2004/33/EC: Commission Decision of 27 August 2003 relating to a proceeding pursuant to Article 82 of the EC Treaty of (COMP/37.685 GVG/FS) (notifed under document number C(2003) 3057)
Date: 2003-08-27
Institutions: European Commission
Subjects: competition law, complaint to the Commission, infringement of EU law, rail transport, transport company

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Official Journal of the European Union

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COMMISSION DECISION

of 27 August 2003

relating to a proceeding pursuant to Article 82 of the EC Treaty of (COMP/37.685 GVG/FS)

(notifed under document number C(2003) 3057)

(Only the Italian text is authentic)

(2004/33/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the final report of the hearing officer in this
case (5),

Having regard to the Treaty establishing the European
Community,

Whereas:

Having regard to Council Regulation No 17 of 6 February
1962, first Regulation implementing Articles 85 and 86 of the
Treaty (1),
(EC)
amended
No 1216/1999 (2), and in particular Articles 3 and 15(2)
thereof,

Regulation

last

by

as

A. INTRODUCTION

Having regard to Council Regulation (EEC) No 1017/68 of 19
July 1968 applying rules of competition to transport by rail,
road and inland waterway (3),

Having regard to the complaint lodged on 25 October 1999
by the limited company Georg Verkehrsorganisation GmbH,
acting under Article 10 of Regulation (EEC) No 1017/68,
alleging that Article 82 of the EC Treaty had been infringed,

(1)

This case was initiated by a complaint from the German
railway undertaking Georg Verkehrsorganisation GmbH
‘GVG') against Ferrovie dello Stato SpA
(hereinafter
(hereinafter ‘FS'),
the Italian national railway carrier.
GVG complained that since 1995 FS had been refusing
to provide access to the Italian infrastructure, to enter
into negotiations for the formation of an international
grouping and to provide traction. This prevented GVG
from providing an international rail passenger service
from various points in Germany via Basle to Milan.

Having regard to the Commission decision of 21 June 2001 to
initiate proceedings in this case,

(2)

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission pursuant to Article 19(1) of Regulation No 17
and Article 26 of Regulation (EEC) No 1017/68, read in
conjunction with Commission Regulation (EC) No 2842/98 of
22 December 1998 on the hearings of parties in certain
proceedings under Articles 85 and 86 of the EC Treaty (4),

Having consulted the Advisory Committee on Restrictive
Practices and Dominant Positions and the Advisory Committee
on Restrictive Practices and Monopolies in the Transport
Industry,

(1) OJ 13, 21.2.1962, p. 204/62. Although the Regulation was repealed
by Council Regulation (EC) No 1/2003 of 16 December 2002 (OJ
it continues to apply to decisions adopted
L 1, 4.1.2003, p. 1),
prior to 1 May 2004.
(2) OJ L 148, 15.6.1999, p. 5.
(3) OJ L 175, 23.7.1968, p. 1. The Regulation was last amended by
Regulation (EC) No 1/2003, which applies, however, only from 1
May 2004.

(4) OJ L 354, 30.12.1998, p. 18.

The Commission has come to the conclusion that by
denying GVG access to the services in question, which
its business, FS has
are necessary for carrying out
abused its dominant position within the meaning of
Article 82 of the EC Treaty and Article 8 of Regulation
(EEC) No 1017/68. Following the initiation of
the
Commission's investigation, FS has given undertakings
to the Commission that the abuse will be terminated
and will not be repeated.

B. THE PARTIES

(3)

GVG is a German railway undertaking which has been
operating international rail passenger services on the
basis of a national authorisation since March 1992. On
31 March 1995 it obtained from the Transport Ministry
of the Land of Hessen a licence compatible with Council
Directive 95/18/EC of 19 June 1995 on the licensing of
railway undertakings (6)
rail

to operate passenger

(5) OJ C 12, 16.1.2004.
(6) OJ L 143, 27.6.1995, p. 70.

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In

services.

2000 GVG formed

an
transport
international grouping with the Swedish State railways
providing services between Malmö and Prague and
In 2001 it operated more than
Malmö and Berlin.
200 trains per year
in the international passenger
long-distance market from Germany to other European
countries (Austria, France, Sweden, and eastern Europe).

(4)

(5)

(6)

(7)

the major

Italian railway operator

FS is
and a
State-owned enterprise. During the 1990s, FS went
through a restructuring process. On 22 December 1992,
the company was established as the public limited
company ‘Ferrovie dello Stato — Società di Trasporti e
Servizi per Azioni' (FS SpA) under the supervision of
the Ministry of the Treasury. On 4 March 1996, FS
the network,
established separate business units for
rolling
and other
activities. On 27 July 1998, these business units were
transformed
the
infrastructure division (FS Infrastruttura), the division for
passenger transport (FS Passeggeri) and the division for
freight transport (FS Cargo).

stock and traction, passengers

free-standing

divisions:

into

(9)

On 13 July 2001, FS accomplished a restructuring
process creating FS Holding SpA FS Holding controls
two companies:

Rete Ferroviaria Italiana SpA (RFI), which operates the
network infrastructure on the basis of a 60-year
management contract granted by the Transport Minister
on 31 October 2000 (Decree No 138T); and

Trenitalia SpA (Trenitalia), which carries on transport
business on the basis of a licence to provide rail services
granted by the Transport Minister on 23 May 2000 in
accordance with Presidential Decrees No 277 of 8 July
1998 and No 146 of 16 March 1999.

that would operate twice a day from Basle to Milan via
Domodossola. Some of these passengers would continue
their journey from Milan. Similarly, the train from Milan
to Basle would take local passengers as well as beyond
passengers (fed into Milan by existing FS trains). GVG
wishes to cater in particular for business customers by
offering a Basle-Milan connection which is up to one
hour faster than existing links. Unlike GVG's non-stop
service, the former operate with up to 14 stops between
Basle
and Milan. GVG also envisages providing
additional services on the train.

a

of

such

attractiveness

service
schedule. Arrival

depends
The
considerably on the
and
time
departure times in Basle have to be well connected with
Deutsche Bahn AG (hereinafter ‘DB')
Intercity trains
which would provide feeder services for beyond traffic.
Similar interconnection has to be ensured for beyond
traffic in Milan. Moreover, the trains should depart with
a sufficient time difference. The train paths envisaged by
GVG would allow its trains to depart with a time
difference of about two hours. In addition, in order to
ensure the shortest possible travelling time, there has to
be a good connection at Domodossola. The train paths
requested by GVG in 1998 can be taken by way of
illustration (7). They would allow for the services as set
out in the table below and a seven/eight-minute stop in
Basle Bad to catch the Intercity to/from Germany (8):

Basel
Bad

Domodossola

Milan

Travelling time

Departure

Arrival

Departure

Arrival

12.45

15.50

15.58

17.08

4.23

14.45

17.50

17.58

19.08

4.23

C. THE SERVICE CONCERNED BY THE DECISION

Milan

Domodossola

Basel
Bad

1. AN INTERNATIONAL RAIL PASSENGER TRANSPORT
SERVICE BETWEEN GERMANY AND MILAN

09.50

11.01

11.09

14.13

4.23

07.50

09.01

09.09

12.13

4.23

(8)

GVG wants to provide an international passenger service
from Germany to Milan and back. Its intention is to
in
cities
feed passengers originating
into
i.e. Karlsruhe, Koblenz and Mannheim,
Germany,
link
Basle. It then proposes a non-stop (‘Sprinter') rail

in different

(7) Schedules have been adapted several times according to the train

paths offered by Schweizer Bundesbahn.

(8) The Intercity from Germany arrives at 12.38 and 14.38 in Basle.
Northbound, the Intercity leaves Basle at 12.21 and 14.21. In order
to change trains in Basle, passengers would have seven or eight
minutes respectively.

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(10)

railway undertaking Schweizer
FS and the Swiss
Bundesbahn (hereinafter ‘SBB') provide a cooperative rail
passenger transport service from Basle to Milan. They
operate seven trains daily via Chiasso (9) and three
trains a day via Domodossola (10). Apart from that, the
in which FS holds
Italian-Swiss undertaking Cisalpino,
50 % (the other half being shared between SBB and the
Swiss BLS Lötschbergbahn (hereinafter ‘BLS')) operates
one daily service via Domodossola (11). These services
are not provided on the basis of a public service
obligation or under a public service contract (12).

development of

the Community's
1991 on the
railways (13) as an association of at least two railway
undertakings established in different Member States for
the purpose of providing international transport services
between Member States. According to Article 10(1) of
Directive 91/440/EEC, international groupings must be
granted access and transit rights in the Member States
of
their constituent railway undertakings as well as
transit rights in other Member States. As shown in
recital 128, it is the Commission's view that Article 10(1)
of Directive 91/440/EEC has direct effect.

2. REQUIREMENTS FOR THE SERVICE

2.1. LICENCE

(13) Directive 91/440/EEC was implemented in Italy only
after a five-year delay by Decree No 277/1998, which
entered into force on 8 July 1998. However, even before
the transposition of Directive 91/440/EEC, there was no
legal obstacle under Italian law for FS to enter into an
international grouping with a railway undertaking of
another EU Member State for the purpose of providing
international rail services (14).

(11)

railway undertaking first needs

In order to provide a cross-border rail transport service,
a
licence. The
conditions for granting licences to railway undertakings
in the European Union have been harmonised by
Directive 95/18/EC, which was transposed in Italy by
Decree No 146/1999 with a two-year delay on 23 July
1999.

a

2.3. ACCESS TO INFRASTRUCTURE

2.2. INTERNATIONAL GROUPING

(14)

(12) At the present stage in EU rail liberalisation, the only
way a railway undertaking from one Member State can
obtain access to the rail passenger transport market of
another Member State for the provision of international
passenger
transport services is by entering into an
‘international grouping'. An international grouping is
defined by Council Directive 91/440/EEC of 29 July

(9) In 1998, the travelling time of these connections was five hours, 40
minutes. Today it is five hours, 21 minutes. These trains arrive in
the ‘Basle Bad' railway station.

(10) The trains via Domodossola arrive in the Basle ‘SBB' railway
station. Passengers who wish to travel to Germany have to transfer
to the ‘Basle Bad' railway station,
from where trains leave to
Germany. The travelling time for one of these trains is five hours,
two minutes while the others take five hours, 21 minutes.
In
addition, there is the transfer time of about 30 minutes to Basle
Bad.

(11) The Cisalpino arrives in the Basle ‘SBB' station. The travelling time
of the Cisalpino is four hours, 31 minutes. In addition, there is the
transfer time of about 30 minutes to Basle Bad. For a comparison
of travelling time between the Cisalpino and GVG's planned train,
see section F(3).

(12) As referred to in Article 2 of Council Regulation (EEC) No
1191/69 of 26 June 1969 on action by Member States concerning
the obligations inherent
in the concept of public service in
transport by rail, road and inland waterway (OJ L 156, 28.6.1969,
p. 1), as last amended by Regulation (EEC) No 1893/91 (OJ L 169,
29.6.1991, p. 1).

the

the

cross-border

service. Access

The railway undertaking also needs to be provided with
infrastructure capacity,
i.e. a certain time slot on the
tracks of the railway networks on which it wishes to
to the
provide
infrastructure includes a number of different services
and actions that take place at different points in time. In
particular
important:
information regarding the availability of train paths and
related prices; the handling of requests for capacity; the
permission to use track capacity; train control, including
signalling, regulation and the provision of information
on train movement; access to refuelling facilities; access
to passenger stations; access to marshalling yards; access
to storage sidings; and access to maintenance and other
technical facilities (15).

following

elements

are

(15)

Some of these services need to be made available to a
railway undertaking before it takes a formal decision to

(13) OJ L 237, 24.8.1991, p. 25. Directive as last amended by Directive
2001/12/EC (OJ L 75, 15.3.2001, p. 1), which had to be
implemented by 15 March 2003.

(14) For

instance,

in November 1996 FS set up an international

grouping with Swedish State railways SJ.

(15) A list of such services is also provided in Annex II to 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 L 75, 15.3.2001, p. 29).

