Judgment of the Court of First Instance (Second Chamber) of 15 September 1998. - 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 of the European Communities. - Competition - Transport by rail - Agreements on overnight rail services through the Channel Tunnel - Restrictions on competition - Directive 91/440/EEC - Appreciable effect on trade - Supply of necessary services - 'Essential facilities' - Statement of reasons - Admissibility. - Joined cases T-374/94, T-375/94, T-384/94 and T-388/94.



European Court reports 1998 Page II-03141



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 Actions for annulment - Jurisdiction of the Community judicature - Claim in an application that a direction be issued to an institution - Inadmissible (EC Treaty, Arts 173 and 176) 2 Acts of the institutions - Individual decision - Notification - Meaning (EC Treaty, Art. 191, third para.) 3 Acts of the institutions - Statement of reasons - Obligation - Scope - Decision finding an infringement of the competition rules - Agreements of minor importance (EC Treaty, Arts 85(1) and 190) 4 Competition - Agreements, decisions and concerted practices - Prejudicial to competition - Criteria of assessment - Economic and legal context - Rail transport - Agreement establishing an international railway grouping within the meaning of Directive 91/440 - Possibility of market access (EC Treaty, Art. 85(1); Council Directive 91/440, Arts 3 and 10) 5 Transport - Rail transport - Competition rules - Regulation No 1017/68 - Directive 91/440 - Definition of an international grouping of railway undertakings within the meaning of Article 3 of Directive 91/440 (Council Regulation No 1017/68, Art. 5; Council Directive 91/440, Arts 3 and 10) 6 Competition - Agreements, decisions and concerted practices - Prohibition - Exemption - Conditions - Restrictions on competition which are indispensable - Products or services necessary or essential for access to the market (EC Treaty, Art. 85(3)) 7 Competition - Agreements, decisions and concerted practices - Prohibition - Exemption - Agreement setting up a joint venture in the transport sector - Temporary exemption - Duration of the exemption - Factors to be taken into account (EC Treaty, Art. 85(3); EEA Agreement, Art. 53(3); Council Regulation No 1017/68, Art. 5)

Summary

1 A claim in an application for annulment that the Court should issue a direction to the Commission to adopt specific measures is inadmissible. The Community judicature is not entitled to issue directions to the institutions or to assume the role assigned to them; rather, it is for the administration concerned to adopt the necessary measures to implement a judgment given in such proceedings. 2 A decision is duly notified once it has been communicated to the addressee and the addressee is in a position to take cognisance of it. Where notification is made by registered letter with postal acknowledgment of receipt, the question whether it has been properly effected depends on whether the national rules applicable to mail deliveries in the Member State concerned have been complied with. However, where a measure is notified to the registered office of an undertaking, its validity is in no way conditional on its having been actually brought to the notice of the person competent to deal with it according to that undertaking's internal rules. A decision is not properly notified where it is delivered by the postal services of the State concerned to a person in the addressee undertaking who is not authorised under the national postal regulations to take delivery of registered mail. Consequently, the period of time allowed for commencing proceedings contesting that decision begins to run only from the date of signature of the form for acknowledgment of receipt which the Commission has enclosed with the notified decision. 3 Whilst, in stating the reasons for the decisions which it takes to enforce the rules on competition, the Commission is not required to discuss all the issues of fact and law and the considerations which have led it to adopt its decision, it is none the less required under Article 190 of the Treaty to set out at least the facts and considerations having decisive importance in the context of the decision in order to make clear to the Court and the persons concerned the circumstances in which it has applied the Treaty. Other than in exceptional circumstances, the statement of reasons must be contained in the decision itself, and it is not sufficient for it to be explained subsequently for the first time before the Court. Where horizontal agreements between undertakings reach or only very slightly exceed the 5% threshold regarded by the Commission itself as critical and such as to justify application of Article 85(1) of the Treaty, the Commission must provide an adequate statement of its reasons in relation to the analytical data examined, particularly with regard to the market shares of the undertakings concerned, for concluding that the essential elements of a situation in which Article 85 applies are in fact present, unless such data were not challenged by the parties during the prior administrative procedure. 4 In assessing an agreement under Article 85(1) of the Treaty, account should be taken of the actual conditions in which it functions, in particular the economic and legal context in which the undertakings operate, the services covered by the agreement and the actual operational conditions and structure of the market concerned, unless it is an agreement containing obvious restrictions of competition such as price-fixing, market-sharing or the control of outlets. The examination of conditions of competition is based not only on existing competition between undertakings already present on the relevant market but also on potential competition, in order to ascertain whether, in the light of the structure of the market and the economic and legal context within which it functions, there are real concrete possibilities for the undertakings concerned to compete among themselves or for a new competitor to penetrate the relevant market and compete with the undertakings already established. In the context of the rail transport market as organised by Directive 91/440 on the development of the Community's railways, although the railway undertakings operating on their national networks are to a certain extent potential competitors for international passenger services, provided that they form an international grouping within the meaning of Article 10 of the Directive, the fact remains that an international grouping between railway undertakings for the purposes of operating particular international routes cannot have the effect of an appreciable restriction of existing competition between those undertakings in so far as Directive 91/440 requires the railway undertaking established in each State concerned by the route in question to be an obligatory trading partner, and thus prevents other railway undertakings from competing with the international grouping on the rail links concerned. As regards the analysis of the potential restrictive effects on competition, affecting the subsidiaries of national rail undertakings, engendered by an agreement to form an international rail grouping, account must be taken of the economic context, particularly the structure of the relevant market, and, more specifically, the cost of access to the market, in order to determine the likelihood of actual or potential competitors. 5 Under Article 3 of Directive 91/440 on the development of the Community's railways, an international grouping is defined as any association of at least two railway undertakings established in different Member States for the purpose of providing international transport services between Member States; the form taken by such an association is immaterial. The categories defined by Directive 91/440 are therefore misapplied where a decision confines the term `international grouping' to cooperative associations among railway undertakings, such as traditional joint operation agreements, to the exclusion of any other form such as a cooperative, or even concentrative, joint venture. The requirement laid down in the same provision, regarding possession of the means to provide rail haulage in order to fall within the definition of railway undertaking does not necessarily imply ownership of the haulage equipment. It follows that an international grouping of railway undertakings cannot be denied the status of such a grouping for the purposes of Directive 91/440 on the ground that they do not own haulage equipment. 6 Where, pursuant to Article 85(3) of the Treaty, the Commission lays down, in respect of an agreement setting up a joint venture, conditions designed to prevent the restrictions of competition from going beyond what is indispensable, requiring that access to infrastructure, products or services be provided to third parties under the same conditions as to the joint venture on the ground that they are necessary or even that they constitute essential facilities, particularly from the point of view of access to the market, neither the parent undertakings nor the joint venture thus set up may be regarded as being in possession of infrastructure, products or services which are necessary or essential for entry to the relevant market unless such infrastructure, products or services are not interchangeable and unless, 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 of the joint venture, which are thereby excluded from the market. 7 The duration of an exemption granted under Article 85(3) of the Treaty - or Article 5 of Regulation No 1017/68 applying rules of competition to certain transport sectors - and Article 53(3) of the EEA Agreement must be sufficient to enable the beneficiaries to achieve the benefits justifying such exemption. Where such benefits cannot be achieved without considerable investment, the length of time required to ensure a proper return on that investment is necessarily an essential factor to be taken into account when determining the duration of the exemption, particularly in a case where the exemption concerns an agreement to set up a joint venture offering services which are completely new, involving major investments and substantial financial risks and requiring the pooling of know-how by the participating undertakings.

Parties

In Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94,

European Night Services Ltd (ENS), a company incorporated under English law, established in London,

Eurostar (UK) Ltd, formerly European Passenger Services Ltd (EPS), a company incorporated under English law, established in London,

represented by Thomas Sharpe QC, of the Bar of England and Wales, and Alexandre Nourry, Solicitor, with an address for service in Luxembourg at the Chambers of Elvinger, Hoss & Prussen, 15 Côte d'Eich,

applicants, respectively, in Cases T-374/94 and T-375/94,

Union Internationale des Chemins de Fer (UIC), an association constituted under French law, established in Paris,

NV Nederlandse Spoorwegen (NS), a company incorporated under Netherlands law, established in Utrecht, the Netherlands,

represented by Erik H. Pijnacker Hordijk, of the Amsterdam Bar, with an address for service in Luxembourg at the Chambers of Luc Frieden, 62 Avenue Guillaume,

applicants in Case T-384/94,

and

Société Nationale des Chemins de Fer Français (SNCF), a company incorporated under French law, established in Paris, represented by Chantal Momège, of the Paris Bar, with an address for service in Luxembourg at the Chambers of Alex Schmitt, 62 Avenue Guillaume,

applicant in Case T-388/94 and intervener in Cases T-374/94 and T-384/94,

supported by

United Kingdom of Great Britain and Northern Ireland, represented by Lindsey Nicoll, acting as Agent, and by Paul Lasok QC, of the Bar of England and Wales, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt,

intervener,

v

Commission of the European Communities, represented initially by Francisco Enrique González Díaz, of its Legal Service, then by Giuliano Marenco, Principal Legal Adviser, acting as Agents, assisted by Ami Barav, of the Bar of England and Wales and of the Paris Bar, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for annulment of Commission Decision 94/663/EC of 21 September 1994 relating to a proceeding pursuant to Article 85 of the EC Treaty and Article 53 of the EEA Agreement (IV/34.600 - Night Services) (OJ 1994 L 259, p. 20),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

(Second Chamber),

composed of: A. Kalogeropoulos, President, C.W. Bellamy and J. Pirrung, Judges,

Registrar: H. Jung,

having regard to the written procedure and further to the hearing on 22 October 1997,

gives the following

Judgment

Grounds

Legal background

1 Council Directive 91/440/EEC of 29 July 1991 on the development of the Community's railways (OJ 1991 L 237, p. 25) seeks to facilitate the adaptation of the Community's railways to the needs of the single market and to increase their efficiency. First, it ensures the management independence of the railway undertakings in order to enable them to behave in a commercial manner. Article 5(3) provides in that regard that such undertakings are to be `free to:

- establish with one or more other railway undertakings an international grouping;

...

