Lithuanian Railways (Lietuvos geležinkeliai) has been fined €28m by the European Commission for violating the European Union’s antitrust rules.
“Lithuanian Railways used its control over the national rail infrastructure to penalise competitors in the rail transport sector,” said Commissioner Margrethe Vestager, in charge of competition policy. “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.”
According to a European Commission press release, Lithuanian Railways, which is responsible for both railway infrastructure and rail transport, tried to block competition on the rail freight market by removing a rail track connecting Lithuania and Latvia.
Specifically, AB Orlen Lietuva, a fully-owned subsidiary of Polish PKN Orlen, was 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 response, 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 route to reach Latvia. Since then the dismantled track has not been rebuilt.
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.
This is 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.