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technical

start a service. This holds in particular for the provision
of all relevant
information concerning the
allocation of train paths, the reservation of a particular
train path and information concerning infrastructure
tariffs. Only on the basis of such information and the
reservation of the necessary train path can the potential
entrant establish a business plan. Based on the latter, the
potential entrant takes its entry decision, which, if it is
positive,
then leads to a start of negotiations with
potential partners.

some other

infrastructure services,

By contrast,
for
to refuelling facilities or passenger
instance access
stations, may only become necessary after negotiations
with partners are finalised and the operation of
the
planned service begins.

Council Directive 95/19/EC of 19 June 1995 on the
allocation of railway infrastructure capacity and the
charging of infrastructure fees (16) defines the principles
and procedures to be applied in that regard.
It was
transposed in Italy by Decree No 146/1999 with a
two-year delay on 23 July 1999. According to Article 3
the Directive, Member States must designate an
of
allocation body which has
railway
infrastructure
capacity is allocated on a fair and
non-discriminatory basis. It also has to ensure that the
allocation procedure
the
allows
infrastructure.

effective use of

to ensure that

(16)

(17)

(18) Article 3 of Decree No 146/1999 provides that the use
of
the railway infrastructure, already regulated by
Presidential Decree No 277/1998, is to be granted on
condition that each railway undertaking proves that it
possesses a licence and a safety certificate and that it has
technical and
concluded the necessary administrative,
financial agreements with regard to the allocation of
capacity. The infrastructure manager
is to issue the
safety certificate.

(19)

Pursuant to Decree No 277/1998, FS (RFI) has been
assigned the task of the infrastructure manager and the
role of the allocation body. According to Article 4 of
Decree No 277/1998,
is
responsible for monitoring the circulation of rolling
stock
railway
infrastructure.

the infrastructure manager

the maintenance of

and

the

for

(20)

Before the entry into force of Decree No 277/98, FS had
an exclusive concession to operate the Italian railway

(16) OJ L 143, 27.6.1995, p. 75. Directive 95/19/EC was repealed, with
effect from 14 March 2001, by Directive 2001/14/EC, which had
to be implemented by 15 March 2003.

infrastructure and to provide rail transport services on
the basis of Article 1 read in conjunction with Article 2
of Decree No 225-T of 26 November 1993 (17). On that
basis, in cooperation with the Ministry of Transport, FS
was itself responsible for defining the conditions of
access to the railway infrastructure (18).

(21) Already before Directives 95/18/EC and 95/19/EC were
transposed in Italian law, as the infrastructure manager,
FS was entitled on the basis of Article 8 of Decree
No 277/98 to grant access to the network, either
directly or through an international grouping, and to
issue safety certificates to other railway companies.

2.4. ACCESS TO INTERNATIONAL TRAIN PATHS

(22)

The provision of
transport services
international rail
requires the coordination of train paths on the national
railway networks. Such coordination is carried out by
European railway companies in the working groups of
Forum Train Europe (hereinafter ‘FTE'). During such
meetings, railway companies discuss the time schedules
of services to ensure that rolling stock and infrastructure
capacity are available. Three meetings a year are
organised on a regular basis (19). Railway companies
wishing to provide international services make requests
for train paths to the respective allocation bodies. Train
paths are reserved on a temporary basis. If they are not
taken up within a certain period of time the reservation
is cancelled and a new request has to be made during
the following FTE meeting. Before the train path can
actually be used for a particular service, the allocation
body has to verify whether the necessary technical and
safety requirements for the rolling stock are fulfilled.

(23) Until 1998, only national railway undertakings were
permitted to participate in the FTE meetings. As a
result, as a private railway undertaking GVG was
prevented from participating directly
slot
allocation process for international train paths. It could

in the

(17) Italian Official Gazette No 283, 2.12.1993. In addition, according
to Legislative Decree No 422/1997, regional and local governments
have the right to licence local and regional railway companies
operating their own networks.

(18) Article 16 of Decree No 225-T of 26 November 1993 (Italian

Official Gazette No 283, 2.12.1993).

(19) During the FTE A at

the year,

the beginning of

railway
undertakings communicate the needed rail paths and slots. After
this meeting, railway undertakings develop draft plans and studies
to find possible solutions to the various requests. During the FTE
B, which usually takes place in May, requests are made and
schedules are fixed. The last meeting, called FTE C, takes usually
place in December. During this meeting infrastructure managers
harmonise their various schedules.

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only become a member of FTE on 1 April 1998. Until
then it had to make its requests for train paths in other
EU Member States through the German national railway
undertaking, DB.

international services by itself, a railway undertaking
would have to set up separate locomotive and driver
pools in every Member State where it wishes to operate.

2.5. SAFETY CERTIFICATE

D. BACKGROUND

(24)

In order

concerned.

to obtain the

to Article 11 of Directive 95/19/EC,

Pursuant
the
railway undertakings in the international grouping must
have a safety certificate to ensure safe service on the
routes
safety
certificate, the undertaking must comply with relevant
In Italy, according to
regulations under national
Article 5 of Decree No 277/98 (20),
the Ministry of
Transport
and
standards
relevant
regulations on the basis of a proposal made by the
infrastructure manager. As the infrastructure manager,
to railway
certificate
safety
the
FS
undertakings and international groupings.

determines

grants

(RFI)

law.

the

(27) Nothing in Italian legislation before or

since

the
the relevant Community legislation
transposition of
to the railway
prevented FS from granting access
from setting up an international
infrastructure or
grouping with or providing traction services
to a
railway undertaking established in another Member
State. On the contrary, several provisions of Italian law
imply that FS should be proactive in the provision of
access to the infrastructure. For instance, according to
Article 5 of Decree No 277/98, as the infrastructure
manager,
transport
undertakings access to the network with a view to using
its capacity to the maximum.

offer

(RFI)

has

rail

FS

to

2.6. TRACTION

(25)

In order to be able to provide a rail transport service, a
railway undertaking needs to have traction — i.e. a
locomotive and a driver — to move the train on the
network (21).

(28) On 17 January 1992, GVG wrote to FS to request
information on the costs of access to the Italian rail
network for
the purpose of providing a passenger
transport service, infrastructure access costs and traction
costs. The Commission has no confirmation of any
reply from FS to this letter. Since 1995, GVG submitted
bids to FS for a train path (22) between Domodossola
and Milan and related information as well as for the
formation of an international grouping via DB in the
FTE (23). Similarly, GVG requested SBB to offer train
paths between Basle and Domodossola.

(26) At

this stage in the process of

liberalising the rail
transport sector in the EU,
there are a number of
technical, legal and economic barriers to the provision
of traction for international rail transport services. For a
century and a half, European railways have developed
within national boundaries. Each national railway has
adopted its own technical and administrative standards
according to national requirements. As a result, there
are 15 different national signalling systems and five
different systems for electricity supply (voltage). National
systems differ in their operating procedures,
length of
passing tracks, safety systems, driver training and route
knowledge. The fact that different technical standards
continue to exist has prevented interoperability in the
European market for rail services. Therefore, unless they
are equipped with multiple technology,
locomotives
have to be changed at borders. Similar barriers also exist
for drivers, who need route knowledge, a national
licence and language skills. To provide traction for

(20) As amended by Article 7 of Decree No 146/1999.
(21) See judgment of the Court of First Instance in Case T-229/94

Deutsche Bahn AG v Commission [1997] ECR II-1689.

(29) As of June 1996, SBB offered GVG the requested train
paths on Swiss territory. By way of comparison, on 28
January 1997, DB informed GVG in writing that ‘in spite
of concerted attempts made by SBB' no response could
be obtained from FS (24). DB Geschaeftsbereich Netz
(DB Netz) has confirmed that between 1995 and 1997
its staff had discussions with FS and SBB during three
project (25). DB
FTE
furthermore confirms that during the discussions it had
with FS between 1995 and 1997,
it had informed FS
that GVG intended to carry out this train service on the

concerning GVG's

sessions

(22) FTE minutes distinguish between an offer of a train path
(‘réception annonce de sillons') and a request for a train path
(‘commande de sillon'). The purpose of the former is to inform the
infrastructure manager about the interest in providing a particular
service. On this basis the infrastructure manager then investigates
the availability of the requested train path. If it is available, the
train path may then be requested.

(23) Letter from GVG to DB of 5 September 1995; request made by DB
to FS in September 1995. By letter of 11 September 1996, DB
repeated its request on behalf of GVG.
(24) Letter from DB to GVG of 28 January 1997.
(25) Reply to a request for information on 26 February 2002.

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basis of Directive 91/440/EEC and to set up an
international grouping on the basis of that Directive.

(30) After GVG joined FTE on 1 April 1998, it was able to
make its own requests. Since that date, GVG had
contacts with FS concerning its requests during all FTE
least since December 1998, GVG also
meetings. At
requested FS to provide traction for its planned rail
passenger service (26).

out

sets

that

(35) On 27 October 2000, FS published the network
information manual
criteria,
procedures, conditions and fees for access to the Italian
railway network. On 13 December 2000, FS offered
train paths to GVG without, however, specifying the
them. GVG refused the paths
price to be paid for
because they would not have allowed it to provide the
service as envisaged and they did not permit connection
with train paths already offered by SBB (30).

the

(31) On 27 November 1998, FS replied for the first time in
writing, pointing out that it would provide information
(on timetables,
infrastructure charges, etc.) only after
it had
GVG had presented documents showing that
entered into an international grouping, that it possessed
a safety certificate in Italy and that it had a licence in
conformity with Directive 95/18/EC (27).

(36) During the FTE A meeting (see footnote 19) in January
2002, FS provided GVG with information for the first
time,
including the price for a train path between
Domodossola and Milan. However, given the fact that at
that point FS did not offer a particular train path, the
price was an estimate and therefore no more than
indicative.

(32) According to the minutes of an FTE meeting on 20
August 1999, GVG, FS, SBB and BLS met to discuss
GVG's project. It is noted that GVG made a bid for a
train path (28) and asked for
the formation of an
international grouping between FS and GVG on the
basis of Directive 91/440/EEC. This request was then
repeated by GVG during all subsequent FTE meetings.

(37)

In its defence, FS has argued that it was not obliged to
respond to GVG's requests since they were unclear, and
since they related only to train paths and occasionally to
traction but not to the establishment of an international
grouping.

(33) On 25 October 1999 (29), GVG lodged its complaint
with the Commission, arguing that FS had abused its
dominant position by not providing the requested
information regarding access to the network and by not
entering into an international grouping. Thereafter, GVG
continued to make requests to FS regarding traction and
It also
the formation of an international grouping.
continued
related
and
information during various meetings of the FTE.

requesting

train

path

a

(34) On 2 and 3 December 1999, GVG wrote to FS
complaining that at all FTE meetings in the past five
years it had asked FS to enter into an international
grouping in order to operate its train from Basle to
Milan without having received any reply from FS. GVG
also reiterated its request for information regarding the
train path from FS (Infrastruttura).

(26) Letter from GVG to FS of 12 December 1998.
(27) Letter from FS to GVG of 27 November 1998. It is noted that FS
did not inform GVG that FS itself was responsible for granting
such a safety certificate.

(28) In its FTE requests, GVG never got beyond the first step, i.e. the
bid for the train path in order to find out whether it is available.

(29) The complaint was sent to FS by fax on 29 October 1999.

(38)

It should, however, be noted that GVG had written to
FS already in 1992 informing the latter about its interest
in operating an international passenger transport service
assertions
and requesting related information. FS's
conflict with DB's confirmation to the Commission that
between 1995 and 1997 its staff had discussions with FS
and SBB during three FTE sessions concerning GVG's
project, that it had informed FS that GVG wanted to
carry out this train service on the basis of Directive
91/440/EEC and that GVG requested to enter into an
international grouping. Moreover, a DB report on the
FTE meeting in La Rochelle in 1996 remarks that GVG
requested train paths from SBB, BLS, FS and SNCF. SBB,
BLS and SNCF replied to the requests (31). The report
notes that, with regard to GVG's project for a train on

(30) FS offered two train paths from Milan to Domodossola with the
schedules 7.15—8.45 and 12.05—13.35. In the opposite direction
it offered only one train path from Domodossola to Milan at
20.45—22.15. As there was only one return train path offered,
instead of operating two trains a day, GVG could have operated
only one. In addition, the early departure time on one train in
Basle and the late arrival time in Milan would have made the
service unattractive for any beyond traffic. Finally, as the schedule
offered by FS was different from the one requested, the train paths
did not allow for connection at Domodossola. GVG claimed that
SBB could not offer connecting train paths for the ones offered by
FS.