- control the supply and marketing of services and fix the pricing thereof ...;

...

- expand their market share, develop new technologies and new services and adopt any innovative management techniques;

- establish new activities in fields associated with railway business'.

2 Second, it provides for separating the management of railway infrastructure from the provision of railway transport services, separation of accounts being compulsory and organisational separation optional (Article 1 and Section III of the directive).

3 Finally, the directive constitutes a first step towards progressive liberalisation of the market for transport by rail in that, for the first time, it gives railway undertakings engaged in international combined transport and associations of railway undertakings a right of access to infrastructure within the Community, subject to certain conditions, as from 1 January 1993.

4 Article 10 of the directive provides:

`1. International groupings shall be granted access and transit rights in the Member States of establishment of their constituent railway undertakings, as well as transit rights in other Member States, for international services between the Member States where the undertakings constituting the said groupings are established.

2. Railway undertakings within the scope of Article 2 shall be granted access on equitable conditions to the infrastructure in the other Member States for the purpose of operating international combined transport goods services.

...'

5 Article 3 defines a railway undertaking as `any private or public undertaking whose main business is to provide rail transport services for goods and/or passengers with a requirement that the undertaking should ensure traction' and an international grouping of railway undertakings as `any association of at least two railway undertakings established in different Member States for the purpose of providing international transport services between Member States'.

6 On 19 June 1995, with a view to the implementation of Directive 91/440, the Council adopted Directive 95/18/EC on the licensing of railway undertakings (OJ 1995 L 143, p. 70) and Directive 95/19/EC on the allocation of railway infrastructure capacity and the charging of infrastructure fees (OJ 1995 L 143, p. 75).

Facts

7 On 29 January 1993 the Commission received an application seeking a declaration that Article 2 of Regulation (EEC) No 1017/68 of the Council of 19 July 1968 applying rules of competition to transport by rail, road and inland waterway (OJ, English Special Edition 1968 (I), p. 302) did not apply to a number of agreements concerning the carriage of passengers by rail through the Channel Tunnel or, failing that, exemption of the agreements under Article 5 of the regulation.

8 That application (`the notification') was lodged by European Night Services Ltd (`ENS') on behalf of British Rail (`BR'), Deutsche Bundesbahn (`DB'), NV Nederlandse Spoorwegen (`NS') and Société Nationale des Chemins de Fer Français (`SNCF'). It had previously been approved by Société Nationale des Chemins de Fer Belges (`SNCB'), which at that time had an option to participate in ENS, although that option lapsed in July 1993. SNCB is still a party to one of the operating agreements concluded with ENS.

9 The first agreement notified concerned the formation, by the four railway undertakings mentioned above - BR, SNCF, DB and NS - either directly or through subsidiaries owned by them, of ENS, a company established in the United Kingdom whose business was to consist of providing and operating overnight passenger rail services between points in the United Kingdom and the Continent through the Channel Tunnel, on the following four routes: London-Amsterdam, London-Frankfurt/Dortmund, Glasgow/Swansea-Paris and Glasgow/Plymouth-Brussels.

10 By letter of 15 October 1997, however, ENS informed the Court that the rail services to and from Brussels had been abandoned in December 1994, that the London-Frankfurt/Dortmund route had been replaced by London-Cologne in August 1996 and that the only routes now envisaged were London-Amsterdam/Cologne.

11 On 9 May 1994, European Passenger Services Ltd (`EPS'), which was a subsidiary of BR when the ENS agreements were notified, was transferred by BR to the public authorities in the United Kingdom and now ranks as a railway undertaking within the meaning of Article 3 of Directive 91/440, in the same way as SNCF, DB and NS (all hereinafter referred to, including EPS, as `the railway undertakings concerned' or `the parent undertakings'). At the same time, BR's holding in ENS was transferred to EPS. By letter of 25 September 1997, ENS and EPS informed the Court that EPS's name had been changed to Eurostar (UK) Ltd (`EUKL') and requested that any reference to EPS be deemed to refer to EUKL and vice versa. They further announced that the holding of the United Kingdom public authorities in EPS had been transferred to London & Continental Railways on 31 May 1996. In the United Kingdom, virtually all of the railway track and associated infrastructure, previously owned by BR, is now owned by Railtrack, the railway infrastructure manager.

12 The second group of agreements notified comprised the operating agreements concluded by ENS with the railway undertakings concerned and with SNCB, under which each of them agreed to provide ENS with certain services, including traction over its network (locomotive, train crew and path), cleaning services on board, servicing of equipment and passenger-handling services. EPS and SNCF further agreed to provide traction through the Channel Tunnel.

13 In order to operate the night passenger services, the railway undertakings concerned have procured, through ENS, specialised rolling stock suitable for running on the different rail systems and through the Channel Tunnel, financed through long-term leasing arrangements over 20 years, extended to 25 years in January 1996, at a total cost of UKL 136.7 million, increased to UKL 158 million in January 1996, including the contract price, estimated spares costs, variations, deliveries, commissioning and testing and project team costs.

14 In the notification, ENS and the railway undertakings concerned stated that, on the market for the service in question, in competition with air, coach, ferry and car transport, ENS could achieve an overall market share of some 2.4% of the business segment and 5% of the leisure segment. Even if that market were defined more narrowly, taking account only of the routes concerned, ENS's overall market shares would remain insignificant. None of the railway undertakings concerned could operate alone a comparable service on the routes served by ENS, nor was there any indication that any other group had expressed an interest in, or could derive any profit from, the same activity. The notifying parties further gave the assurance that the ENS agreements did not create any barriers to entry additional to those already in place for any other undertakings wishing to provide similar services, which could constitute `international groupings' within the meaning of Article 3 of Directive 91/440; such groupings would thus gain access to railway infrastructures - train-paths on the relevant lines - and would have no difficulty in finding qualified staff and suitable rolling stock.

15 Pursuant to Article 12(2) of Regulation No 1017/68, a notice concerning the notification of the ENS agreements was published in the Official Journal of the European Communities on 29 May 1993 (Notice 93/C 149/07, OJ 1993 C 149, p. 10). In it, the Commission informed the notifying undertakings that it took the preliminary view that the agreements notified could infringe Article 85(1) of the EC Treaty but that it had not at that stage taken a decision as to the applicability of Article 5 of Regulation No 1017/68. It invited all interested third parties to submit their observations within 30 days of the publication of the notice.

16 By letter of 23 July 1993, the Commission informed the notifying undertakings that there were serious doubts within the meaning of Article 12(3) of Regulation No 1017/68 as to the applicability of Article 5 thereof to the agreements notified.

17 On 4 June 1994, the Commission published a further notice in the Official Journal of the European Communities pursuant to Article 26(3) of Regulation No 1017/68 (OJ 1994 C 153, p. 15), in which it announced that the agreements notified could qualify for exemption pursuant to Article 85(3) of the Treaty and Article 53(3) of the Agreement on the European Economic Area (`the EEA Agreement'), provided - essentially - that new entrants would be able to purchase from the notifying parties the same rail services as those parties had undertaken to sell to ENS. At the same time, the Commission invited all interested third parties to submit their observations within 30 days of the publication of the notice. However, no third party responded to that invitation.

The contested decision

18 On 21 September 1994 the Commission adopted Decision 94/663/EC relating to a proceeding pursuant to Article 85 of the EC Treaty and Article 53 of the EEA Agreement (IV/34.600 - Night Services) (OJ 1994 L 259, p. 20, hereinafter `the decision' or `the contested decision'). It is based on Regulation No 1017/68, in particular on Article 5 thereof, under which the prohibition of restrictive practices laid down in Article 2, in terms almost identical to those of Article 85(1) of the Treaty, may be declared inapplicable with retroactive effect to certain agreements between undertakings.

19 The decision distinguishes two relevant service markets: the market for the transport of business travellers, for whom scheduled air travel, high-speed rail travel and the rail services to be operated by ENS are interchangeable modes of transport (point 26), and the market for the transport of leisure travellers, for whom substitute services may include economy-class air travel, train, coach and possibly private motor car (point 27).

20 Contrary to what the notifying parties had maintained, the Commission states that the geographic market does not include the whole of the United Kingdom, France, Germany and the Benelux countries, but is confined to the four routes actually to be served by ENS, namely London-Amsterdam, London-Frankfurt/Dortmund, Paris-Glasgow/Swansea and Brussels-Glasgow/Plymouth (point 29).

21 The decision goes on, referring to the 1993 Commission notice of 16 February 1993 concerning the assessment of cooperative joint ventures pursuant to Article 85 of the EEC Treaty (OJ 1993 C 43, p. 2; hereinafter `the 1993 communication'), to find that ENS is a cooperative joint venture (points 30 to 37). It states that ENS's parent undertakings are not withdrawing permanently from the relevant market, since their technical and financial resources could easily enable them to set up an international grouping within the meaning of Article 3 of Directive 91/440 and to provide overnight passenger transport services. Furthermore, they continue to operate primarily on a market upstream from ENS's market, namely the market in necessary rail services which the railway undertakings sell to transport operators such as ENS. The ENS joint venture thus forms an agreement caught by Article 85 of the EC Treaty, as do the operating agreements between it and each of its parent undertakings and SNCB.

