EN Official Journal of the European Union C 38/5

Action brought on 26 November 2010 — European Commission v Federal Republic of Germany

(Case C-556/10)

2011/C 38/07

Language of the case: German

Parties

Applicant: European Commission (represented by G. Braun and H. Støvlbæk, acting as Agents)

Defendant: Federal Republic of Germany

Form of order sought

— declare that, in transposing the first railway package, the Federal Republic of Germany has failed to fulfil its obligations under — Article 6(3) of and Annex II to Directive 91/440/EEC (1) and Articles 4(2) and 14(2) of Directive 2001/14/EC, (2) — Article 6(2) of Directive 2001/14/EC, — Articles 7(3) and 8(1) of Directive 2001/14/EC, and — Article 30(4) of Directive 2001/14/EC in conjunction with Article 10(7) of Directive 91/440/EEC;

— order the Federal Republic of Germany to pay the costs.

Pleas in law and main arguments

Directives 91/440/EEC and 2001/14/EC aim at equitable and non-discriminatory access to rail infrastructure for all undertakings and promotion of a competition-oriented, dynamic and transparent railway market in Europe. Article 6(3) of Directive 91/440/EEC prescribes that the exercise of ‘essential functions’ of infrastructure managers is to be entrusted to bodies or firms ‘that do not themselves provide any rail transport services’.

In the Commission’s view, the independence of the infrastructure manager in the exercise of essential functions, prescribed by the directive, is not guaranteed in Germany, since several of those ‘essential functions’ have been entrusted to a company which is legally independent but is a subsidiary of a holding company to which belong inter alia undertakings providing rail transport services.

The independence laid down in Directive 2001/14/EC must be expressed in terms not only of legal form but also of organisation and decision-making. It follows that an undertaking entrusted with essential functions can be organised within the same holding company as undertakings providing rail transport services only if it not only is legally separate but also can be shown not to form part of an economic unit with them, in other words is also economically independent of them. If, then, within a holding company structure, ‘essential functions’ are performed by a subsidiary company, precautionary measures must be taken to ensure that the parent and the subsidiary cannot act in economic unity, as one undertaking. Those appropriate and adequate precautionary measures, which could also guarantee the economic independence of the infrastructure manager from the rail transport undertakings, have not, however, been adopted in Germany. The precautionary measures cited by Germany are not sufficient to guarantee the independence of the essential functions, avert conflicts of interest, and withdraw control of the body entrusted with essential functions from the holding company.

First, fulfilment of the requirements of independence is not supervised by an independent authority, and competitors have no redress in the event of breaches of the independence rule. Secondly, the independence from the holding company of persons such as directors and managers of the body entrusted with the essential functions is not guaranteed, for the following reasons:

— Directors of the holding company or of other companies belonging to the holding company are not prevented from also being on the board of the body entrusted with essential functions.

— There is no provision that members of the management of the body entrusted with essential functions and its leading personnel responsible for carrying out the essential functions, after ceasing their activity for the body in question, may not for an appropriate number of years hold a leading position in the holding company or in other institutions controlled by the holding company.

— The managers of the body entrusted with essential functions are not appointed under clearly defined conditions and subject to corresponding legal obligations to ensure complete independence of decision-making.

— The body entrusted with essential functions does not have personnel of its own accommodated in separate or access-controlled premises, whose contacts with the holding company and other undertakings controlled by it are to be limited to the official notices associated with the exercise of essential functions.

— Access to the information systems is not protected, so that it cannot be excluded that the holding company may come to possess information relating to the exercise of essential functions.

In addition to the above breach of the requirement of independence of the infrastructure manager in the exercise of essential functions, the Federal Republic of Germany has also failed to fulfil its obligations under Directives 91/440 and 2001/14 by:

— not transposing sufficiently clearly the provisions of Directive 2001/14/EC on infrastructure charges and failing to establish the conditions for the proper application of the full-cost principle;

— not adopting the necessary measures to require infrastructure managers to reduce infrastructure costs and the infrastructure charges for access to the rail network;

— failing to empower the regulatory authority to enforce a request to the infrastructure manager for information by means of appropriate sanctions.

(1) Council Directive 91/440/EEC of 29 July 1991 on the development of the Community’s railways, OJ 1991 L 237, p. 25.

(2) Directive 2001/14/EC of the European Parliament and of the Council of 26 February 2001 on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification, OJ 2001 L 75, p. 29.