(31) DB Netz, internal report of 20 January 1997.

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SBB was

responsible

for
the Basle-Milan route,
coordinating with FS. In spite of repeated requests made
by SBB, no reply was forthcoming from FS. Thus,
among the various railway companies to which GVG
made requests, only FS did not react. In addition, FS's
view was not shared by SBB, which on the basis of
GVG's bid entered into negotiations with GVG and
provided a train path as well as related information
from 1996 onwards.

international grouping agreement and agreed on the
terms of the traction contract.

E. COMPLAINT AND SUBSEQUENT PROCEDURE

(39)

It is also noted that even during the period between
August 1999 and August 2002, during which FS has
acknowledged that it was aware of GVG's requests, it did
not enter into negotiations for the conclusion of a
traction or an international grouping contract.

(43) On 25 October 1999, GVG lodged its complaint against
the latter had abused its dominant
FS arguing that
position by refusing to grant GVG access to the Italian
railway market.

(40)

to provide

It is therefore concluded that since September 1995 FS
knew of GVG's
an
firm intention
international passenger service from Basle to Milan on
the basis of Directive 91/440/EEC and that at least since
August 1999 it was informed of GVG's request to enter
into an international grouping with FS. GVG repeated
this request in writing to FS,
in its complaint to the
Commission and at all FTE meetings. Furthermore, FS
has been aware at least since December 1998 that GVG
wanted it to provide traction for this service.

(41) During the FTE B meeting on 16 May 2002, FS (RFI)
undertook to provide GVG with a reply to its request
for
train paths. On 24 July 2002 FS (RFI) offered
specific train paths to GVG between Domodossola and
Milan. However, by that time SBB had withdrawn its
offer for the corresponding train paths between Basle
they had been taken up for
and Domodossola as
service. During the FTE A
rail
another
meeting on 23 January 2003, FS (RFI), GVG, SBB and
DB further discussed GVG's project (32). GVG entered a
new request for train paths on this route. However, so
far FS (RFI) and SBB have not been able to make a
suitable offer.

transport

(42) On 2 August 2002 FS (Trenitalia)

expressed its
willingness to enter into an international grouping with
GVG and to provide
latter. On
27 June 2003, FS (Trenitalia) and GVG signed an

traction to the

(32) The minutes mention the exact train paths requested by GVG
between Basle and Domodossola and Domodossola and Milan, and
that GVG would need connections with trains coming from
Germany to Basle.

to FS. At

this preliminary stage,

(44) On 22 June 2001, the Commission sent a statement of
objections
the
Commission had come to the conclusion that FS had
abused its dominant position on the upstream markets.
It had prevented GVG from gaining access to the
infrastructure by refusing to provide information to
GVG and it had refused to provide traction. Finally, FS
had abused its dominant position by refusing to enter
into an international grouping with GVG. By doing so,
FS had eliminated all competition on the downstream
market of passenger transport by rail.

(45)

Following FS's written reply to the
statement of
objections, on 30 October 2001 a hearing took place.
While recognising that
in principle it could have
provided technical information to GVG, FS argued that
due to its internal reorganisation it was not yet ready to
do so. As Directive 91/440/EEC had started a process of
the application of competition
gradual
rules
should have been temporarily
the process of restructuring national
suspended until
completed. FS furthermore
railway companies was
the
argued that GVG did not depend on FS for
provision of traction and that no obligation existed for
FS to enter into an international grouping.

liberalisation,
to the sector

(46)

Following the hearing,
the Commission undertook
further fact-finding in order to verify the assertions
made by both parties during the hearing.

(47) On 6 December 2002, FS offered the commitments
attached to this Decision. FS (Trenitalia) offers to enter
into international grouping agreements with other EU
railway companies under the condition that the latter
have a licence in accordance with Directive 95/18/EC
the
they present a reasonable project
and that

for

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16.1.2004

transport services in Italy (33). As
operation of rail
discussed in more detail in recitals 160 and 161, it has
also offered to provide traction services on the Italian
network to railway companies providing international
passenger services.

F. RELEVANT MARKETS

i.e.

the Domodossola-Milan segment.
Basle to Milan,
Trains originating in Basle may also pass via Chiasso
and via France. However, these other routes do not offer
an alternative for GVG, as they would mean a longer
travelling time. In any case, as FS (RFI) operates the only
long-distance rail network in Italy any other possible
connection between Basle and Milan would also imply
that GVG has to rent network capacity from FS (RFI).

1. THE RELEVANT UPSTREAM MARKETS

1.2. TRACTION MARKET

(48)

Two upstream markets can be identified: the market for
access to the infrastructure and the traction market.

1.1. MARKET FOR ACCESS TO THE INFRASTRUCTURE

The product market

The product market

(49)

EU directives,

The Court of First Instance has considered that there is
for access to and management of railway
‘a market
infrastructure' (34).
as
In addition,
transposed into Italian law, have established to whom
and under what conditions infrastructure capacity can
be sold. Directive 91/440/EEC establishes a right of
access to the infrastructure for international groupings.
In Italy, FS (RFI) sells network capacity to transport
service providers such as FS (Trenitalia), Cisalpino, Rail
Traction Company (hereinafter ‘RTC') and Ferrovie Nord
Milano SpA (hereinafter
that
providing access
to the railway infrastructure is a
discrete market capable of separate delineation.

‘FNME').

follows

It

The geographic market

(50)

In order
to provide its rail passenger service from
German cities, as mentioned above, to Milan via Basle,
GVG needs access
to the Italian network between
Domodossola and Milan. Thus, from the demand side,
the relevant geographic market is an intercity railway
path in Italy which is connected to the Swiss railway
network and which allows GVG to run its train from

(51)

(52)

includes

ancillary

Traction is defined as the provision of a locomotive and
driver. This
a
the
locomotive and driver back-up. In principle, traction can
either be provided in-house, i.e. by GVG or its partner
in the international grouping using their own personnel
and locomotives, or traction can be rented from other
railway companies.

service of

In particular,

traction is linked to a specific rail
The provision of
In this
transport service on the downstream market.
case it is a passenger rail transport service from Basle to
Milan via Domodossola. As the traction is provided with
a view to carrying out this particular transport service,
certain requirements have to be fulfilled by the traction
the traction supplier has to
supplier.
provide a locomotive at a certain location (here:
Milan/Domodossola), at a certain point in time (before
the departure of the train) and for a certain time period
(until the specific transport service is terminated). In the
case of a scheduled train service, such as GVG's planned
service between Basle and Milan,
traction has to be
provided on a regular basis (daily). The locomotive has
to meet certain quality requirements (such as minimum
In this
speed) and it has
particular case, GVG requires an electric locomotive
capable of speeds of at least 160 km/hour.

to be fully operational.

(33) As stated in recital 71, an international grouping can take many
forms, including a loose agreement that only confers traffic rights
to the grouping members.

(34) Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94 European
Night Services Ltd (ENS), Eurostar
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 [1998] ECR II-3141 (‘the
ENS judgment'), paragraph 220.

(UK) Ltd,

(53) A contract for traction must, if it is to be meaningful,
include whatever back-up is necessary to ensure
reasonable certainty in terms of punctuality, reliability
and continuity of the service. Such back-up would need
to include the maintenance and repair of the locomotive
as well as the provision of a replacement locomotive, if
necessary. With regard to the driver,
the traction
supplier has to ensure that the driver has the necessary
licence and the route knowledge for the specific service.

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L 11/25

(54)

(55)

As in the case of the locomotive, the driver has to be
provided at a certain location, a certain point in time
and for a specified duration. A back-up requirement
exists also for the driver.

(56)

The market for traction is different from the market for
locomotives. Traction
the renting or purchasing of
services can only be provided by railway companies, as
they have a licence to do so. Locomotives can be rented
from
or purchased
manufacturers. The
a
of
locomotive is not a substitute for traction as it concerns
only the provision of rolling stock. Traction instead
includes also the provision of a driver, maintenance and
repair
additional
elements are necessary to ensure the continuity of a
scheduled passenger transport service.

companies or
or purchasing

from railway
renting

and the back-up. These

services

Similarly, based on UIC rules, FS (Trenitalia) regularly
provides traction services to foreign railway companies.
It provides traction, for instance, to SNCF for passenger
transport from Milan and Turin to Lyon (38). On 13
different
routes between Germany and Italy, DB
regularly operates train services with its ‘Autoreisezug'.
FS (Trenitalia) provides traction and ancillary services to
DB on the Italian network for a price of […](*) and
wagon. According to the contract between the parties,
such services comprise a volume of at least […] per
year. In 2000 and 2001, FS (Trenitalia) provided traction
for the Overnight Express which operated six nights a
week between Amsterdam and Milan. The Overnight
Express was a combined passenger/freight train which
consisted of approximately five passenger wagons and
seven freight wagons (39). FS (Trenitalia) also provides
traction services to private wagon owners in Italy and to
Intercontainer
for
European
international container transport services to Milan. In
May 2001, FS (Trenitalia) provided traction to GVG for a
passenger
transport service from Chiasso to Monte
Carlo.

Shuttle

Rail

and

train

freight

British

operators

In the UK,

In recent years, a readily identifiable traction market has
for
developed in various Member States.
instance,
EWS,
Freightliner, GB Railfreight and DRS provide Network
Rail with traction for infrastructure trains. In Germany,
DB and other private railway operators provide traction
on a commercial basis to each other and to ‘private
wagon owners'
for passenger transport, and DB has
provided traction to the GVG/SJ international grouping.
On the basis of bilateral agreements and International
rules (35), national
railway
(UIC)
Union of Railways
each other with traction for
companies provide
SNCF
cross-border
‘penetration'
provides traction services on the French railway network
for international passenger charter services of foreign
railway companies and private wagon owners, and to
DB for its ‘Autoreisezug' (37) on routes from Germany to
Avignon,
and Bordeaux. Société
Nationale des Chemins de Fer Belges (SNCB) provides
traction on the Belgian railway network for
the
passenger night
train operated between Paris and
Amsterdam by SNCF and Nederlandse Spoorwegen (NS).

Fréjus, Narbonne

services (36).

and

The geographic market

(57)

(58)

In all EU Member States, the locomotive has to comply
with national technical standards and the crew (driver)
needs special qualifications/training to be permitted to
this
drive on the national
particular service, neither the locomotive nor the crew
of railway undertakings of another Member State can be
used to provide traction in Italy. As a result, GVG can
only rent traction from an undertaking that operates in
Italy, i.e. which has locomotives and drivers that fulfil
Italian technical criteria.

railway network.

For

in order

to provide back-up,

Further,
the traction
provider needs to be able to call upon a pool of
locomotives at reasonably short notice in the event of
technical failure. This means that the pool has to be
sufficiently close
to the Domodossola-Milan route,
otherwise the time and cost incurred in providing the
replacement locomotive will be disproportionate. The
relevant geographic market is therefore confined to the
region of Milan.

(35) UIC fiche 471-1 specifies the rules for cross-border traffic.
(36) CFL, DB, NS, SNCB and SNCF for instance have concluded a
services. A price list
for cross-border
multilateral agreement
annexed to this multilateral agreement provides detailed prices for
traction and prices for personnel (drivers and others). Prices vary
according to the locomotive used, and whether it is a passenger or
a freight transport service.

(37) The ‘Autoreisezug' transports simultaneously passengers and their

cars.

(*) Parts of this text have been omitted to ensure that confidential
information is not disclosed. These parts are enclosed in square
brackets.
(38) The ‘ETR 460'.
(39) The transport of goods was focused on express cargo, i.e. goods
that need to be delivered in a relatively short time (time-critical
delivery), such as flowers, express mail, spare parts and air cargo.

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3. INTERNATIONAL RAIL PASSENGER TRANSPORT
MARKET

The product market

service for the customer. This assertion is not correct, as
GVG's service is addressed mainly to passengers who are
fed into Basle from Germany. For a comparison of
travelling time for this group of passengers between
GVG's train and existing connections it is important to
consider two elements. The first element is the travelling
time between Basle and Milan and the second element
the interconnection with feeder
trains from and to
places in Germany.