22 The decision then notes the restrictions of competition arising out of the ENS agreements (points 38 to 53).

23 First, those agreements have eliminated or appreciably restricted, as between ENS's parent undertakings, the scope for competition provided by Article 10 of Directive 91/440 (points 38 to 45). Both existing and new railway undertakings, including subsidiaries of existing ones, are entitled to the rights of access conferred by that provision, and Member States may enact domestic legislation which is more generous in the access it allows to infrastructure. Thus, for example, DB or NS would be entitled to form an international grouping with a railway undertaking in the United Kingdom to operate international transport services through the Channel Tunnel. Similarly, any of ENS's parent undertakings could itself take on the role of `transport operator', or set up a subsidiary specialising as a `transport operator', and provide international transport services by buying the necessary rail services from the railway undertakings concerned.

24 Second, given the commercial strength of the parent undertakings, the formation of ENS might impede access to the market by transport operators in a position to compete with it (points 46 to 48). ENS's parent undertakings continue to hold a dominant position in the supply of rail services in their Member States of origin, especially as regards special locomotives for the Channel Tunnel. In view of ENS's direct access to those services and of its special relationship with its parent undertakings, other operators could be placed at a disadvantage in competition for necessary rail services. Account also has to be taken of the fact that BR and SNCF control a significant proportion of available paths for international trains through the Channel Tunnel, by virtue of the usage contract concluded with Eurotunnel.

25 Finally, those restrictions of competition are enhanced by the fact that ENS forms part of a network of joint ventures between the parent undertakings. BR/EPS, SNCF, DB and NS take part to varying degrees in a network of joint ventures for the operation of goods and passenger transport services, in particular through the Channel Tunnel. BR and SNCF are parties to the formation of Allied Continental Intermodal Services Ltd (`ACI'), which is to provide combined transport of goods, and BR and SNCB are parties to the formation of `Autocare Europe', which is to provide rail transport for motor vehicles (points 49 to 52).

26 However, according to the decision, the agreements in issue, although they do not fall within the exception for technical agreements under Article 3 of Regulation No 1017/68, since they do not have as their sole object and sole effect to apply technical improvements or to achieve technical cooperation within the meaning of that article (points 55 to 58), do meet the conditions laid down by Article 5 of that regulation and Article 53(1) of the EEA Agreement (points 59 to 70). The formation of ENS is likely to favour economic progress by, inter alia, providing competition between modes of transport, and users will benefit directly from the new services offered. The restrictions found to exist are, moreover, indispensable in view of the fact that the services involved are completely new, entailing substantial financial risks which could be borne by a single undertaking only with great difficulty. Subject, therefore, to the imposition of a condition to ensure the presence on the market of rail transport operators competing with ENS, the formation of ENS does not eliminate all competition on the relevant market.

27 The decision therefore declares Article 85(1) of the Treaty and Article 53(1) of the EEA Agreement inapplicable to the ENS agreements for a period of eight years, ending on 31 December 2002 (Article 1 of the decision) and subjects that exemption to the condition (`the condition imposed') that `the railway undertakings party to the ENS agreements shall supply to any international grouping of railway undertakings or any transport operator wishing to operate night passenger trains through the Channel Tunnel the same necessary rail services as they have agreed to supply to ENS. These services consist of the provision of the locomotive, train crew and path on each national network and in the Channel Tunnel. The railway undertakings must supply these services on their networks on the same technical and financial terms as they allow to ENS' (Article 2 of the decision).

Procedure

28 By applications lodged at the Registry of the Court of First Instance on 22 November 1994, ENS and EPS brought actions, registered as Cases T-374/94 and Case T-375/94 respectively.

29 By application lodged at the Court Registry on 5 December 1994, Union Internationale des Chemins de Fer (`UIC') and NS brought an action, registered as Case T-384/94.

30 By application lodged at the Court Registry on 13 December 1994, SNCF brought an action, registered as Case T-388/94.

31 By separate document lodged at the Court Registry on 6 February 1995, the Commission raised an objection of inadmissibility in Case T-388/94, under Article 114 of the Rules of Procedure of the Court of First Instance. The applicant lodged observations on that objection on 20 March 1995.

32 On 28 June 1995, the Court of First Instance (First Chamber, Extended Composition) made an order joining consideration of the objection of inadmissibility raised by the Commission to that of the merits. On the same day, it requested SNCF to answer a number of questions in writing and to produce certain documents.

33 By orders of the President of the First Chamber (Extended Composition) of 9 August 1995, the applications of the International Union of Combined Rail-Road Transport for leave to intervene in support of the forms of order sought by the Commission in Cases T-374/94, T-375/94 and T-384/94, lodged at the Court Registry on 3 April 1995, were dismissed.

34 By order of the President of the First Chamber (Extended Composition) of 9 August 1995, the applications of SNCF for leave to intervene in support of the forms of order sought by the applicants in Cases T-374/94 and T-384/94, lodged at the Court Registry on 9 May 1995, were granted.

35 By orders of the President of the First Chamber (Extended Composition) of 14 July and 10 August 1995, the United Kingdom was granted leave to intervene in support of the forms of order sought by the applicants in Cases T-374/94, T-375/94, T-384/94 and T-388/94.

36 By decision of the Court of First Instance of 2 October 1995, the Judge-Rapporteur was transferred to the Second Chamber (Extended Composition), to which the cases were accordingly assigned.

37 By decision of the Court of First Instance of 8 November 1996, the case was referred to a Chamber of three judges.

38 By order of the President of the Second Chamber of 6 August 1997, Cases T-374/94, T-375/94, T-384/94 and T-388/94 were joined for the purposes of the oral procedure and the judgment.

39 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Second Chamber) decided to open the oral procedure without any preparatory inquiry. It requested the parties, however, to answer a number of written questions, which they did within the period prescribed.

40 The parties presented oral argument and answered the questions put by the Court at the hearing on 22 October 1997.

Forms of order sought

41 In Cases T-374/94 and T-375/94, ENS and EPS claims that the Court should:

- annul the decision;

- require the Commission

(a) to issue a declaration as to the inapplicability of Article 2 of Regulation No 1017/68 and Article 85(1) of the Treaty, or

(b) to grant an exemption without the condition imposed and for a duration commensurate with the period of the commitment of the railways for the financing of the rolling stock, or

(c) alternatively, to grant the exemption subject to any condition necessary and proportionate to the alleged restrictions on competition and for a period commensurate with the period of commitment of the railways for the financing of the rolling stock; and

- order the Commission to pay the costs.

42 SNCF, intervening in support of the forms of order sought by the applicant in Case T-374/94, claims that the Court should:

- annul the decision; and - require the Commission either

(a) to issue a declaration as to the inapplicability of Article 2 of Regulation No 1017/68 and Article 85(1) of the Treaty, or

(b) to grant an exemption without the condition imposed and for a duration commensurate with the period of the commitment of the railways for the financing of the rolling stock.

43 In Cases T-374/94 and T-375/94, the Commission contends that the Court should:

- dismiss the applications;

- dismiss the arguments raised by SNCF; and

- order the applicants and the intervener to pay the costs.

44 In Case T-384/94, UIC and NS claim that the Court should:

- declare the contested decision void in its entirety;

- in the alternative, declare void Article 2 of the decision, as well as Article 1 thereof in so far as the duration of the exemption is limited to a period of less than 20 years;

- take any further or alternative measures which the Court may deem appropriate; and

- order the Commission to pay the costs.

45 SNCF, intervening in support of the forms of order sought by the applicants, claims that the Court should:

- declare the contested decision void in its entirety;

- in the alternative, declare void Article 2 of the decision, as well as Article 1 thereof in so far as the duration of the exemption is limited to a period of less than 20 years;

- take any further or alternative measures which the Court may deem appropriate; and

- order the Commission to pay the costs.

46 The Commission contends that the Court should:

- declare inadmissible and, in any event, unfounded, the application by UIC;

- dismiss the application by NS;

- dismiss the arguments raised by the intervener; and

- order the applicants and the intervener to pay the costs.

47 In Case T-388/94, SNCF claims that the Court should:

- annul the contested decision;

- in the alternative, annul Article 2 of the decision in that the condition imposed is unjustified, as well as Article 1 thereof in so far as the Commission granted an exemption for a period of less than 20 years;

- take any measures which the Court may deem appropriate; and

- order the Commission to pay the costs.

48 In its observations on the objection of inadmissibility raised by the Commission, SNCF claims that the Court should:

- find the application admissible; and

- order the Commission to pay the costs.

49 The Commission contends that the Court should:

- dismiss the application as inadmissible and, in any event, as unfounded; and

- order the applicant to pay the costs.

50 The United Kingdom, intervening in support of the forms of order sought by the applicants in Cases T-374/94, T-375/94, T-384/94 and T-388/94, claims that the Court should:

- annul the contested decision; and

- order the Commission to pay the costs.

