the quality of control(4). Nor does it involve any new entry or substitution of shareholders acquiring control.

The parties argue, furthermore, that ERS cannot be considered a full-function joint venture as it was established primarily to provide services to the parent companies: ERS was devised as a joint operating company for existing and new rail shuttle services. It is only in the event of spare capacity on a particular rail shuttle train that third parties are offered this capacity by ERS, on behalf of its parents. Nor does ERS take the decisions on pricing itself. Instead, the parties jointly agree on the terms and prices for the allocation of excess capacity to third parties. Additionally, it is for the parties themselves to decide upon the establishment and operation of possible new rail shuttle services and for the parties to bear the associated costs. It follows that ERS lacks commercial independence.

New routes

ERS has expanded its route network. At the time of the decision adopted on 30 January 1998, ERS operations were confined to services between Rotterdam and each of Germersheim, Neuss, Milan and Padova. ERS now serves in addition Mainz, Mannheim, Athus, Mouscroun, Poznan, Warsaw, Prague, Bratislava and Szombathely, all from Rotterdam. It also operates between Bremerhaven and Munich, Nurnberg and Stuttgart and between those three points and Hamburg.

Relevant market

The parties are of the opinion that the relevant service market is inland transport as part of multimodal transport operations but take the view that, irrespective of the precise definition adopted, ERS does not raise competition concerns and that, consequently, the exact definition of the product market can be left open.

As for the geographic market, the parties recall that, in its decision, the Commission took the view that because of the substitutability of the principal ports of Germany, Belgium and the Netherlands for the handling of substantial container traffic, the geographic market to be taken into consideration included the territories of Germany, Belgium, the Netherlands and Italy in the case of services to Milan and Padova. The parties conclude that, consistent with the reasoning in the decision, and bearing in mind the expansion of ERS services, the geographic market now includes at least the above territories plus Poland, Hungary, the Czech Republic and Slovakia.

5. Third party comments

This notice is published pursuant to the procedure established by Article 12(2) of Regulation (EEC) No 1017/68.

The Commission has not, at this stage, formed any view on the applicability of Article 5 of the said Regulation to the ERS agreement.

The Commission invites all interested parties to submit their comments to it within 30 days of publication of this notice, quoting Case COMP/D-2/38.086 - European Rail Shuttle, by fax ((32-2) 296 98 12) or by post to: European Commission DG Competition

Directorate D

J-70 B - 1049 Brussels.

(1) Case No IV/35.592 (OJ C 328, 30.10.1997, p. 13).

(2) Case IV/M.831 - P & O/Royal Nedlloyd of 19 December 1996.

(3) Case IV/M.1651 - Mærsk/Sea-Land of 6 October 1999.

(4) See Commission notice on the concept of undertakings concerned under Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ C 66, 1998).