(59)

(60)

the

transport

developed

approach (40)

In air transport decisions, supported by case-law, the
point-of-origin/
Commission
has
point-of-destination (O & D) pairs
for
passenger
services. This principle applies
the transport mode chosen by the
irrespective of
individual passenger. GVG proposes to provide a rail
passenger
like
Karlsruhe, Koblenz and Mannheim to Milan via Basle.
Each of these routes can therefore be considered to be a
relevant market on its own.

from several German cities

service

In transport, under certain conditions passengers may
consider air travel, high-speed rail travel, coach and car
travel to be interchangeable modes of transport. This
depends on the concrete characteristics of the service,
for instance the travelling time. In this particular case,
such as car, coach or air
other
transport, do not offer
from the
customer's point of view for the planned rail transport
service for the reasons set out in recitals 61 to 67 (41).

transport modes

an alternative

(61) GVG's proposed ‘Sprinter' service from German cities to
Milan via Basle is directed toward business customers
from Germany. The main advantage for the latter would
travelling time, since GVG's
arise from the shorter
point-to-point service aims to be at least one hour faster
than existing trains. GVG also plans
to provide
additional services for business customers on the train.
For such customers, car and coach transport do not
offer a valid alternative. For traffic between Karlsruhe,
Koblenz and Mannheim to Milan, there is no scheduled
coach service.

(62)

In its written reply to the statement of objections, FS
argued that the overall journey time of GVG's planned
service would be more or less identical to the service
operated by Cisalpino and not much shorter than that
of traditional services,
inter alia because the particular
line does not allow a speed of 160 km/h to be exceeded.
GVG's planned train would therefore not offer a new

in line with the case-law of

(40) See, for example, Commission Decision 2002/746/EC of 5 July
2002 Austrian Airlines/Lufthansa (OJ L 242, 10.9.2002, p. 25).
(41) To consider only rail transport as the relevant downstream market
is
the Community Courts as
established in Case T-229/94 Deutsche Bahn (see footnote 21),
paragraph 56. In this judgment, the Court pointed out that ‘the
Commission was justified in not taking into consideration, in its
material definition of the market, the services provided by […]
road hauliers and inland waterway transport operators.' See also
IV/33.941
in
94/210/EC
Commission
HOV-SVZ/MCN (OJ L 104, 23.4.1994, p. 34).

Decision

Case

shorter

(63) GVG's schedule, as set out in recital 9, does not require
the train to operate at a higher speed than 160 km/h.
in
travelling time of GVG's
The
comparison with traditional services results in particular
from the fact that GVG's planned train is a non-stop
service. Existing trains operate with 14 stops between
Basle and Milan. GVG's planned schedule furthermore
saves time in comparison with existing connections due
to a shorter stop in Domodossola for the exchange of
locomotives.

service

(64)

In comparison with the Cisalpino, for passengers from
and to places in Germany, the main advantage of the
planned GVG train is the interconnection in Basle. The
Cisalpino operates in Basle from the ‘Basle SBB' railway
station. Trains from Germany arrive in the Basle Bad
railway station. Cisalpino passengers therefore have to
transfer from one railway station to the other, which
takes about 30 minutes. By way of contrast, GVG's train
would operate directly into Basle Bad where, as set out
in recital 9, passengers would have a connecting
Intercity train to Germany within seven to eight
minutes. More importantly, Cisalpino's departure time in
Basle of 6.17 is too early for passengers who start the
journey in cities like Koblenz, Karlsruhe or Mannheim.
Such passengers would have to come to Basle the day
before to catch the Cisalpino in the morning. Similarly,
the Cisalpino from Milan arrives in Basle only at 21.44.
The only possible connection is then a regional train
from Basle Bad at 23.33 (which is slower than the
Intercity train). As a result, for passengers taking the
Cisalpino the overall travelling time to Germany would
be almost three hours longer than with the planned
GVG train.

(65) GVG's train offers a transport service that, if at all, is
comparable only to a car transport service provided by
a chauffeur. Car travel cannot be considered to be a
transport service if the passenger drives the car himself.
Moreover, the quality of transport differs considerably
between the two transport modes (42). Trains enable
congestion problems on the road to be avoided. It is
possible to work on the train while it is difficult to do
so in a car even if one has a driver. In addition, the

(42) On all of the three routes discussed here,

from Karlsruhe,
Koblenz and Mannheim to Milan, one would have to drive more
than 1 000 km for a return trip. The estimated travelling time of
the car journey would be considerably longer than the train
connection planned by GVG.

i.e.

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estimated travelling cost would be significantly higher
for the use of the car (43). On the other hand, the car
offers more flexibility than the train, as regards the
departure time and mobility after arrival. Thus, with
regard to the present route, car and rail transport offer
substantially different quality elements and therefore
cannot be considered to be close substitutes on this
market.

(68)

The geographic market

It follows that for the relevant bundle of routes from
Germany to Italy, i.e. Karlsruhe, Koblenz and Mannheim
to Milan, transport by rail is not interchangeable from
the
the customer's point of view and, as a result,
relevant downstream market
rail
is
passenger
abovementioned
between
transport
German cities and Milan.

in this
the

case

(66)

(67)

there are

Similarly,
considerable quality differences
between travelling by train and by aircraft. GVG aims to
feed passengers into Basle from cities in Germany which
either do not have an airport nearby or where no direct
flights to Milan are available.
they wish to fly,
passengers from such a place of origin would first have
to travel to the airport. Thereafter they have to take the
aircraft while changing to a bus or train to travel from
Malpensa airport to the city centre of Milan (44). The
frequent changes between the bus and the plane and the
need to check in and to pass through controls at the
airport cause numerous disruptions which prevent the
traveller from working while travelling.

If

to

and

EUR

EUR

In the case of point-to-point traffic between Basle and
Milan, a price comparison demonstrates that transport
by air and rail belong to different markets. A return
ticket on the Cisalpino in the first and second class cost
EUR 310 and EUR 194 respectively. On the same day,
the corresponding price
for a business class and
economy class ticket on a direct flight offered by Swiss
amounted
749,14
811,87
respectively (45). Thus, air transport is at least about 2,6
times more expensive than existing train connections.
the estimated
On the other hand,
travelling time of air transport is significantly shorter
than the travelling time by train. In this particular case,
between Basle and Milan the Cisalpino takes about four
hours, 30 minutes. By way of comparison, if one takes
into account the time needed to travel to and from the
airport as well as check-in, air travel between the two
cities may take about three hours (46). Thus, from the
standpoint of the passenger,
in this case train and air
transport services cannot be regarded as substitutable
due to their different characteristics, prices and intended
use.

in most cases

Access to the market

for

the

grouping

(69) As set out in recital 12, a particularity of the European
rail passenger market is the legal requirement to form
an international
provision of
international passenger rail services. Article 10(1) of
Directive 91/440/EEC establishes access and transit
groupings
rights
provide
for
to
international
services. Article 10(3)
requires that such international groupings conclude the
financial
necessary
agreements with the infrastructure managers with a
view to regulating traffic control and safety issues.

international
rail

administrative,

transport

technical

and

(70) Only after having concluded an international grouping
with a railway undertaking established in Italy can GVG
provide its service from Germany to Milan. Like access
to the infrastructure, conclusion of
the international
is therefore a precondition for
grouping agreement
entering the market. However, while access
to the
infrastructure
to be provided by infrastructure
managers, the international grouping agreement is to be
concluded with railway undertakings which provide
transport services. As argued by FS in its written reply
to the statement of objections (47),
therefore
considered that
formation of an international
the
grouping relates to the passenger rail transport market.

is

is

it

(43) For instance, even without a chauffeur, on the basis of GVG's
envisaged prices and a cost per kilometre of EUR 0,22 for
travelling by car, travelling from Koblenz to Milan and back by car
would cost about 37 % more than travelling by train with GVG's
proposed service. The cost difference would increase significantly
if one adds a chauffeur for the car journey.

(44) For passengers from Karlsruhe, Koblenz and Mannheim, there are
no convenient flights available to Milan-Linate. The only possible
flights would be from Frankfurt. This, however,
increases the
travelling time to the airport in Germany. In addition, the only
flights from Frankfurt
too early in the
morning (at 7.45 and 8.25) or in the evening (at 18.50). Such
connections are not comparable with GVG's proposed time
schedule. In the case of Koblenz, the passenger would leave at
10.47,
in the case of Mannheim at 12.44 and in the case of
Karlsruhe at 13.06.

to Milan-Linate depart

(45) Prices applicable on 13 May 2003.
(46) The flight time between Basle and Milan is one hour 10 minutes.

(71)

follows from the judgment of

It
the Court of First
Instance in the ENS case (48) that there is no specific
mandatory form for an international grouping (49). In
particular, an international grouping does not have to
take the form of a traditional joint operation agreement
in the railway sector. It also follows from that judgment
that it is not unusual for railway undertakings to enter
into agreements solely aimed at conferring a contractual

(47) Ferrovie dello Stato SpA, Trenitalia SpA, Rete Ferroviaria Italiana.
SpA: Observations submitted pursuant to Article 19 of Regulation
No 17 in the proceedings relating to Case COMP/37.685 GVG/FS,
p. 60.

(48) See footnote 34. Paragraph 182 of the judgment.
(49) See also the Communication from the Commission ‘Towards an
integrated European railway area' (COM/2002/18 final, 23.1.2002),
Annex II.

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fall

the

also

least

under

definition

commercial

into other

right of access to the railway infrastructure in the other
railway undertaking's Member State, without necessarily
also entering
agreements
concerning the joint operation of services (50). Such
agreements
of
‘international grouping' as they constitute an ‘association
of at
two railway undertakings established in
different Member States for the purpose of providing
international transport services between Member States'.
The concept of an international grouping is therefore
anything between a fully fledged commercial agreement
under which the parties share risk more or less equally
and an agreement under which parties only confer
to
access
each
Directive
any
commercial risk.

other
91/440/EEC (51) without

pursuant
bearing

rights

to

G. DOMINANCE

1. FS AS AN UNDERTAKING

(72) Until July 2001, FS was a single undertaking responsible
for the operation of the railway infrastructure and the
provision of transport services.

(75)

(76)

(73) On 13 July 2001 FS accomplished a restructuring
process to become a holding company. Within this
holding company, as legally independent subsidiaries,
FS (Trenitalia)
services,
responsible for
rolling stock and traction, and FS (RFI) is responsible for
the operation of the infrastructure.

transport

is

(74)

There has been a clear continuity of behaviour on the
part of FS and its subsidiaries before and after separate
entities were established in July 2001. As set out in
recitals 30 to 40, at least since December 1998 and
since August 1999 FS and its subsidiaries have been
aware of GVG's request to enter into negotiations as

regards traction and an international grouping contract
respectively. Until August 2002, neither before nor after
the restructuring did FS or its subsidiary Trenitalia enter
into such negotiations. Similarly, for the period between
September 1995 and July 2002, neither FS nor its
subsidiary RFI offered specific train paths to GVG.
Moreover,
FS
subsidiaries have taken an identical position on this
case. While the statement of objections issued on 22
June 2001 was addressed to FS, a joint written response
was provided by FS and its subsidiaries Trenitalia and
RFI on 16 October 2001.

FS holding company and the

the

issues

grouping while

in relation to this case, FS (Trenitalia) has
Thereafter,
related to traction and the
dealt with all
been
international
to
responsible
infrastructure.
is not
responsible for actions taken by its subsidiaries with
regard to this case.

issues
FS has not

to the
argued that

access
it

(RFI) has

related

for

FS

an important

Also after the restructuring, FS can be considered to be
one undertaking within the meaning of the EC Treaty.
The FS holding company holds 100 % of the shares of
its subsidiaries Trenitalia and RFI. Moreover, a joint
economic interest exists between the holding company
and its subsidiaries. All three undertakings operate in
the same industrial sector and action taken by one
subsidiary can have
effect on the
performance of the other subsidiary, thereby affecting
the profitability of the FS holding company as a whole.
is by far the most
On the one hand, FS (Trenitalia)
important customer of FS (RFI). On the other hand, as
the infrastructure manager, FS (RFI) plays an important
role in deciding whether and to what extent potential
to the
competitors of FS (Trenitalia) gain access
infrastructure and therefore whether they can enter the
market. As the holding company and its subsidiaries are
all owned by one and the same shareholder, the latter
has an interest in ensuring that behaviour within the FS
holding company is sufficiently coordinated.

and

carrier

national

Swedish

(50) ENS judgment (see footnote 34), paragraph 188.
(51) GVG has already formed two such international groupings with SJ,
the
the Austrian
railway
Graz-Köflacher Eisenbahn. Both groupings have been in place for
more than two years and have been notified to the respective
national authorities. In both cases, the agreement ensured that the
parties obtained the respective traffic rights.
In both cases, no
further obligation initially arose from the agreement. In the case of
the agreement between GVG and Graz-Köflacher Eisenbahn each
services between
company carries out
the
Austria and Germany. Only if requested by the partner,
companies may also provide additional assistance to each other on
is not part of the international
an ad hoc basis. This, however,
grouping contract
the agreement
between GVG and SJ, the initial grouping contract only conferred
traffic rights. However, the companies subsequently decided to
deepen their cooperation.

itself. Also in the case of

its own international

(77)

Such coordination is ensured mainly vertically, as the FS
holding company owns the entire share capital of RFI
and Trenitalia.
It is in a position to exert a decisive
influence on RFI's and Trenitalia's policy. According to
FS's annual report 2001, the FS holding company is
responsible for setting strategic policy and management
direction for its subsidiaries such as RFI and Trenitalia.
It is ultimately responsible to the shareholder for the
group's success (52). There is a consolidated annual
balance sheet which aggregates the profits/losses of its
various subsidiaries.