Admissibility

Admissibility of the applications in Cases T-374/94 and T-375/94

Arguments of the parties

51 The Commission considers that the applications are inadmissible to the extent that the applicants, ENS and EPS, seek an order of the Court requiring the Commission (a) to issue a declaration as to the inapplicability of Article 2 of Regulation No 1017/68 and Article 85(1) of the Treaty, (b) to grant an exemption without the condition imposed by the Commission and for a duration commensurate with the period of the commitment of the railway undertakings for the financing of the rolling stock, or (c) alternatively, to grant the exemption subject to any condition necessary and proportionate to the alleged restrictions on competition and for a period commensurate with the period of the commitment of the railway undertakings for the financing of the rolling stock, since it has consistently been held that the Community judicature has no power to issue directions to the institutions or to substitute itself for them when reviewing legality under Article 173 of the Treaty (Case T-74/92 Ladbroke Racing v Commission [1995] ECR II-115, paragraph 75).

52 The applicants, ENS and EPS, note in reply that the Commission does not contest either the admissibility of their applications in so far as they seek annulment of the decision or the possibility for the Court of annulling it in part, namely as regards the condition imposed by Article 2.

Findings of the Court

53 It is settled case-law that the Community judicature is not entitled, when exercising judicial review of legality, to issue directions to the institutions or to assume the role assigned to them; rather, it is for the administration concerned to adopt the necessary measures to implement a judgment given in proceedings for annulment. Accordingly, the forms of order sought by the applicants, as set out under (a), (b) and (c) in paragraph 41 above, must be rejected as inadmissible (Case T-67/94 Ladbroke Racing v Commission [1998] ECR II-1, paragraph 200). The applications in Cases T-374/94 and T-375/94 are thus admissible only in so far as they seek the annulment of the contested decision in its entirety (see paragraph 41 above).

Admissibility of the application in Case T-384/94

Arguments of the parties

54 The applicants, UIC and NS, state that UIC is an international association of railway undertakings, including all the larger railway undertakings established in the Member States of the European Community, with the object of promoting cooperation between members and carrying out activities to develop the railways as a mode of transport in Europe, by consolidating its interoperability with the aim of strengthening its competitiveness. Under Article 2 of its Statutes, UIC is to develop standards, regulations and guidelines and to intervene in relation to outside bodies to represent and defend its members' common interests. In addition, the railway undertakings established within the Community are represented in a special group called the `Community of European Railways' (`CER').

55 The applicants submit that the decision, although not addressed to UIC, is none the less of direct and individual concern to it within the meaning of Article 173 of the Treaty because it directly affects both UIC's own interests and those of its members established within the Community, which it represents through CER.

56 With regard to the interests of the members of UIC established within the Community, the applicants state that the contested decision constitutes a disincentive to further innovative initiatives for cooperation between railway undertakings for the provision of international passenger transport services, and submit that its application should be held admissible on the same footing as those of its members established within the Community, whether addressees of the decision or not.

57 As regards UIC's own interest in bringing proceedings, the applicants submit that UIC is directly and individually concerned by the decision because it impairs the full realisation of one of the most important objectives in its Statutes - reinforcement of the competitiveness of the international railway system. They add that, even though UIC did not take part in the administrative procedure prior to adoption of the decision (Case T-442/93 AAC v Commission [1995] ECR II-1329), CER, one of its subgroups, did take part in preparatory meetings concerning the adoption of Directive 91/440.

58 The Commission submits that the contested decision is not of direct and individual concern to UIC and that the Court cannot decline to rule on UIC's locus standi. The case-law to the effect that, where a single action is brought by a number of applicants, it is enough for one of them to have locus standi for the action to be found admissible in its entirety, gives rise to difficulties as regards costs and any subsequent right of appeal of the party concerned.

59 It adds that it is clear from the case-law that an association, in its capacity as the representative of a category of business operators, is not individually concerned by a measure affecting the general interests of that category (Joined Cases 16/62 and 17/62 Confédération Nationale des Producteurs de Fruits et Légumes v Council [1962] ECR 471, Case 72/74 Union Syndicale and Others v Council [1975] ECR 401 and Case 60/79 Producteurs de Vins de Table et Vins de Pays v Commission [1979] ECR 2429).

60 It further submits that, since UIC did not take part in the administrative procedure prior to the adoption of the contested decision or submit any observations after publication in the Official Journal of the European Communities of the Commission's notices of 29 May 1993 and 4 June 1994, it has no interest or standing to bring the present action (Case 26/76 Metro v Commission [1977] ECR 1875, Case 210/81 Demo-Studio Schmidt v Commission [1983] ECR 3045 and Case T-114/92 BEMIM v Commission [1995] ECR II-147). Finally, the part played by CER in the context of the adoption of Directive 91/440 cannot distinguish UIC individually in relation to the contested decision.

Findings of the Court

61 The locus standi of NS, as an addressee of the contested decision, is not in dispute. Thus, since one and the same application is involved, there is no need to consider the locus standi of UIC (Case C-313/90 CIRFS and Others v Commission [1993] ECR I-1125, paragraph 31, and Case T-266/94 Skibsværftsforeningen and Others v Commission [1996] ECR II-1399, paragraph 51).

Admissibility of the application in Case T-388/94

Arguments of the parties

62 The Commission states that the contested decision was notified to the applicant by letter dated 22 September 1994, which was received at its head office on 29 September, as attested by the postal acknowledgment of receipt bearing the stamp of SNCF showing that date. According to the judgment in Case 42/85 Cockerill-Sambre v Commission [1985] ECR 3749, at paragraph 11, notification of a measure to a company's registered office meets the requirement of legal certainty and brings that measure to the company's notice, irrespective of whether the person who is competent to deal with the matter according to the internal rules of the company addressed is actually in a position to take cognisance of it.

63 Since, in accordance with Article 102(1) of the Rules of Procedure of the Court of First Instance, the period of time allowed for commencing annulment proceedings is to run from the day following its notification if it has been notified and since in the present case the total period allowed comes to two months, plus an extension of six days on account of distance (Article 102(2) of the Rules of Procedure of the Court of First Instance and Article 1 of Annex II to the Rules of Procedure of the Court of Justice), the final date on which SNCF could commence proceedings against the contested decision was 6 December 1994. Thus, having been lodged on 13 December 1994, the application is out of time and therefore inadmissible (Case 108/79 Belfiore v Commission [1980] ECR 1769, Case 209/83 Ferriera Valsabbia v Commission [1984] ECR 3089, paragraph 14, and Cockerill-Sambre, cited above, paragraph 10).

64 The Commission disputes the applicant's argument that, since the employee to whom the decision was delivered was not authorised to receive mail, the relevant acknowledgment of receipt for calculating the time allowed for commencing proceedings is not that of 29 September 1994 but a second acknowledgment of receipt, the form for which was in the same envelope as the decision and was signed on 7 October 1994 by a person competent to do so. The Commission stresses, first, that, according to the judgment in Case T-12/90 Bayer v Commission [1991] ECR II-219, at paragraph 20, the second form for acknowledgment of receipt contained in the same envelope as the decision can in no event constitute a second notification separate from that effected by postal delivery, since the proper method of giving notice is always by a registered letter with postal acknowledgment of receipt, which makes it possible to determine with certainty the date from which time begins to run. The purpose of sending the second acknowledgment of receipt form is simply that the Commission is thereby able to be certain of a date by which the undertaking concerned has taken cognisance of the decision in cases where the postal authorities fail to return the postal acknowledgment of receipt to the Commission. The precaution of sending a second acknowledgment of receipt form is thus intended not to guard against the possibility that the postal services might make the mistake of delivering the mail to a person employed by the addressee but not authorised to receive registered mail, but rather against the possibility that they might not return the postal acknowledgment of receipt to the Commission. Under French law, moreover, the fact that an acknowledgment of receipt is signed by a servant of a corporate body to which an item of mail is addressed does not render notice served by registered mail with acknowledgment of receipt invalid where that servant is not duly authorised to receive registered mail.

65 With regard to SNCF's arguments of force majeure and unforeseeable circumstances, the Commission submits that, according to the case-law of the Court of Justice, a company's internal problems of communication do not constitute unforeseeable circumstances or force majeure (Cockerill-Sambre, cited above, paragraph 12), in particular where the malfunctioning is attributable to faults on the part of its employees (Case C-195/91 P Bayer v Commission [1994] ECR I-5619, paragraph 33).

66 Finally, with regard to SNCF's argument of excusable error, the Commission submits that the concept of excusable error can apply only to exceptional circumstances where, in particular, the conduct of the institution concerned was such as to give rise to understandable confusion in the mind of a person acting in good faith and exercising all the diligence to be expected of an experienced operator (Case T-514/93 Cobrecaf and Others v Commission [1995] ECR II-621, paragraph 40). In the present case, however, the error was ascribable to a person other than the Commission.

67 SNCF claims that the notification was irregular or, in the alternative, that even if it was regularly effected, the circumstances surrounding the receipt of the decision amounted to force majeure, unforeseeable circumstances or excusable error.

68 In its argument that the notification was irregular, it states that in French law, under Article L 9 of the Code des Postes et Télécommunications (Post and Telecommunications Code), a registered letter must be delivered personally to its addressee or to the addressee's `authorised agent or manager'. The postal acknowledgment of receipt attesting to its receipt of the decision is thus not valid. In the first place, it was not signed by one of the persons to whom SNCF had specifically delegated authority to sign such acknowledgments. Secondly, the postal employee accepted signature of the acknowledgment of receipt by a person not authorised to do so. Finally, the acknowledgment of receipt was returned to the Commission by the French postal services in breach of their duty to verify that the signature on it corresponded to that of the person authorised to sign it.

