Lithuania fined over missing Latvia rail link

The European Commission said October 2 it had fined Lithuanian Railways (Lietuvos geležinkeliai) €27 873 000 for hindering competition in the rail freight market, in breach of EU antitrust rules, by removing a rail track connecting Lithuania and Latvia.

Commissioner Margrethe Vestager, in charge of competition policy said in a news release from Brussels:

"Lithuanian Railways used its control over the national rail infrastructure to penalise competitors in the rail transport sector. The European Union needs a well-functioning rail freight market. It is unacceptable and unprecedented that a company dismantles a public rail infrastructure to protect itself from competition."

Lithuanian Railways is the incumbent state-owned rail company in Lithuania. The company is responsible for both railway infrastructure and rail transport.

AB Orlen Lietuva ("Orlen") is a fully owned subsidiary of PKN Orlen, a Polish oil company which is a major commercial customer of Lithuanian Railways.

In 2008, Orlen considered redirecting its freight from Lithuania to Latvia by using the services of another rail operator. In October 2008, Lithuanian Railways dismantled a 19km long section of track connecting Lithuania and Latvia, close to Orlen's refinery. The removal of the track meant that Orlen would need to use a much longer and more costly route to reach Latvia. Since then the dismantled track has not been rebuilt.

Lithuanian railways missing track

The Commission's investigation found that these actions hindered competition on the rail freight market by preventing a major customer of Lithuanian Railways from using the services of another rail operator. Lithuanian Railways failed to show any objective justification for the removal of the track. Such behavior was found to be in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) which prohibits the abuse of a dominant market position.

In addition to imposing a fine, the Commission's Decision requires Lithuanian Railways to bring the infringement to an end and refrain from any measure that has the same or an equivalent object or effect: in other words, to rebuild the link to Latvia. 

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