(52) Ferrovie dello Stato SpA ‘[…]

jointly responsible towards the

shareholder for the reorganisation of the Group […]'.

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(78) As the holding company is responsible for the definition
and implementation of the undertaking's overall policy,
it can be held liable for the behaviour of its subsidiaries
RFI and Trenitalia. As stated by the Court of Justice in
Stora (53): ‘On several occasions the Court of Justice has
held that the fact that a subsidiary has separate legal
personality is not sufficient to exclude the possibility of
its conduct being imputed to the parent company,
especially where the subsidiary does not independently
decide its own conduct on the market but carries out, in
all material respects, the instructions given to it by the
parent company' (54).

(79)

The fact that RFI and Trenitalia both belong to the same
holding structure gives them common interests as a
consequence of which they cannot be seen as ‘legally,
administratively and structurally' unrelated to each
other (55).

(80)

to the infrastructure. This

FS is an undertaking within the meaning of Article 82.
It provides rail transport services on a commercial basis.
In addition, FS has been assigned certain regulatory
functions in its role as the infrastructure manager and
allocation body. Due to this role, FS (RFI) acts as the
infrastructure capacity on the market for
supplier of
access
is a commercial
activity. Moreover, as the infrastructure manager and
the procedures and
allocation body, FS determines
conditions under which suppliers of
transport
services carry out their activities. Thus, the provision of
rail
infrastructure facilities by FS contributes to the
performance of a range of services of an economic
nature and so forms part of its economic activity (56).
Consequently, FS is an undertaking within the meaning
of Article 82 of the EC Treaty also when exercising its
infrastructure management and allocation functions.

rail

(53) Case C-286/98 P Stora Kopparbergs Bergslags AB v Commission

[2000] ECR I-9925, paragraph 23.

(54) See in particular: Case 48/69 ICI v Commission [1972] ECR 619,
paragraphs 132 and 133, Case 52/69 Geigy v Commission [1972]
ECR 787, paragraph 44, and Case 6/72 Europemballage and
Continental Can v Commission [1973] ECR 215, paragraph 15.
(55) See Commission Decision 2002/344/EC of 23 October 2001 on
the lack of exhaustive and independent scrutiny of the scales of
charges and technical conditions applied by La Poste to mail
preparation firms for access to its reserved services (OJ L 120,
7.5.2002, p. 19), point 79. See also Commission Decisions
94/19/EC Sea Containers v Stena Sealink (OJ L 15, 18.1.1994, p. 8)
and 94/119/EC Port of Rødby (OJ L 55, 26.2.1994, p. 52) and the
judgment of the Court of Justice in Case C-242/95 GT Link/DSB
[1997] ECR I-4449,
in which the Commission and the Court
considered the behaviour of companies exploiting infrastructure in
relation to their subsidiaries active in the provision of services on
this infrastructure.

(56) Judgment of the Court of First Instance in Case T-128/98 Aéroports

de Paris v Commission [2000] ECR II-3929, paragraph 120.

(81)

(82)

(83)

(84)

is

therefore concluded that FS is

the
It
behaviour of its subsidiaries FS (RFI) and FS (Trenitalia)
also after the restructuring.

liable for

2. DOMINANCE ON THE RELEVANT UPSTREAM MARKETS

2.1. DOMINANCE ON THE MARKET FOR ACCESS TO

INFRASTRUCTURE

In addition,

FS has a statutory monopoly to operate the Italian
railway infrastructure.
in its role as the
infrastructure manager and the allocation body, FS (RFI,
formerly Infrastruttura, see recital 4 of this Decision) is
responsible for establishing and maintaining the Italian
railway infrastructure and assigning train paths
to
railway operators in Italy in return for a fee. Therefore,
in view of its position, only FS can sell train paths on
the Italian railway network to GVG in order to enable
the latter to operate on the Domodossola-Milan route.

The Court of Justice has held (57) that Article 82 applies
to an undertaking holding a dominant position on a
particular market even where that position is due not to
the activity of that undertaking itself but to the fact that
by reason of provisions laid down by law there can be
no competition or only very limited competition on
that market.

local networks

assigned to them via

There is no alternative infrastructure which GVG could
transport
use to provide the planned rail passenger
service. Apart from FS, there are regional railways that
operate
a
concession. These regional railway companies can grant
access to such local and regional networks. However,
regional railways only operate on specific connections,
occasionally using sections of
the FS network as
connecting track. Regional networks do not have
intercity links. It would therefore not be possible for
GVG to provide its service by using local and regional
railway networks in Italy.

(85)

FS is dominant on the entire Italian intercity railway
infrastructure. This
the Domodossola-Milan
segment.

includes

(57) Case 311/84 Télémarketing [1985] ECR 3261.

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2.2. DOMINANCE ON THE TRACTION MARKET

(91)

In the light of the foregoing, it can be concluded that
for the time being only FS could provide the right sort
of traction to GVG on the Domodossola-Milan route. It
is therefore clearly dominant on the traction market.

(86)

(87)

In this particular case,
traction requires an electric
locomotive that can operate at a speed of at least 160
km/hour and which has type approval to operate on the
Italian network. A further prerequisite
safety
the drivers need the necessary
that
certification is
language
the
skills and the
Domodossola-Milan sector.

route knowledge

for

for

2.2.2. Traction being provided by GVG itself

to operate on the Domodossola-Milan
In principle,
route, GVG could either obtain traction from an Italian
railway undertaking or it could provide traction by
itself. In the latter case it would have to set up its own
locomotive and driver pool in Italy or shop around for
i.e. the locomotive, the driver
the different elements,
and the back-up, from various sources.

(92)

The Commission has investigated whether GVG could
provide traction by itself on the basis of
renting
locomotives, drivers and back-up or by purchasing
locomotives.

2.2.1. Traction provided by other railway operators

2.2.2.1. Renting of locomotives, drivers and back-up

(88) Apart

from FS, other

railway companies offering
long-distance services in Italy are restricted to freight
transport. The small new entrants
into the Italian
railway market, like RTC and FNME (see recital 49), are
the only Italian railway companies which, on the basis
of
their own locomotive pools, could in principle
provide traction to GVG. However, according to the
Commission's investigation, they are not equipped to
provide traction services for GVG's planned service. To
the extent that they have suitable locomotives at all,
they lack the necessary spare capacity to provide such a
service (58).

(89) No non-Italian railway undertaking is in a position to
provide traction to GVG. SNCF owns 60 BB 36 000
locomotives which have the necessary type approval to
operate in Italy. However,
these locomotives do not
fulfil the technical requirements for GVG's services as
they are only authorised for freight transport services
and for a maximum speed of 120 km/h. SNCF also does
not have drivers who could operate on the Italian
railway
route
have
knowledge.

necessary

network

and

the

(90)

By way of contrast, as stated in recital 56, FS has
already provided traction services to SNCF, DB and
GVG. It has sufficient spare capacity to provide traction
for GVG's planned service (59).

(58) Reply to requests for information by RTC and FNME dated 20

February 2002 and 8 March 2002 respectively.

(59) As identified by FS in its letter to the Commission dated 6

December 2002.

investigation,

the market
neither

(93) On the basis of
it can be
nor
that
concluded
RTC
manufacturers like Alstom, Bombardier, Finmeccanica,
Siemens and Skoda are equipped to provide suitable
locomotives or drivers for rent. Thus, the renting of a
locomotive is not a feasible alternative for GVG.

FNME

and

(94)

If GVG wished to rent locomotives from a supplier, it
would in addition have to rent drivers from Italian
railway companies. For the time being, drivers with the
necessary Italian licence and route knowledge could
only be rented from FS.

rail

the planned international

(95) Hiring and training its own staff does not seem feasible
for
service. Due to
language problems and different training requirements,
GVG would find it difficult to employ German drivers in
Italy. Italian drivers on the other hand could hardly be
employed outside Italy. Thus, GVG would have to set up
its own pool of Italian drivers. It would also have to set
up a driver back-up service.
the domestic
long-distance passenger transport market and cabotage
is not liberalised. GVG would therefore not be able to
use these drivers for a number of different services, in
particular for train services in open competition within
Italy. It would therefore be highly uneconomic to set up
an Italian driver pool only for the purpose of providing
an international rail service from Basle to Milan. This

In Italy,

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Official Journal of the European Union

L 11/31

owned and controlled by nationals of another Member
State, GVG is not permitted to operate cabotage or
purely domestic services in free competition within Italy
under current Italian legislation. Thus, GVG could not
use the 5/6 spare capacity of the two locomotives to
In such a
operate domestic rail services within Italy.
situation, if it acquired three locomotives for its planned
service, GVG could use only one ninth of its overall
an
Italian locomotive
investment
completely
uneconomic. This reasoning applies to any potential
entrant, irrespective of its size.

capacity. This would make
locomotives
Italian

in

In order to provide domestic rail services in Italy, GVG
would therefore first have to set up its own Italian
subsidiary. Apart from the driver and the locomotive
pool, in order to obtain a licence and a safety certificate,
GVG's Italian subsidiary would in addition also have to
acquire rolling stock (wagons) suitable for passenger
transport. As a result, GVG main business would
become the provision of domestic rail services in Italy.
An investment on such a
scale would not be
proportionate for any entrant wanting to operate only
on one international route into Italy. Moreover, at the
present stage in the liberalisation of the Italian railway
market, even if it had carried out such an investment,
such an entrant would not be able to make any efficient
use of
the domestic long-distance passenger
market has not yet been liberalised in Italy, GVG's Italian
subsidiary would not be in a position to enter this
market (61).

it. As

impediment applies to any railway undertaking which
wishes
transport
services into Italy, irrespective of its size.

to provide international passenger

Finally, it is not possible to rent a back-up service for
the
the
locomotives
Domodossola-Milan route.

needed

GVG

on

by

the Domodossola-Milan

It is therefore concluded that providing traction by itself
on
renting
locomotives, drivers and back-up is not an alternative
for GVG to obtaining traction from FS.

route

by

2.2.2.2. Purchase of locomotives

(101)

In order to provide traction by itself on the basis of its
own locomotives and drivers on the Italian segment of
the Basle-Milan route, GVG would have to make an
investment in a dedicated locomotive and driver pool in
Italy. As set out above, the lack of interoperability and
different type approval procedures prevent GVG from
using locomotives approved in other Member States on
the Italian network.

(96)

(97)

(98)

(99)

For its planned service to operate twice a day between
and Milan, GVG would need two Italian
Basle
locomotives
to operate on the Domodossola-Milan
segment. With a distance of 250 km, operation on this
route would bind 1/6 of the capacity of a locomotive.
Finally, GVG would need a third locomotive for the
back-up. Operating on the basis of three locomotives is
not economic since one third of locomotive capacity is
bound by the back-up. This generates high fixed costs.
Bearing in mind the sometimes considerable variation in
is not unreasonable to
it
reliability of
envisage that a locomotive pool should comprise at
least 10 units.
In that case one locomotive would
provide the back-up for nine locomotives in operation,
which means
locomotive
that about 1/10 of
capacity would be bound by the back-up (60). Thus, in
order to operate at the minimum efficient scale, GVG
should be able to make use of a locomotive pool of at
least
to 10 locomotives, which cannot be
envisaged.

locomotives,

eight

the

its own locomotives and drivers,

(102) Moreover, if it wished to provide traction on the basis
any railway
of
undertaking which specialises in providing international
rail passenger services in the EU would have to set up
multiple subsidiaries in the various Member States. On
the European rail
the basis of
transport market
this would be a disproportionate
requirement for railway undertakings making use of the
free movement of
and therefore not an
economically viable option.

the current state of

services

(100) Moreover, at

the
European rail sector, as an undertaking substantially

this stage in the liberalisation of

(60) On average, European national

railway companies keep one
locomotive in reserve as a back-up for eight to 10 locomotives in
operation. Some private railway companies manage to operate
even with considerably lower back-up capacity.