69 SNCF submits that according to the case-law, the signature of a postal acknowledgment of receipt form by an authorised employee in the mail service of the undertaking concerned is a decisive factor in determining whether notification has been properly effected to that undertaking (Case T-12/90 Bayer, cited above, paragraphs 4 and 20; Opinion of Advocate General Darmon in Cockerill-Sambre, cited above), as the Commission itself accepted in the Ferriera Valsabbia case, cited above.

70 Consequently, in SNCF's submission, the relevant acknowledgment of receipt in the present case is that contained on the Commission's own form, included with the decision in order to enable it to be certain of a date by which the undertaking has taken cognisance of the decision in the event of a failure on the part of the postal authorities (Case T-12/90 Bayer, cited above). The kinds of failure to which the case-law refers involve not only instances where the postal services fail to return the acknowledgment of receipt to the Commission but also those where their failure takes the form of indicating a date on the acknowledgment of receipt form themselves without obtaining the signature of a duly authorised representative of the undertaking concerned; if the postal services commit an error when performing their duty of delivering registered mail, therefore, the information stated on the form should be disregarded (Joined Cases T-80/89, T-81/89, T-83/89, T-87/89, T-88/89, T-90/89, T-93/89, T-95/89, T-97/89, T-99/89, T-100/89, T-101/89, T-103/89, T-105/89, T-107/89 et T-112/89 BASF and Others v Commission [1995] ECR II-729, paragraphs 54 to 60). The date of receipt, and consequently that of notification, should accordingly be 7 October 1994, as indicated on the second acknowledgment of receipt.

71 In the alternative, SNCF submits that, even if its application was in fact lodged out of time, the delay was due to unforeseeable circumstances or force majeure, in that the signature of the acknowledgment of receipt form by an unauthorised person was quite contrary to its intention and it had taken all necessary care to ensure that registered mail was received in the proper manner. It stresses that the post office employee who delivered the notification on 29 September 1994 was specifically aware that the person who received it was not authorised to do so, and adds that the French courts treat delivery of mail to a person not authorised to receive it as a serious fault on the part of the postal services, such as to cause the administration to incur liability.

72 In SNCF's submission, even if the circumstances surrounding the notification of the contested decision do not constitute force majeure, they are at least such as to give rise to excusable error. It refers to its arguments concerning the fact that the postal services failed to comply with its specific instructions concerning delivery of registered mail and submits that, in view of the way in which those services generally perform their duties, their failure in this instance was an isolated and exceptional case. Excusable error is established when an exceptional failure on the part of the postal services has given rise to confusion within the undertaking in receipt of the notification; it is not confined solely to cases where such confusion was caused by the Commission (Case C-195/91 P Bayer, cited above, paragraph 26).

73 Furthermore, SNCF claims that the Commission's practice with regard to the notification of decisions is lax and that in this case SNCF's error was in part caused by that practice. Where much less important letters (containing information on the lodging of a complaint or inviting observations) are concerned, the Commission takes care to indicate the addressee by name, whereas here a final decision applying Article 85(1) of the Treaty, against which an action could be brought, was sent without any such indication.

74 Finally, SNCF draws attention to the deceptive and misleading nature of the Commission's practice in enclosing its own acknowledgment of receipt form with decisions when notifying them to undertakings, without informing addressees that a decision is considered to have been notified when the addressee has received the registered letter and signed the postal acknowledgment of receipt.

Findings of the Court

75 First of all, it is common ground that in accordance with the third paragraph of Article 173 of the Treaty, read in conjunction with Article 102(2) of the Rules of Procedure of the Court of First Instance and Article 1 of Annex II to the Rules of Procedure of the Court of Justice, to which Article 102(2) refers, the period for initiating proceedings in the present case was two months and six days.

76 It has, moreover, consistently been held that the strict application of Community rules on procedural time-limits serves the requirement of legal certainty and the need to avoid any discrimination or arbitrary treatment in the administration of justice. It is also settled law that where a measure is notified to the registered office of an undertaking, the validity of that notification is in no way conditional on its having been actually brought to the notice of the person competent to deal with it according to that undertaking's internal rules, and that a decision is duly notified once it has been communicated to the addressee and the addressee is in a position to take cognisance of it (Cockerill-Sambre, cited above, paragraph 10, and BASF and Others, cited above, paragraphs 58 and 59).

77 It is therefore necessary to examine whether the contested decision was properly notified to SNCF in accordance with the rules applicable to mail deliveries in France, that is to say, whether it was delivered to an employee of SNCF duly authorised to receive such mail (BASF and Others, cited above, paragraph 60).

78 It is clear from the case-file and from SNCF's answers to the written questions put by the Court that the French postal services, although they had in their possession valid instructions from SNCF delegating to specified persons authority to receive mail addressed to its various departments and staff, did not deliver the contested decision to one of those persons but to another person who had no such authority. As the applicant has stressed, however, without being contradicted by the Commission, the rules applicable to the delivery of mail in France require postal employees to deliver registered mail only to the persons to whom it is addressed by name or, in their absence, to authorised agents or managers, that is to say, persons having valid authority for that purpose.

79 Consequently, the contested decision, having been delivered in breach of those rules to an employee of the applicant who was not authorised to take delivery of mail, was not properly notified to SNCF, and the period of time allowed for commencing proceedings thus began to run only from the receipt and signature of the second form for acknowledgment of receipt on 7 October 1994, and not from the date of signature of the first acknowledgment of receipt on 29 September 1994. The judgment in Cockerill-Sambre, cited by the Commission in support of its plea that the application was lodged out of time, is irrelevant here because that case did not turn on whether a Commission decision was properly notified to an agent of the undertaking concerned duly authorised to receive such mail but on whether, following proper notification at its registered office, that undertaking could justify a delay in commencing annulment proceedings by relying on its internal rules as to the persons competent actually to take cognisance of mail addressed to it (see paragraph 10 of the judgment in Cockerill-Sambre, cited above). Similarly, in Case C-195/91 P Bayer, cited above, it was not contested that notification of the contested decision had been properly effected by the postal services to an `agent or manager' in Bayer's mail department. The judgment in that case, too, concerned only whether, even though the Commission's decision had been properly notified to Bayer's registered office, Bayer could none the less rely on deficiencies in the functioning of its internal services to justify having commenced annulment proceedings out of time (paragraphs 2 and 20 of the judgment). Here, however, as noted above, the point in issue is whether notification as such was properly effected; it thus concerns the functioning of the postal services (the external aspect of the notification) rather than SNCF's internal functioning (the internal aspect).

80 Proceedings were therefore commenced within the period of time allowed, and the application must thus be held to be admissible.

Substance

81 In the pleas in law and arguments which they put forward, the applicants submit that the contested decision should be annulled for, in substance, four reasons: (a) none of the constituent elements of the conduct prohibited by Article 85(1) of the Treaty is established in the present case, since the ENS agreements do not restrict competition, and the decision is therefore vitiated by inaccurate and incomplete assessment of the facts, manifest error in law and a failure to state reasons; (b) in its application of the rules on competition, the Commission exceeded the limits of the regulatory framework laid down by Directive 91/440; (c) the Commission imposed disproportionate conditions on its granting of the exemption; and (d) the duration of the exemption granted for the notified agreements (eight years) is too short. Finally, in Case T-384/94, SNCF submits in addition that the contested decision should be annulled because the Commission considered that the ENS agreements did not qualify for the exception for technical agreements under Article 3 of Regulation No 1017/68.

The first plea: inaccurate and incomplete assessment of the facts, manifest error in law and/or breach of the obligation to provide an adequate statement of reasons for the contested decision in so far as the Commission concluded that the creation of ENS had as its object and effect the restriction of competition

82 This plea falls in two parts: first, that the relevant market was wrongly defined and that the ENS agreements have no appreciable effect on trade between Member States and, second, that those agreements have no restrictive effect on competition.

First part: definition of the relevant market and absence of any appreciable effect of the ENS agreements on trade between Member States

Arguments of the parties

83 The applicants point out that in the decision the Commission defined the relevant markets as those for the transport of business travellers and of leisure travellers on each of the routes served by ENS. They state that, based on forecast levels of demand in 1995 (set out in Table 17, at p. 26 of their notification), ENS services were likely to account for no more than 4% of those markets (2.4% of the market for business travellers and 5% of the market for leisure travellers). Taking account of the Commission's notice of 3 September 1986 on agreements of minor importance which do not fall under Article 85(1) of the Treaty establishing the European Economic Community (OJ 1986 C 231, p. 2), those market shares are thus negligible. Even on an individual route basis, Table 17 in the notification demonstrates that the only market shares in excess of 4% likely to be enjoyed by ENS were 6% and 7% for leisure travellers on the London-Amsterdam and London-Frankfurt/Dortmund routes respectively. As regards the Commission's view that a 5% market share warrants considering the undertaking concerned to be of sufficient importance for its behaviour to be in principle capable of affecting trade between Member States, the applicants refer to Case T-7/93 Langnese-Iglo v Commission [1995] ECR II-1533 and Case T-9/93 Schöller v Commission [1995] ECR II-1611, which confirm that a market share of over 5% is insufficient by itself to allow the conclusion that there is an appreciable restriction of competition. The point was also made in the notification that ENS's market share was likely to remain static or even fall as the market grew faster than ENS's ability to increase the frequency of its services (paragraph II.4.c.6, p. 27 of the notification). The relevant market for both services (business and leisure travel), therefore, is very large and it is clear that ENS would have no power to control the price, quality and availability of services or to exclude or weaken competition.

84 The Commission's statement in its defence, that ENS's market share should be measured in relation to early morning and late evening flights rather than by reference to all the flights available round the clock on a given route, is, in the applicants' submission, a redefinition of the relevant market, made without any probative evidence in support.

