Dominant Rail Undertakings under European Competition Policy

Abstract

Abstract: For the last 30 years, railway transport has been in steep decline within the Community. It is argued that such a decline is not inevitable, but it is partly due to regulatory distortions that favour other transport modes. As a result of the delay in liberalisation, railways lose out in comparison to air and road transport where market opening triggered a restructuring process of the industry much earlier. An important step towards more competition has been taken with a new ‘railway package’, which liberalises rail freight transport from 2003 on. This article gives an overview of recent developments in the sector, including the status quo of liberalisation and the recently adopted legislation. Taking into account recent jurisprudence, it then analyses competition policy issues with a focus on obligations that arise for dominant railway companies under Article 82 EC. The article lastly discusses what structural changes are required to deal with structural obstacles to a competitive European railway market. It is argued that a complete separation of infrastructure operation and transport services would be the solution most compatible with the railway directives and Article 86 EC.