(61) To the extent that such services are open for tender, GVG's Italian
subsidiary could only provide regional passenger transport services
in Italy. This market, however, differs considerably from the
locomotives and
long-distance market as it
different route knowledge for drivers.

requires different

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(103) Finally, even if one considered that such an investment
was economically viable, the market investigation has
shown that it is at least doubtful whether GVG could
acquire suitable locomotives.

prepared to do so within 24 hours; however, the price
would be close to the price of
renting a second
locomotive. This, however, is not economically viable as
the back-up should not bind more than 1/10 of the
locomotive pool's capacity.

in

locomotives

second-hand

(104) For the time being, there is no market for second-hand
locomotives in Italy. There may be the possibility of
acquiring
eastern
Europe (62). However, by FS's own admission, including
the conversion costs such a locomotive would cost
about EUR 1,4 million, to which must be added type
approval costs of, according to Bombardier, between
several hundred thousand euro and up to EUR 1,5
million. Such an investment seems not to be justified
given that
there would be significant difficulties in
obtaining spare parts and repair services at reasonably
short notice for such a locomotive.

(105)

In principle, it is possible to purchase new locomotives
that are suitable for operating GVG's service on the
Italian market (63). However, the Commission's market
investigation has shown that a number of economic,
legal and technical barriers rule out
this option. As
pointed out by the Union of European Railway
Italian technical specifications are
Industries (UNIFE),
very specific to the requirements of
the national
network. Locomotives would have to be custom-made
and the price would vary greatly depending on the size
of the order, delivery time, etc. As GVG would only
purchase a small number of locomotives, it would face
flag
a considerably higher price than the national
railway undertaking, which makes large orders. Some
exists whether manufacturers would
uncertainty
produce
tailor-made
locomotives at all. For locomotives that could be used
for GVG's service, estimates of the delivery time are
between 18 and 36 months.

quantity

small

such

of

a

(107)

if

the entry cost

In terms of yield, GVG would need about 190
passengers per train (64) (i.e. 752 passengers per day) to
cover
it decided to acquire new
locomotives to operate the train. Buying second-hand
locomotives would require about 80 passengers per
train to achieve cost coverage for traction only. This
does not seem to be feasible on the basis of existing
existing Basle-Milan
passenger numbers. Cisalpino's
service
than 35 point-to-point
passengers per train.

yields no more

(108) Finally, even if it were economically viable for GVG to
acquire locomotives for operation and back-up for the
Italian market, GVG would still depend on FS as regards
the provision of drivers and maintenance and repair
services.

(106) With one exception, manufacturers are not in a position
to provide back-up services. Bombardier would be

(62) Rail Traction Company (RTC) and Ferrovie Nord Milano (FNME)
assert that in principle it is possible to use foreign locomotives in
Italy. However, owing to the 10-12-month lead time for type
approval, RTC has chosen not to do so. FNME has imported a
locomotive from Skoda but it is used for freight services only and
is not suitable for GVG's planned passenger service. Skoda does
not offer locomotives suitable for GVG's service.

(63) With a view to establishing whether employing a new locomotive
is an option for GVG, there is no need to distinguish between the
purchasing and leasing of a new locomotive. The difference
between the two arises only with regard to the financing. Leasing
is a means of financing an investment. The leasing price is based
on the cost of acquisition, the cost of financing and additional
expenses. Thus, the sale price of the locomotive determines both
leasing. Moreover, the
the cost of purchasing and the cost of
leasing market in Italy is still in its infancy.

(109)

any other

railway undertaking,

It is therefore concluded that, in particular due to the
lack of interoperability of locomotives, the absence of
liberalisation of the Italian long-distance passenger rail
market and the prohibition of cabotage, an investment
by GVG, or
in
locomotives solely for the purpose of operating on the
Domodossola-Milan route would
prohibitively
expensive and would not make any commercial sense.
Due to these impediments, certain markets, such as the
leasing or
locomotives and the hiring of
drivers, are still in their infancy, which means that GVG
depends on FS providing traction for
the planned
transport service from Basle to Milan.

rental of

be

(64) Based on a model which FS (Trenitalia) developed internally to
evaluate the economic viability of its own operations, Lexecon has
developed a simulation model for FS, to verify whether GVG could
provide its planned service from Basle to Milan by acquiring its
own locomotives. On the assumption that GVG acquires two new
locomotives at a price of EUR 3,5 million, runs four trains a day
and carries on average 188 passengers per train, the simulation
the net cash flows are
the discounted value of
shows that
sufficient to cover the initial entry costs.

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2.2.3. Conclusion

on
then,

Italian
a
de

the
FS has

(110) Until April 2001, FS had a de jure monopoly for the
rail
provision
traction
of
infrastructure (65). Since
facto
monopoly for the provision of traction for passenger
services on the Domodossola-Milan route. Moreover, at
the present stage in the liberalisation of the EU railway
sector, GVG cannot provide traction by itself on this
route, and FS is the only source for traction on the
the provision of an
Domodossola-Milan route for
transport service between
international passenger rail
Basle and Milan.

these

companies

(114) So far, FS is the only undertaking with a licence to
provide intercity rail passenger transport in Italy. While
since May 2000 the Italian Ministry of Transport and
Navigation has granted several licences to other railway
undertakings,
operate
cannot
transport services as this
long-distance passenger rail
market has not been liberalised in Italy yet. Moreover, in
order to enter into an international grouping with GVG,
such railway companies would need a safety certificate
to operate passenger
on the
Domodossola-Milan route (66). In order to obtain such a
safety certificate, any railway undertaking would first
have to obtain the suitable rolling stock (which is then
certified). So far, only FS has obtained a safety certificate
to operate passenger rail
transport services between
Domodossola and Milan (67). FS is therefore so far the
only Italian railway undertaking that can enter into an
international grouping with GVG for
the particular
service that the latter wants to provide.

transport

services

(111)

It can therefore be concluded that FS is dominant on
the relevant traction market and that in order to operate
its planned service, it is indispensable for GVG to obtain
traction from FS.

4. DOMINANCE IN A SUBSTANTIAL PART OF THE
COMMON MARKET

3. DOMINANCE ON THE MARKET FOR RAIL PASSENGER
TRANSPORT

(112) On the routes that belong to the relevant market, as
defined above, only FS is present on the Italian segment
(via its cooperation with SBB and Cisalpino). FS is
therefore dominant on the market
for rail passenger
transport between Domodossola and Milan.

(115) Where

statutory
a Member State has granted a
monopoly to an undertaking on a certain part of its
territory, according to the case-law of
the Court of
Justice (68), this territory constitutes a substantial part of
the common market. As
regards the infrastructure,
according to Decree No 225-T of 26 November 1993,
FS still has a statutory monopoly. Thus, the market for
access to the Italian infrastructure can be considered to
be a substantial part of the common market.

and
needs

from the need to obtain access
the
ancillary
rolling

(113) There are considerable entry barriers in this market.
to the
Apart
railway
infrastructure
personnel
undertaking
and
complying with
administrative
for
signalling, electricity supply and safety apply. Finally, in
transport
order
service from Germany to Milan, any rail operator has to
enter into an international grouping.

to carry out such a rail passenger

and
technical
systems

services,
stock
national

standards,

different

different

as

(65) Until 8 July 1998, FS had a statutory monopoly to provide
traction on the Italian railway network. Since then, in principle,
other railway companies have the right to provide traction in Italy,
provided that they have a licence and that they have obtained a
safety certificate. However, until May 2000 the Minister of
Transport had not defined the criteria for granting a safety
certificate. As under Italian law the definition of these criteria is
necessary to grant a safety certificate, until May 2000 no
undertaking could enter the Italian traction market. Consequently,
until May 2000 FS had a de jure monopoly to provide traction in
safety
Italy. While thereafter
certificates were issued only after April 2001.

some companies were licensed,

(116) The relevant

traction market and the downstream
market for passenger rail transport are also a substantial
part of the common market. Until 8 July 1998, Decree
No 225-T granted FS a statutory monopoly with regard
to traction and the provision of rail passenger services.
In addition, the relevant market is a substantial part of
since the relevant geographic
the common market

(66) A safety certificate is granted for a particular route and for freight
or passenger services. In May 2003, 26 companies had received a
railway licence in Italy, while six companies were in possession of
the safety certificate.

Its

(67) The main private railway operators in Italy are Rail Traction
Company (RTC) and Ferrovie Nord Milano Esercizio (FNME). RTC
has obtained a licence to provide passenger and freight services in
Italy.
the
Verona-Brenner and Verona-Mantua route and to freight services.
FNME has obtained a licence to provide passenger and freight
services in Italy. It has also obtained a safety certificate to operate
on the Milan-Domodossola route. However, this safety certificate is
limited to freight transport only.

certificate,

however,

limited

safety

to

is

(68) Case C-323/93 La Crespelle [1994] ECR I-5077, paragraph 17; Case

C-41/90 Hoefner and Elser [1991] ECR I-1979.

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market includes several Member States (69). In this case
the Domodossola-Milan segment is part of the relevant
downstream market
rail passenger
services from Germany into Italy. It is a vital route for
rail transport, which connects northern and southern
Europe. As such it is part of the trans-European rail
network (TERN).

international

for

H. ABUSE OF A DOMINANT POSITION

(117)

(118)

its dominant
FS has committed several abuses of
position in the relevant upstream and downstream
markets which have had the effect of
foreclosing
competition in international rail passenger transport on
a number of routes from German cities to Milan via
Basle.

It is recalled that nothing in Italian law as described in
recital 13 of this Decision prevents FS from providing
information, entering into an international grouping (70)
with, or granting a safety certificate, granting access to
infrastructure and providing traction to a licensed
railway undertaking established in another Member
State.

1. ABUSE ON THE RELEVANT UPSTREAM MARKETS

1.1. REFUSAL TO GRANT ACCESS TO THE ITALIAN

INFRASTRUCTURE

(119)

FS holds a monopoly as the allocation body that has
been designated by the Italian State to decide upon
requests for infrastructure capacity on the Italian railway
network. In this capacity, FS is responsible for assigning
train paths to railway operators in Italy.

(120)

In line with the Court of First Instance's Aéroports de
can be
Paris
considered an essential facility. It fulfils the two main

railway infrastructure

ruling (71),

the

(69) Judgments of the Court of Justice in Cases C-40/75 Suiker Unie
[1975] ECR 1663, paragraph 375, and C-27/76 United Brands,
[1978] ECR 207, paragraphs 45, 56 and 57.

(70) In 1996, FS entered into an international grouping with SJ Rail.
(71) See footnote 56. Paragraph 122 of the judgment. The Court of
First Instance confirmed the Commission's Decision and found that
the airport facilities of the Paris airports can be considered an
essential facility. Their use is indispensable to the provision of
various services, in particular ground handling. Similarly, gaining
access to the infrastructure in Italy is essential for GVG for the
provision of international rail passenger services from German
cities to Milan.

conditions for an essential facility, as established by the
CFI in its ENS (72) decision, i.e. the indispensability of
the facility and, if access is not granted, the elimination
of all competition from the other operator (73). For any
competitor
it would be unfeasible to duplicate FS's
long-distance railway network because of the prohibitive
cost of such an investment and the impossibility of
getting the right of way.

(121) Restricting access to the railway network constitutes an
abuse of a dominant position if it excludes a potential
competitor from the market. In its decision in the Port
of Rødby case,
the Commission concluded that an
undertaking that owns or manages and uses itself an
essential facility, i.e. a facility or infrastructure without
which its competitors are unable to offer their services
to customers, and refuses them access to such facility, is
abusing its dominant position (74).