85 The Commission submits that ENS's market share should not be calculated, as proposed by the parties in their notification, in relation to the general market for the transport of passengers between the United Kingdom, on the one hand, and France, Germany and the Benelux countries, on the other hand, a geographical market on which ENS was expected to have 2.4% of the business travel segment and 5% of the leisure travel segment, making an overall market share of around 4%. The relevant market is confined to the routes actually to be served by ENS, namely London-Amsterdam, London-Frankfurt, Paris-Glasgow/Swansea and Brussels-Glasgow/Plymouth (decision, point 29). On the basis of that definition, ENS would have a market share of at least 7% of the business segment and 8% of the leisure segment of the market, according to the figures supplied by the parties to the ENS agreement in their notification.

86 According to case-law, a 5% market share warrants considering an undertaking to be of sufficient importance for its behaviour to be in principle capable of affecting trade between Member States (Case 19/77 Miller v Commission [1978] ECR 131, Joined Cases 100/80 to 103/80 Musique Diffusion Française and Others v Commission [1983] ECR 1825 and Case 107/82 AEG v Commission [1983] ECR 3151). The same rule must apply to restrictions of competition liable to result from an agreement between undertakings. In that regard, the Commission submits that, contrary to the applicants' contention, it is not clear from the Langnese-Iglo and Schöller judgments, cited above, that a market share of over 5% is insufficient by itself to conclude that there is an appreciable restriction of competition.

87 Furthermore, in the Commission's submission, ENS's market share in the business travel segment of the relevant market is considerably larger. It is clear from the analysis in the notification that ENS's share in that segment should be measured in relation solely to early morning and late evening flights rather than by reference to all the flights available round the clock on a given route. In addition, the Commission emphasises that the market share forecast concerned only 1995, the first year during which ENS services were expected to start operation, and that, in view of the effective strength of the railway undertakings concerned on the relevant markets and their actual and potential customer base, it was likely that the market share would increase. The Commission therefore considers itself justified in taking the view that the ENS agreements eliminate or appreciably restrict the scope of competition.

88 The United Kingdom, in intervention, submits that the Commission's definition of the relevant markets was artificially narrow. First, the geographical market should include the whole of the United Kingdom, France, Belgium, the Netherlands, Luxembourg and Germany. Second, the fact that the relevant markets encompass different modes of transport is taken into account only in the part of the decision relating to the granting of an exemption under Article 85(3) of the Treaty. Finally, in the United Kingdom's submission, parties to an agreement having a market share of less than 10% do not, in general, exercise any market power, whatever their level of turnover, so that below that threshold there must be specific circumstances for the anti-competitive object or effect of the agreement to be sufficiently deleterious or appreciable.

89 The Commission replies that the United Kingdom's suggestion that only a market share of 10% can justify application of Article 85(1) of the Treaty is unfounded in the case-law.

Findings of the Court

90 First of all, it must be noted that, in order to assess the effects of the ENS agreements on competition and on trade between Member States, the Commission defined two relevant service markets in the decision: the market for the transport of business travellers, for whom scheduled air travel and high-speed rail travel are interchangeable modes of transport (the `intermodal' market for business travel), and the market for the transport of leisure travellers, for whom substitute services may include economy-class air travel, train, coach and possibly private motor car (the `intermodal' market for leisure travel) (see points 26 and 27 of the decision).

91 The Commission went on to consider, referring to Case 66/86 Ahmed Saeed Flugreisen and Silver Line Reisebüro v Zentrale zur Bekämpfung unlauteren Wettbewerbs [1989] ECR 803, that the relevant geographical market should be confined to the routes actually to be served by ENS (points 28 and 29 of the decision), namely:

- London-Amsterdam, - London-Frankfurt/Dortmund, - Paris-Glasgow/Swansea and - Brussels-Glasgow/Plymouth.

92 As that definition of the geographical market has not been challenged by the applicants, it follows that the ENS agreements fell to be assessed solely on the basis of the four separate geographical markets listed above and solely in the context of an intermodal market comprising various modes of transport such as rail, air, coach and motor car. On that basis, therefore, it is necessary to examine whether the Commission correctly evaluated ENS's market shares in order to arrive at the conclusion that the ENS agreements would have an appreciable effect on trade between Member States, bearing in mind that, according to the applicants' notification, those market shares would not exceed the critical threshold of 5% and would, in any event, be insignificant.

93 It is to be noted here that the contested decision makes no reference to the market shares of ENS or of any other operators competing with ENS and also present on the various intermodal markets taken by the Commission as the relevant markets for the purposes of applying Article 85(1) of the Treaty. Consequently, even if - contrary to the applicants' submission - the ENS agreements were to restrict competition, the Court is not in a position, in the absence of any such data concerning the analysis of the relevant market in the contested decision, to make any finding as to whether the supposed restrictions on competition have an appreciable effect on trade between Member States and are thus caught by Article 85(1) of the Treaty, having regard, in particular, to the intermodal competition which is, according to the decision itself, a feature of the two service markets in question.

94 It was not until the stage of the proceedings before the Court that the Commission first referred to the notification submitted by the parties in support of its contention that `even on the basis of the conservative - and by nature therefore restrictive - forecasts of ENS which are based on a narrower definition of the market, the Night Services' share of the business segment of the market is 7%, and 8% in the case of the leisure segment of the market'. It was also during the written procedure that it first asserted that ENS's market share should be calculated, for the business segment, in relation to early morning and late evening flights rather than by reference to all the flights available round the clock on a given route and is thus in fact much larger.

95 It is settled law that whilst, in stating the reasons for the decisions which it takes to enforce the rules on competition, the Commission is not required to discuss all the issues of fact and law and the considerations which have led it to adopt its decision, it is none the less required under Article 190 of the Treaty to set out at least the facts and considerations having decisive importance in the context of the decision in order to make clear to the Court and the persons concerned the circumstances in which it has applied the Treaty (Case C-360/92 P Publishers Association v Commission [1995] ECR I-23, paragraph 39, Case T-290/94 Kaysersberg v Commission [1997] ECR II-2137, paragraph 150, and Joined Cases T-369/94 and T-85/95 DIR International Film and Others v Commission [1998] ECR II-357, paragraph 117). It is also clear from the case-law that, other than in exceptional circumstances, the statement of reasons must be contained in the decision itself, and it is not sufficient for it to be explained subsequently for the first time before the Court (Case T-61/89 Dansk Pelsdyravlerforening v Commission [1992] ECR II-1931, paragraph 131, Case T-230/94 Farrugia v Commission [1996] ECR II-195, paragraph 36, and Case T-16/91 RV Rendo and Others v Commission [1996] ECR II-1827, paragraph 45).

96 It follows from the abovementioned case-law that when a Commission decision applying Article 85(1) of the Treaty suffers from serious omissions, such as the absence of any reference to the market shares of the undertakings concerned, the Commission may not remedy that defect by adducing for the first time before the Court figures and other analytical data from which it may be concluded that the essential elements of a situation in which Article 85(1) applies are in fact present unless none of the parties had challenged the analytical data in question during the prior administrative procedure.

97 Here, according to the estimates put forward by the applicants in the notification, ENS's market shares were not expected to exceed 4%, and it was only on the basis of a narrower market definition that they might reach 7% for the business travel market and 8% for the leisure travel market (see point 2.1.2 of the summary of the notification), without even then having an appreciable effect on competition. It is thus clear that, as regards the effect of the ENS agreements on trade between Member States, the applicants and the Commission were starting from different premisses, the applicants considering that the agreements did not have an appreciable effect on intra-Community trade. The Commission was thus required to provide an adequate statement of its reasons for finding that the ENS agreements had an appreciable effect on trade between Member States.

98 Furthermore, even on the assumption that the Commission may adduce figures and other analytical data for the first time before the Court in order to show that its decision was well founded, the conclusions which it draws from the notification (see paragraph 94 above) are incorrect. According to Table 17 on page 26 of the notification, ENS's market shares for the business travel segment were to be under 5% on all the routes concerned:

- London-Amsterdam : 3% - London-Frankfurt/Dortmund : 3% - Paris-Glasgow/Swansea : 4% - Brussels-Glasgow/Plymouth : 1%.

99 Again according to Table 17 in the notification, ENS's market share in the leisure travel segment was expected to exceed 5% on only two of the four routes to be served by it, without on any route exceeding the 8% threshold put forward by the Commission:

- London-Amsterdam : 7% - London-Frankfurt/Dortmund : 6% - Paris-Glasgow/Swansea : 4% - Brussels-Glasgow/Plymouth : 4%.

100 It is further stated in the notification that ENS's market shares in the leisure travel segment were likely to remain fixed or even, in view of its limited possibilities for increasing capacity, to fall as the market as a whole grew. Whilst it is true, as has been pointed out above, that the Commission was not required to discuss all the issues of fact and law raised during the course of the administrative procedure prior to the adoption of the contested decision, this latter consideration put forward by the notifying parties was an essential part of their argument that the ENS agreements had an insignificant effect on trade between Member States. It is thus not possible to conclude, as the Commission maintains, that according to the notification ENS's market share on the leisure travel segment was 8%, or even that it exceeded 5%.

