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EU suspects Lithuanian Railways of having limited competition

The European Commission has informed the Lithuanian railway incumbent AB Lietuvos geležinkeliai (“LG”) that it suspects the company of having limited competition on the rail markets in Lithuania and Latvia by removing a railway track connecting the two countries.

Such behaviour, if established, would breach EU antitrust rules that prohibit the abuse of dominant market positions. The removal of this track may have prevented customers from using the services of other rail operators for the transport of freight between Lithuania and Latvia. The sending of a statement of objections does not prejudge the outcome of the investigation.

In September 2008, LG suspended traffic on a railway track running between Lithuania and Latvia. One month later LG dismantled the track. Since then the track has not been rebuilt. The Commission is concerned that these actions could have limited competition on the rail markets in Lithuania and in Latvia, in particular by obstructing the plans of a major customer of LG from redirecting its railway freight to Latvia using the services of other rail operators.

Following a complaint, the Commission carried out inspections at the premises of LG in 2011 and opened formal antitrust proceedings in March 2013.

A statement of objections is a formal step in Commission investigations into suspected violations of EU rules on restrictive business practices. The Commission informs the parties concerned in writing of the objections raised against them and the companies can examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.

If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company’s annual worldwide turnover.

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