(122)

In its judgment in the Télémarketing case (75), the Court
ruled that ‘an abuse within the meaning of Article 86
[now 82] of the EC Treaty is committed where, without
objective necessity, an undertaking holding a dominant
position on a particular market reserves to itself or to
an undertaking belonging to the
same group an
ancillary activity which might be carried out by another
undertaking as part of its activities on a neighbouring
but separate market, with the possibility of eliminating
all competition from such undertaking'.

(123) As pointed out

in the Commission notice on the
application of competition rules to access agreements in
the telecommunications sector (76), a refusal
to give
access to facilities may be prohibited pursuant to Article
82 if the refusal is made by an undertaking which is
dominant because of its control of facilities. An undue,
inexplicable or unjustified delay in responding to a
request for access to an essential infrastructure may also
constitute an abuse.

(72) See footnote 34. Paragraph 209 of the judgment.
(73) In European Night Services (ENS), the Court of First Instance (CFI)
stated that an infrastructure, products or services are only essential
if such infrastructure, products or services are not interchangeable
and if, by reason of their special characteristics — in particular the
prohibitive
for
reproducing them — there are no viable alternatives available to
potential competitors, which are thereby excluded from the market
(see footnote 34. Paragraph 209 of the judgment).
(74) Decision 94/119/EC Port of Rødby (see footnote 55).
(75) See footnote 57. Paragraph 27 of the judgment.
(76) OJ C 265, 22.8.1998, p. 2, point 83 and Case 85/76 Hoffman-La

reasonably

cost of

required

and/or

time

Roche [1979] ECR 461.

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for

services,

transport

cross-border

(124) FS has made use of its power as allocation body to deny
for rail
GVG, a potential competitor in the market
train paths on the
passenger
Domodossola-Milan route.
It has both withheld from
GVG information necessary to enable GVG to prepare
an adequate business plan and it has effectively denied
access to GVG without objective justification. It has thus
prevented GVG from entering the market
the
provision of rail passenger transport services on this
route. In deciding to retain for itself the market for the
transport
provision of
services, FS has extended its dominant position on the
to this
market
for
neighbouring
In Decision
98/190/EC in the FAG-Flughafen Frankfurt case (77), the
Commission concluded that an infringement of Article
86 (now 82) arose as soon as FAG's monopoly on the
ramp-handling services market was maintained by a
refusal on its part
self-handling or
third-party handling. The fact that FAG already held a
dominant position on the ramp-handling market prior
to committing the infringement could not justify FAG's
decision to reserve for itself
the market by denying
ramp access to potential competitors.

separate market.

to infrastructure

rail passenger

to authorise

access

but

the

(125)

In the circumstances of the present case, an allocation
body verifiably independent of any railway undertaking
would certainly have actively considered all possible
means, in terms of availability of time slots and other
practical and technical issues, of granting GVG access to
the infrastructure on fair and non-discriminatory terms.
However, experience with previous cases suggests that
an allocation body that is also active in the market for
providing services on its own infrastructure is likely to
prefer
will minimise
inconvenience to itself, especially in relation to its own
operations as a user (78).

arrangement

which

an

establishment of an international grouping before even
providing information relating to prices of train paths
and their availability, since that may have the effect of
preventing market entry. Such information is necessary
to enable the entrant to establish a business plan and to
be
planned
judge whether
economically viable.

service would

the

(127) FS was in a position to provide such information and
give advice on related issues of access to infrastructure.
Before the entry into force of Decree No 146/1999,
FS (Infrastruttura (79)) was entitled pursuant to Article
8(5) of Decree No 277/1998 to issue a (temporary)
safety certificate in accordance with Directive 95/19/EC.
At that stage, as the infrastructure manager, instead of
refusing to provide the requested information on the
grounds that GVG did not have a safety certificate (80),
FS (Infrastruttura)
taken a proactive
should have
approach. For instance,
in line with its obligations as
the infrastructure manager, FS should have informed
GVG that it is FS (Infrastruttura) itself which grants the
safety certificate and advised it of what is required to
obtain such a certificate.

(128)

In addition, the Commission considers that Article 10(1)
of Directive 91/440/EEC has direct effect. According to
the relevant case-law of the Court of Justice, a provision
may have direct effect if the obligation imposed on the
and precise,
Member
sufficiently
unconditional and does not
leave any margin of
discretion in its implementation (81).

States

clear

is

(129) Article 10(1) of Directive 91/440/EEC is a provision that
clearly indicates that international groupings have the
right to obtain access to infrastructure. Such a provision
in itself does not require any further implementation
from Member States and can thus be considered
sufficiently clear and precise in accordance with the
abovementioned case-law.

(126) Directive 91/440/EEC does not explicitly mention the
right of access to technical information regarding access
to infrastructure for railway companies that have not yet
formed an international grouping. The Commission,
however, rejects FS's argument that such information
can only be provided and a train path can only be
reserved after
entered into an
applicant has
international grouping. Directive 91/440/EEC does not
prejudice the application of the competition rules of the
require the
EC Treaty. The allocation body cannot

the

(77) OJ L 72, 11.3.1998, p. 30, recital 98.
(78) Decision 94/19/EC in Sea Containers v Stena Sealink (see footnote

55), recital 75.

(130) Railway undertakings such as GVG could rely directly
on this provision to request
from FS information
necessary to enter into meaningful negotiations with
railway undertakings established in Italy with a view to
setting up an international grouping. Article 10(1) could
therefore be invoked by GVG since the entry into force

(79) The predecessor of FS (RFI). See recital 4 of this Decision.
(80) In its letter to GVG of 27 November 1998, FS pointed out that it
would provide information on train paths and infrastructure
charges only after GVG had presented documents showing that it
had entered into an international grouping and that it possessed a
safety certificate in Italy.

(81) Cases C-287/98 Linster [2000] ECR I-6917, C-8/81 Becker [1982]

ECR 53 and 28/67 Molkerei-Zentrale [1968] ECR 211.

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of Directive 91/440/EEC on 1 January 1993. GVG had
the right to form an international grouping with a view
to providing an international rail passenger transport
service to Milan. Hence,
it was entitled to request
information from FS regarding train paths and prices
Italian
with a view to obtaining access
infrastructure.

to the

reason. For instance, FS does not lack spare capacity for
traction services, there are no safety reasons preventing
FS from providing traction to GVG, FS could obtain an
adequate
such
services and it does not operate under public service
from providing traction
it
obligations which prevent
services to GVG.

the provision of

remuneration for

(131)

It is concluded that during the period at least from
September 1995 (82) until
July 2002, FS refused to
provide the necessary information for access to the
Italian railway infrastructure
to GVG without any
objective justification and thereby prevented GVG from
entering the market
rail passenger
transport in breach of Article 82 of the EC Treaty.

in international

(135) No lack of spare capacity: Following the hearing, FS
Trenitalia argued that it did not have spare locomotive
capacity to provide traction services to GVG. However,
after further investigation, FS Trenitalia finally declared
by letter of 18 December 2002 that it had quantified its
spare capacity for the supply of such traction services at
one million km per year.

1.2. REFUSAL TO PROVIDE TRACTION

(132) Recital 51 states that traction consists in the provision
of a locomotive, a driver and ancillary services such as
the back-up. There is a market for traction services, as
such services are provided on a commercial basis in
most Member States. Recitals 55 and 56 provide
examples showing that FS is and has been active on the
regular
traction market. For
traction services to SNCF from Milan and Turin to Lyon
and to DB for its international
‘Autoreisezug' on 13
different routes between Germany and Italy. On one
occasion it also provided traction services to GVG for a
rail
rail passenger
transport services are competing with transport services
provided by FS.

instance, FS provides

service. None of

transit

these

Italian segment of

(133) As set out in recitals 86 to 109, the Commission has
extensively examined whether GVG (or any other
railway undertaking from another Member State) would
have alternatives to renting traction from FS (Trenitalia)
the planned passenger
on the
and Milan. This
transport
examination has
there were no such
commercially viable alternatives available to GVG or any
in
other non-Italian railway undertaking. Therefore,
rail
order
to be able to provide an international
passenger service between Germany and Milan,
is
it
indispensable that GVG obtains traction from FS on the
Italian railway network.

service between Basle

shown that

(136) No safety reasons: Once it has ensured traction and it
has formed an international grouping, GVG would still
the planned
have to obtain a safety certificate for
passenger transport service in Italy. This is therefore a
separate and consecutive step. As the safety certificate is
issued by the infrastructure manager,
the
responsibility of FS (Trenitalia) to judge whether GVG
fulfils the necessary safety requirements. A refusal to
provide traction could therefore not be justified on the
grounds of safety concerns.

is not

it

(137) Adequate remuneration: FS has a right

to adequate

remuneration under normal commercial terms.

(138) No public service obligations: Finally, FS is under no
explicit obligation to provide a public service the
financial equilibrium of which could be jeopardised by
the services that GVG intends to provide (see recitals
154 and 155).

(139) GVG's planned service between Basle

and Milan
competes with the Cisalpino, which is a joint venture of
FS and SBB. This has been confirmed by FS's reply to
the statement of objections. FS considers that GVG's
planned service would have damaged its existing traffic
on the Basle-Milan route (83).

(134) As FS has not responded to GVG's requests for traction,
since December 1998 it has effectively refused to
provide traction services to GVG for this particular
service. FS's refusal was not justified by any objective

(140) FS has

therefore refused to provide traction to a
potential competitor in a neighbouring market to the
market for traction. FS is dominant not only in the
latter (upstream) market but also in the downstream

(82) GVG's first request to FS dates back to 1992.

(83) This is acknowledged by FS in its reply to the statement of

objections, points 89 and 107.

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market for rail passenger transport. On the downstream
market, there is no competition. By refusing to provide
traction to GVG, FS is preventing a potential competitor
from entering this market. It is thereby preserving its
monopoly position on this separate downstream market
that
by
market (84).

competition

eliminating

potential

on

the Court

(141) The Court has consistently held that the extension of a
monopoly in a given market to a neighbouring market,
without objective justification, is prohibited pursant to
Article 82 (85).
In Télémarketing (86),
found
that an abuse of Article 82 is committed where an
dominant position on a
undertaking holding
particular market
any
to itself, without
objective necessity, an ancillary activity which might be
carried out by another undertaking and if it thereby
eliminates all competition from such an undertaking.
This applies even where the dominant position is due
not to the activity of the undertaking itself but to the
fact that by reason of provisions laid down by law there
can be no competition or only very limited competition
in that market (87).

a
reserves

(142) The Commission found in Decision 98/190/EC in the
FAG-Flughafen Frankfurt case (88) that Frankfurt Airport
had abused its dominant position in breach of Article
82 of
the EC Treaty by denying, without objective
justification, potential competitors access to the market
for the provision of ramp-handling services at Frankfurt
Airport. This market was considered to be a separate
market from that of the provision of airport facilities.
Until the adoption of that Decision, Frankfurt Airport
had a monopoly on both the market for the provision
the provision of
of airport
ramp-handling services.

facilities and that of

(84) In a number of decisions, the Italian competition authority has
found that FS is dominant on the traction market for intermodal
container transport. In February 2000, the authority sanctioned FS
for having abused its dominant position in the railway traction
market for multimodal transport by favouring its own subsidiaries,
Italcontainer and Cemat. To deal with excessive demand for rail
traction, FS had to introduce a capacity allocation system to
ensure fair and efficient allocation of available traction resources.
(85) Case C-18/88 RTT v GV-Inno-BM [1991] ECR I-5941 and Joined
Cases C-271/90, C-281/90 and C-289/90 Spain, Belgium and Italy v
Commission [1992] ECR I-5833.

(86) See footnote 57. Paragraph 26 of the judgment.
(87) In Decision 88/518/EC British Sugar v Napier Brown (OJ L 284,
19.10.1988, p. 4), the Commission held that British Sugar abused
its dominant position on the British sugar market with a course of
conduct intended to force Napier Brown to withdraw from the
British retail sugar market.

(88) See footnote 77.

(143)

In the present case, although Italian law has appointed
FS's subsidiary RFI as the infrastructure manager, it does
not confer exclusive rights on FS for the provision of
international passenger services,
in particular on the
route at stake. FS's refusal is therefore only based on its
own commercial decision as an undertaking and not on
State intervention (89).