101 It must be noted here that whilst at points 2.1.2 of the summary of the notification and II.4.c.5.2(d) of the notification itself the parties stated, inter alia, that ENS's market share might reach 7% in the business travel segment and 8% in the leisure travel segment, they nevertheless made it clear that those shares would only apply in the context of a narrower definition of the market, based on `city to city flows' and excluding residual competition from cars and coaches. Moreover, those estimates put forward by the parties related to average shares of an overall geographical market and not to the four routes actually to be served by ENS and specifically regarded by the Commission as the different relevant geographical markets within which the ENS agreements fell to be assessed. Consequently, since the contested decision defined the relevant markets by reference not to `city to city flows' but to flows involving more than one destination (for example, from Paris to Glasgow and Swansea), since it did not exclude residual competition from cars and coaches from its definition of the market and since it did not assess the effects of the ENS agreements on the basis of an overall geographical market but on that of the four routes actually to be served by ENS, the Commission was not entitled to rely on the abovementioned market shares of 7% and 8%.

102 In any event, even if, as noted above, ENS's share of the tourist travel market was in fact likely to exceed 5% on certain routes, attaining 7% on the London-Amsterdam route and 6% on the London-Frankfurt/Dortmund route (see paragraph 94 above), it must be borne in mind that, according to the case-law, an agreement may fall outside the prohibition in Article 85(1) of the Treaty if it has only an insignificant effect on the market, taking into account the weak position which the parties concerned have on the product or service market in question (Case 5/69 Völk v Vervaecke [1969] ECR 295, paragraph 7). With regard to the quantitative effect on the market, the Commission has argued that, in accordance with its notice on agreements of minor importance, cited above, Article 85(1) applies to an agreement when the market share of the parties to the agreement amounts to 5%. However, the mere fact that that threshold may be reached and even exceeded does not make it possible to conclude with certainty that an agreement is caught by Article 85(1) of the Treaty. Point 3 of that notice itself states that `the quantitative definition of "appreciable" given by the Commission is, however, no absolute yardstick' and that `in individual cases ... agreements between undertakings which exceed these limits may ... have only a negligible effect on trade between Member States or on competition, and are therefore not caught by Article 85(1)' (see also Langnese-Iglo, cited above, paragraph 98). It is noteworthy, moreover, if only as an indication, that that analysis is corroborated by the Commission's 1997 notice on agreements of minor importance (OJ 1997 C 372, p. 13) replacing the notice of 3 September 1986, cited above, according to which even agreements which are not of minor importance can escape the prohibition on agreements on account of their exclusively favourable impact on competition.

103 That being so, where, as in the present case, horizontal agreements between undertakings reach or only very slightly exceed the 5% threshold regarded by the Commission itself as critical and such as to justify application of Article 85(1) of the Treaty, the Commission must provide an adequate statement of its reasons for considering such agreements to be caught by the prohibition in Article 85(1) of the Treaty. Its obligation to do so is all the more imperative here, where, as the applicants stated in their notification, ENS has to operate on markets largely dominated by other modes of transport, such as air transport, and where, on the assumption of an increase in demand on the relevant markets and having regard to the limited possibilities for ENS to increase its capacity, its market shares will either fall or remain stable. In addition, such a statement of reasons is necessary in the present instance in view of the fact that, as the Court of Justice held at paragraph 86 of its judgment in Musique Diffusion Française, cited above, an agreement is capable of exercising an appreciable influence on the pattern of trade between Member States even where the market shares of the undertakings concerned do not exceed 3%, provided that those market shares exceed those of most of their competitors.

104 There is, however, no such statement of reasons in the present case.

105 It must be concluded from the foregoing that the contested decision does not contain a sufficient statement of reasons to enable the Court to make a ruling on the shares held by ENS on the various relevant markets and, consequently, on whether the ENS agreements have an appreciable effect on trade between Member States, and the decision must therefore be annulled on that ground.

Second part: assessment of the restrictive effects of the ENS agreements on competition

Arguments of the parties

106 The applicants maintain that the ENS agreements do not restrict competition among the parent undertakings themselves, between the parent undertakings and ENS or vis-à-vis third parties, and that there is no strengthening of the alleged restrictions of competition as a result of the presence of networks of joint ventures on the market for rail transport. They further maintain that the beneficial effects of the ENS agreements outweigh any alleged restrictions to which they might give rise. The decision, they claim, therefore contains an inadequate statement of reasons or, at the very least, manifest errors of assessment.

107 In the first place, as regards restrictions of competition among the parent undertakings and between them and ENS, the applicants submit that, in the light of the substantial difficulties facing the railway undertakings and ENS, it cannot be asserted that any appreciable competition could emerge in the relevant markets among the railway undertakings in respect of the new services to be offered by ENS. ENS and EPS refer to a letter of 27 April 1992 sent by Lazard Brothers to BR (Annex 7 to the notification) showing that none of the railway undertakings alone would have accepted those risks, a point with which the Commission agreed in its decision. Moreover, the procurement of rolling stock involves various fixed costs such that an undertaking could only make a profit by increasing output to a minimum efficient size such as that hoped for by ENS. Individually, none of the railway undertakings would have been in a position to increase the level of services to that minimum.

108 UIC and NS add that there can be no restrictions of potential competition among the parties to the ENS agreements since, under Directive 91/440, none of the railway undertakings is in a position to serve any one of the routes concerned on its own but is bound to participate in an international grouping. The London-Amsterdam route, for instance, could not have been served by SNCF and EPS without the participation of NS. Since EPS and NS are `obligatory trading partners' in any international grouping serving that route, the additional participation of SNCF, which is not an actual or potential competitor of NS or EPS on the route concerned, could thus not constitute a restriction of competition. As to the fact that ENS serves a route one of whose destinations is Belgium without the Belgian railway undertaking SNCB being a party to the ENS agreements, the applicants stress that SNCB's supply of `necessary services' to ENS is the result of a purely commercial decision and not of any obligation imposed by Community law.

109 Since the four routes served by ENS are to be considered as forming four different geographical markets (decision, point 29), it also follows that the four connections must be held not to compete with each other, so that combining their operation in one grouping does not constitute a restriction of competition.

110 The Commission's argument that the ENS agreements restrict competition between the parties to the agreements and new railway undertakings, including subsidiaries of existing ones, is unfounded. To the extent that it concerns new undertakings, it is irrelevant for the purpose of analysing possible restrictions of competition among the participating undertakings. The assertion that the parent undertakings could set up, in countries served by ENS other than their own countries of establishment, subsidiaries which could acquire the status of `railway undertakings' within the meaning of Directive 91/440 and with which each of the railway undertakings concerned could organise night services by means of a grouping excluding any other participant in ENS, is hypothetical. None of the railway undertakings participating in ENS has subsidiaries of such a kind; nor, moreover, are they able to set up subsidiaries having the status of railway undertakings in Member States where other railway undertakings are established, at least until the two draft directives complementing the regulatory framework of Directive 91/440 have been implemented. Even if such a framework already existed, moreover, it would be totally unrealistic from a business point of view to assume, for instance, that DB would set up its own railway undertaking in the Netherlands in order to operate, together with EPS, a night train connection between the United Kingdom and Amsterdam without the involvement of NS. In any event, the Commission's findings are all the more challengeable in that cooperation in ENS is not exclusive, there being nothing in the ENS agreements to prevent participants from engaging in a grouping competing with ENS.

111 SNCF adds that, contrary to the Commission's contention, the individual railway undertakings do not have the possibility of setting up a subsidiary in another Member State with a view to forming a grouping with it, because there are statutory monopolies in the Member States and the Council has not adopted any legislation conferring such a right of establishment. Moreover, the fact that a number of railway undertakings participate in the ENS agreements is of no consequence, since they operate on different networks and are thus not in competition on each of the other geographical markets considered. Finally, SNCF stresses that the financial risks involved in setting up ENS cannot be borne by a single undertaking, as the Commission accepts at point 63 of its decision.

112 Similarly, the Commission's argument that each railway undertaking could perform the role of railway `transport operator' outside its country of establishment by buying the necessary services from the railways concerned is based on an unrealistic description of the market and is incompatible with the regulatory framework of Directive 91/440. There is no justification for supposing, for example, that DB would be interested in setting up a special structure and negotiating rights of access with the United Kingdom infrastructure manager, SNCF and NS in order to set up a night train connection between London and Amsterdam. Such behaviour would, in any event, be commercially unfeasible, since none of the participants in ENS has the financial and commercial means to do so.

113 The Commission's reasoning is also based on a market model which is incompatible with the regulatory framework of Directive 91/440. By drawing an artificial distinction between railway undertakings and a hypothetical new category of market participants called `transport operators', it creates access and transit rights which do not derive from the directive. The conclusion from its analysis, moreover, is that the formation of any international grouping automatically restricts competition simply because its participants could also have formed another grouping. Such reasoning is all the more unacceptable in that it makes it impossible for the participating railway undertakings to assess how the services of ENS should be structured once the exemption granted has expired, thus discouraging further initiatives for innovative international transport services by the railway undertakings in the Community.

114 In the second place, as regards the alleged restrictions on access by third parties (points 46 to 48 of the decision), the applicants maintain that the Commission's analysis is wrong in both fact and law. First, the possibility that third parties might be excluded should be assessed in relation to the relevant intermodal markets on which the joint venture will be operating and for which, according to points 26 and 27 of the decision, there are other, interchangeable, modes of transport. The analysis in question, however, is based on another market definition, that of the market in necessary rail services, which diverges from the definition explicitly adopted in the decision.

115 Second, the Commission's assessment is based on the false premiss that ENS should be treated as a `transport operator' to which the parent undertakings provide rail services. However, ENS is not a transport operator but an international grouping of railway undertakings within the meaning of Directive 91/440, formed in order to enable the parent undertakings to provide international passenger rail services, in accordance with Article 10(1) of the directive. The fact that the parent undertakings opted for a grouping in the form of a company is irrelevant in that connection with regard to the legal status of ENS. Thus, contrary to the Commission's contention, since the parent undertakings themselves provide transport services to travellers via the grouping in question, there cannot be an upstream market for the provision of rail services to operators and a separate market on which ENS operates, as stated in the decision. In any event, the Commission's findings are based on the false assumption that any `transport operator' of any kind (for example, a hotel chain) is entitled to claim the supply of locomotives.

116 Third, the Commission's argument is based on the erroneous assumption that EPS is a wholly-owned subsidiary of BR and/or the railway infrastructure manager Railtrack and holds a dominant position in the United Kingdom, whereas in fact EPS has been transferred by BR to the United Kingdom Government (see paragraph 11 above) and its position is far from dominant in any market. EPS reminded the Commission in a letter of 30 June 1994 (Annex 9 to its application) that it is not an infrastructure owner or manager and has access only to the reserved paths it needs over the UK network, forming a small minority of the paths on the routes in question. Similarly, EPS employs a small number of railway staff and owns a small fleet of locomotives. It does not, therefore, enjoy a dominant position as regards access to infrastructure in the United Kingdom.

117 Fourth, the Commission has not explained why the alleged commercial strength of the participating railway undertakings constitutes as such a barrier to market access for third parties. The argument based on the existence of actual or potential competitors and the competitive damage on the downstream markets brought about by the alleged special relationship between the railway undertakings and ENS is speculative. Even if the railway undertakings were alone in possessing locomotives and even if each of them refused to supply locomotives to a new operator, the effect on the properly-defined relevant markets would be minimal. In any event, under Directive 91/440, the participating railway undertakings are obliged, as infrastructure managers, to provide certain services to third parties. Moreover, the acquisition of (in particular second-hand) locomotives by operational or financial leases or otherwise does not constitute a major investment for third parties, and there is no evidence for the Commission's claim that only the railway undertakings concerned possess them or that any new entrant would experience difficulty in finding them. It is, moreover, possible to adapt existing locomotives to operate through the Channel Tunnel, rather than ordering new or special locomotives. In any event, the mere fact that the setting-up of a joint venture necessitates certain major capital investments cannot be regarded as a barrier to market entry. As to the Commission's reference in its pleadings to the foreclosure effect arising out of the Channel Tunnel usage agreement, the applicants reply that it is an agreement which has been granted exemption by the Commission under Article 85(3) of the Treaty and stress that the paths to be used by ENS will be allocated to the quota reserved by the Eurotunnel Agreement for SNCF and BR and will not reduce the number of paths available for third parties.

118 In the third place, as regards the restrictive effect due to the presence of a network of joint ventures, the applicants point out that the other joint ventures concerned are located on product or service markets - the market for combined transport of goods and the market for the transport of vehicles by rail - different from those on which ENS will be active and that they do not engage in competing or even complementary activities. The decision contains no analysis to show how the alleged existence of a network of joint ventures for rail transport could have an appreciable effect on competition in the market for passenger transport and is, moreover, inconsistent with the principles set out by the Commission in its 1993 communication.

119 Finally, as regards the overall assessment of the ENS agreements, ENS and EPS state that the Court of Justice has consistently held (Case 56/65 Société Technique Minière v Maschinenbau Ulm [1966] ECR 235, Joined Cases 56/64 and 58/64 Consten and Grundig v Commission [1966] ECR 299, Case 26/76 Metro v Commission, cited above, Case 258/78 Nungesser v Commission [1982] ECR 2015, Case 161/84 Pronuptia [1986] ECR 353 and Case C-234/89 Delimitis v Henninger Bräu [1991] ECR I-935) that the pro-competitive effects of an agreement must be weighed up against its anti-competitive effects. If the pro-competitive effects outweigh the anti-competitive effects and the latter are necessary in order to implement the agreement, then the agreement cannot be regarded as having as its object or effect the prevention, restriction or distortion of competition within the common market within the meaning of Article 85(1) of the Treaty.

120 The applicants submit that the agreements in issue have substantial pro-competitive effects on both the relevant service markets as defined in points 26 and 27 of the decision. In particular, the market for the transport of business travellers on the routes served by ENS is dominated by a small number of airline companies which, according to the International Passenger Survey conducted by the Office of Population Censuses and Surveys, held 74% of that market in 1991. ENS further showed, in its notification, that it was likely to have 7% of that market while the airline companies would hold 78% and that its formation would thus to some extent mitigate the domination of the market by air transport. The Commission has, moreover, accepted that the position was the same with respect to the leisure market. In fact, the pro-competitive effects of the agreements should outweigh any speculative anti-competitive effect.

121 The Commission considers that the fact that the participants in ENS have assumed significant commercial risks and incurred high expenses and costs does not mean that appreciable competition among the railway undertakings concerned on the relevant market is improbable. A railway undertaking established in one Member State is entitled to form an international grouping with another railway undertaking established in another Member State and obtain from Eurotunnel, the infrastructure manager, the paths necessary to pass through the Channel Tunnel and thus operate international transport services (decision, point 42). Moreover, any railway undertaking party to the ENS agreement is entitled to take on the role of `transport operator' itself and to set up a subsidiary which, by buying the necessary services from the railway undertakings concerned, may likewise provide international transport services (decision, points 43 and 44). Thus, by entrusting the operation and marketing of those services to their joint venture ENS, the applicants have appreciably limited the scope for competition on that market (decision, point 45). Finally, it is clear from the decision of the German railway undertaking DB to form a joint venture with the Swiss and Austrian railways with a view to providing night services between German, Swiss and Austrian cities that the possibilities for a railway undertaking party to the ENS agreements to set up a subsidiary in the United Kingdom and/or other Member States in order to offer night train services are neither illusory nor unrealistic.

122 As regards the argument that each of the applicants is an obligatory trading partner for operation of the routes served by ENS, the Commission replies that ENS is not a railway undertaking within the meaning of the directive but a `transport operator' which obtains the necessary rail services from railway undertakings. Furthermore, the fact that the Brussels-Glasgow/Plymouth route was to be offered by ENS even though SNCB is not a party to the agreement demonstrates that the participation of all four railway undertakings established in the Member States concerned is not a sine qua non for the operation of the services involved.

123 In response to the applicants' argument that the railway undertakings concerned could not set up subsidiaries having the status of railway undertakings in the different Member States and thus form other international groupings in competition with ENS, the Commission contends that there is no legal obstacle to prevent railway undertakings from exercising their right of establishment in other Member States. The principle of freedom of establishment enunciated by Article 52 of the Treaty became fully effective at the end of the transitional period; the fact that when the contested decision was adopted the Council had not yet adopted the draft directive on the licensing of railway undertakings is thus irrelevant, the aim of such a directive being only to facilitate the exercise of the right of establishment, and not to create that right (Case 2/74 Reyners v Belgian State [1974] ECR 631).

124 With regard to the applicants' argument that the regulatory framework set up by Directive 91/440 does not allow the railway undertakings to set up a subsidiary in the form of a transport operator, the Commission stresses that, whilst Directive 91/440 applies admittedly only to railway undertakings whose main business is to provide rail transport services for goods and/or passengers, with a requirement that the undertaking should ensure traction (Article 3), transport operators which do not themselves qualify as railway undertakings within the meaning of Article 3 of the directive and thus do not have a right of access to railway infrastructure may none the less offer services and/or railway transport of goods by obtaining traction services and access to railway infrastructure from railway undertakings. That is precisely how ACI and ENS operate, as regards combined transport and passenger transport respectively.

125 The Commission points out that it had already put forward that point of view in the letters it sent to the notifying parties on 29 October 1993 (defence, Annex 4) and 28 February 1994 and adds that, after the railway undertakings participating in ENS had been consulted, ENS's chairman sent a letter dated 13 April 1994 to the Commission (defence, Annex 6), confirming their agreement to provide overnight services to ENS's competitors on the same routes.

126 As regards the assertion that the ENS agreements contain no provision as to exclusivity and thus do not preclude the railway undertakings concerned from setting up different international groupings capable of competing with ENS, the Commission stresses that such a possibility is extremely unlikely since, during the administrative procedure, the railway undertakings concerned insisted on the need to combine their experience and financial resources in order to ensure the commercial success of ENS.

127 The Commission also denies the claim that it failed to make a proper assessment of the restrictive effects of the ENS agreement on third parties, and refers in that regard to points 46 and 48 of the contested decision. It considers that, whilst the formation of ENS creates no restrictions on entry by third parties to the other modes of transport which are interchangeable with the services offered by ENS, access by railway undertakings and transport operators to the rail transport segment of the relevant market could none the less be impeded because ENS is composed of powerful railway undertakings with control of both the utilisation of railway infrastructure and the provision of traction. In the Commission's view, it is not necessary that barriers to access affect each segment of a composite market of the kind in question here. The fact that a decision was taken exempting the Eurotunnel Agreement entered into by BR, SNCF and Eurotunnel under Article 85(3) of the Treaty, it adds, in no way renders irrelevant the assessment of the economic position of EPS and SNCF, which hold 75% of the path capacity reserved for international train services in the Channel Tunnel.

128 With regard to the restrictions of competition arising out of the supply of necessary rail services to ENS, the Commission recognises that, as regards train paths, international groupings are entitled under the directive to obtain access to infrastructure directly from the infrastructure managers. That does not apply, however, to transport operators as regards the provision of train paths or of traction and skilled crews. In view of the fact that traction may only be assured by railway undertakings, which possess both the special locomotives designed for traction in the Channel Tunnel and the