(144) Finally, according to settled case-law (90), a refusal to
supply also constitutes an abuse when it leads to the
risk of elimination of competition on the part of the
requesting undertaking in the
relevant market or
hindering competitors' development and when it is not
objectively justified.

(145) FS's refusal

is not

between

for
Basle

to provide traction, an activity which it
routinely performs,
justified by any objective
reason and it protects its monopoly position in the
rail
downstream market
therefore
services
constitutes an abuse of a dominant position. FS's refusal
to provide traction to GVG eliminates a potential
competitor
growth of
competition in the downstream market. This harms
consumers, who will not benefit from alternatives to
existing rail passenger services.

international passenger
and Milan.

thereby

hinders

and

the

It

(146) The infringement took place between December 1998
and 27 June 2003. At least since December 1998, GVG
requested FS to provide traction services for its planned
service on the Domodossola-Milan route. FS did not
make any offer to provide traction until August 2002.
On 25 November 2002, FS (Trenitalia) offered GVG a
including
draft contract for the provision of traction,
back-up,
the
on
planned
Domodossola-Milan route. On 27 June 2003, GVG and
FS (Trenitalia) concluded negotiations by agreeing on
the traction price.

service

for

its

(89) A parallel can be drawn with the situation in the FAG-Flughafen
in which the Commission specified that
Frankfurt Decision,
Frankfurt Airport's obligation to operate the airport properly and
safely did not mean that it was allowed to retain these activities
for itself (see recitals 93-96 of the Decision).

(90) Judgment of the Court of Justice in Joined Cases 6 and 7/73 ICI
and Commercial Solvents [1974] ECR 223 and Commission Decision
88/518/EEC in British Sugar v Napier Brown (see footnote 87).

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2. ABUSE ON THE MARKET IN RAIL PASSENGER
TRANSPORT

2.1. REFUSAL TO NEGOTIATE THE FORMATION OF AN

INTERNATIONAL GROUPING

grouping only if it had a commercial interest in doing
so, it has not provided concrete reasons why it could
not enter into such negotiations. Instead, FS has argued
that its refusal to enter into negotiations with GVG was
justified since GVG's planned service would compete
with services already provided by FS, in particular the
Cisalpino, on the Basle-Milan route (93). To preserve its
monopoly on this route, however, is not an acceptable
justification for FS's refusal.

(147) At the present stage in the liberalisation of the European
rail passenger market, railway undertakings can only
provide cross-border rail passenger services if they have
formed an international grouping with a licensed
railway undertaking established in another Member
State. However,
European
regulatory framework does not preclude the application
of Article 82 of the EC Treaty to situations in which
there is only one railway undertaking available to form
an international grouping and which refuses to enter
into negotiations with a view to the formation of such a
grouping.

existence

this

the

of

(148)

(149)

In its judgment in ENS (91) the Court of First Instance
held that a service may be regarded as ‘necessary' for
entry to the relevant market if such a service is not
‘interchangeable'
special
characteristics — in particular the prohibitive cost of
and/or time reasonably required for reproducing it —
there are no viable alternatives available to potential
competitors, who are therefore excluded from the
market by the refusal to provide such a service.

and if, by reason of

its

indispensable for GVG if

In the present case the formation of an international
grouping with FS is
the
undertaking is to be able to provide the international
passenger transport service on the Domodossola-Milan
route. It is not ‘interchangeable' with any other service
railway
in the
are no other
undertakings with which GVG could enter
into an
international grouping for the purposes of operating
this route (92). As set out in recital 101, neither does the
option exist at this stage for GVG to set up a subsidiary
in Italy with a view to forming an international
grouping with its own subsidiary.

sense

there

that

(150) Therefore, unless

the refusal by FS to enter

into
negotiations with GVG with a view to the formation of
an international grouping is justified on the basis of
objective reasons, it constitutes an abuse of a dominant
position. While FS has pointed out in general that there
is no obligation under EU law to form an international
grouping and that it would enter into an international

(91) See footnote 34.
(92) As the market has not yet been liberalised in Italy, no Italian
railway undertaking other than FS has a licence based on Directive
95/18/EC for long-distance passenger rail transport.

(151) At least since August 1999, FS was aware that GVG
wanted to enter into an international grouping with it
to provide an international service between Basle and
Milan. FS failed to deal with GVG's request until August
2002. On 27 June 2003,
signed an
international grouping agreement.

the parties

(152) The Commission therefore concludes that by refusing to
enter into an international grouping with GVG without
any objective justification, during the period from
August 1999 until 27 June 2003, FS abused its
dominant position on the Italian market for passenger
rail transport.

3. EFFECT ON TRADE BETWEEN MEMBER STATES

(153) GVG aims to provide an international transport service
between Germany and Italy. As pointed out,
it feeds
customers from Karlsruhe, Koblenz and Mannheim into
Basle and then provides a rail passenger
transport
service to Milan. In view of the characteristics of these
routes and the heavy traffic and given that this affects a
transport service between two Member States of the EU,
the abuses described above significantly affect
trade
between Member States.

I. ARTICLE 86(2) OF THE TREATY

(154) FS is not relying on the derogation provided for in

Article 86(2) of the Treaty to justify its policy.

(155)

In particular, FS has not argued that granting access to
GVG on the Domodossola-Milan route would jeopardise

(93) This is acknowledged by FS in its reply to the statement of

objections, points 89 and 107.

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the performance by FS in conditions of economic
equilibrium of a service of general interest entrusted to
it. The Cisalpino service, offered by FS in cooperation
with SBB,
is not operated on the basis of a public
service obligation or a public service contract (94). The
same applies in relation to the trains operated in
cooperation with SBB via Chiasso and Domodossola.
More generally, FS has not argued that granting access
to GVG would jeopardise any public service obligations
it may have in relation to transport services it provides
on the main infrastructure network in Italy. At all
events, the Commission takes the view that there is no
evidence that refusing access to GVG to the market in
international
between
Domodossola and Milan would be necessary to preserve
the financial equilibrium of FS in relation to its basic
services (95).

passenger

transport

rail

J. REMEDIES

1. TERMINATION OF THE INFRINGEMENT

(156) Regulation No 17 applies to the abuses relating to the
markets for access to infrastructure and traction. The
latter lie outside the scope of
the procedural rules
specific to the transport sector and fall under Regulation
No 17 as far as the application of Article 82 of the EC
Treaty is concerned. Regulation (EEC) No 1017/68,
which lays down the competition rules applying to
transport by road, rail and inland waterway, applies to
the abuse relating to the refusal
into an
international grouping on the market for the provision
of passenger rail transport.

to enter

(157) Article 3(1) of Regulation No 17 provides that

the
Commission may, where it
there is an
infringement of Article 81 or 82 of the Treaty, require
associations of undertakings
the undertakings or
concerned to bring such infringement to an end. Article
11 of Regulation (EEC) No 1017/68 contains similar
provisions.

finds

that

the market has been delayed and as part of an overall
settlement between the parties, for a limited period of
time FS (Trenitalia) and FS (RFI) have offered GVG
special conditions to facilitate its market entry. These
terms must be considered to be specific to this case.

(159) The Commission considers that the undertakings given
by FS (Trenitalia) and by FS (RFI), as annexed to this
Decision, ensure that the infringement has been brought
to an end and that the abuse will not be repeated.

service. For a period of

(160) The Commission takes note that, apart from the above
undertakings aimed at solving the particular problem of
GVG, FS (Trenitalia) has in addition undertaken to enter
into international grouping agreements with other
railway undertakings that possess the necessary licence
and propose a reasonable project for an international
five years, FS has
rail
undertaken
a
non-discriminatory basis to other railway undertakings
intending to provide cross-border passenger services.
The available capacity, as defined in the commitments,
would allow new entrants to operate up to seven
international railway services into Italy similar to the
one planned by GVG. The traction price would be based
on FS (Trenitalia)'s cost, including, inter alia, an adequate
return on the capital
investment and the maintenance
costs for the rolling stock concerned.

traction

services

provide

on

to

(161) While these general undertakings go beyond what

services

into the market

facilitate
rail passenger

is
necessary for the termination of the infringements as
regards GVG, the Commission considers that they will
considerably
in
entry
into Italy. The
international
commitments eliminate the most
significant market
access barriers for start-up companies in this market.
New entrants will be able to obtain in a timely manner
all necessary information as regards train paths, they
will be able to enter into an international grouping and
they will obtain the necessary traction services to start
services. The undertakings given by FS will
their
therefore allow market entry in a startup phase which
should contribute to enhancing competition in the
European rail sector.

(158) FS (Trenitalia) has entered into an international grouping
agreement and has agreed on the terms of a traction
contract with GVG. FS (RFI) has also undertaken to
provide GVG with suitable
train paths on the
Domodossola-Milan segment, as soon as corresponding
train paths are made available by SBB on the Swiss
network for
the Basle-Domodossola segment. The
Commission takes note that, given that GVG's entry into

(94) See footnote 12.
(95) See Commission Decision 90/456/EEC of 1 August 1990
concerning the provision in Spain of international express courier
services (OJ L 233, 28.8.1990, p. 19).

2. ARTICLE 15 OF REGULATION NO 17 AND ARTICLE 22
OF REGULATION (EEC) NO 1017/68

(162) Article 15(2) of Regulation No 17 provides,

inter alia,
that
the Commission may impose fines, within the
limits set out in that Article, where the undertakings in
question have intentionally or negligently infringed
Article 82. Article 22(2) of Regulation (EEC) No
1017/68 confers equivalent powers on the Commission.

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the refusal

in particular

(163) FS must have been aware of the fact that the behaviour
in this case,
to provide
information regarding access to the network, prevented
relevant
a
downstream market. An
the
of
the present one would
such as
competition rules
normally be penalised by fines varying in accordance
with the gravity and duration of the infringement.

the
infringement

from entering

potential

entrant

(164) However, in this case the Commission is refraining from
imposing a fine in particular because of the novelty of
the case, as GVG has been the first and only new
entrant railway undertaking to approach FS with a view
to forming an international grouping. Moreover, FS has
proposed undertakings which ensure that FS will not
the abuses in the future and which should
repeat
contribute significantly to the dismantling of entry
barriers for international rail passenger services into
Italy.

K. ADDRESSEE

(165) As set out in recitals 72 to 81, the FS holding company
can be considered responsible as a single undertaking.
The Decision is therefore addressed to the FS holding
company,

HAS ADOPTED THIS DECISION:

Article 1

By refusing to enter into an international grouping with Georg
Verkehrsorganisation GmbH, for the purposes of providing an
international rail passenger service between Germany and Italy
on the Domodossola-Milan route, Ferrovie dello Stato SpA has
abused its dominant position on the Italian market
for
in breach of Article 82 of the EC
passenger rail transport,
Treaty.

This infringement lasted at least from August 1999 until 27
June 2003.

Article 2

By refusing to deal effectively with Georg Verkehrsorganisation
GmbH's requests for access to the railway network between
Domodossola and Milan for the said purposes, Ferrovie dello
Stato SpA has abused its dominant position on the market for
access to the infrastructure, preventing GVG from entering the
market in international rail passenger transport in breach of
Article 82 of the EC Treaty.

This infringement lasted at least from September 1995 until 24
July 2002.

Article 3

By refusing to provide traction to Georg Verkehrsorganisation
GmbH in the form of a locomotive, a qualified driver with
route knowledge and back-up for the said purposes, Ferrovie
dello Stato SpA has abused its dominant position on the
traction market, preventing GVG from entering the market in
international rail passenger transport in breach of Article 82
of the EC Treaty.

This infringement lasted at least from December 1998 until 27
June 2003.

Article 4

Ferrovie dello Stato SpA shall immediately bring to an end the
this
infringements referred to in Articles 1, 2 and 3 of
Decision in so far it has not already done so and shall
in
future refrain from repeating any similar act or conduct.

Article 5

Until given notice by the Commission that it is no longer
required to do so, Ferrovie dello Stato SpA shall report twice a
year
the
to the Commission on the implementation of
commitments annexed to this Decision.

Article 6

This Decision is addressed to:

Ferrovie dello Stato SpA
Piazza della Croce Rossa, 1
I-00161 Rome

This Decision shall be enforceable pursuant to Article 256 of
the EC Treaty.

Done at Brussels, 27 August 2003.

For the Commission

Mario MONTI

Member of the Commission