Chillin'Competition

AG Rantos delivered today his Opinion in the Lithuanian Railways case (see here for Pablo’s comments on the General Court’s Judgment). While the case concerns what Pablo has described as perhaps “the most blatant abuse that the Commission has ever considered“, AG Rantos has managed to use the opportunity to shed some welcome light on some contentious issues.

The Opinion is of particular interest in relation to the interpretation of the Bronner Judgment and the indispensability condition, which has been the subject of much debate, including on this blog. This issue is also relevant to cases where I am acting for clients, so I will stay away from discussing the relevance of this Opinion to those cases.

As you will see, the Opinion is firmly rooted in the established case law of the CJEU and sets out a clear and clean analytical framework:

First, the Opinion observes that it would appear that the Bronner case law applies to situations where there has been a “request” and a consequential “refusal”, either explicit or implicit. At paras. 74-75 the Opinion explains that conduct that “could be perceived as an implicit refusal of access (constructive refusal to supply) (…) ultimately having de facto the same result as an (explicit) refusal of access” must also be analysed under the Bronner framework where its constituent elements share the meaning intended by the judgment in Bronner.

Second, the Opinion (para. 76) confirms, in line with Slovak Telekom and Van der Bergh Foods, that where a case does not involve an obligation to provide access but rather “the provision of services or the sale of products subject to unfair conditions, the Bronner conditions do not apply“.

Third, and this is in my view the key, the Opinion identifies the legal (paras. 64, 81 and 85) and economic (paras. 65, 86) logic that have always justified the application of the Bronner conditions in certain cases:

-The Opinion explains that, from a legal standpoint, the Bronner conditions are necessary in cases where putting an end to the alleged abuse would have the “consequence” of interfering with the dominant undertaking’s freedom to contract and right to property by requiring firms to dispose of an aseet or conclude contracts with person with whom it had opted not do so (paras. 64 and 81, both citing Slovak Telekom).

-For this reason, the Opinion posits that “any intervention, for the purposes of Article 102 TFEU, which consists in imposing on a dominant undertaking a (complete or partial) duty to supply to its competitors may clearly affect that right and should be carefully considered and justified”. AG Rantos explains that “any approach that involves a strict interpretation and application of that judgment would, in [his] eyes, disregard that underlying purpose“. Accordingly, he argues that Bronner “should therefore be the leading judgment, and the rule rather than the exception” (fn. 19).

-At para. 85 the Opinion argues that the Bronner criteria should apply in relation to infrastructure “of which the dominant undertaking is the owner and which, in principle, result from its own investment”; the accompanying footnote (38) distinguishes these scenarios from others where facilities were developed with public funding.

-The Opinion also recalls that, from an economic standpoint, the Bronner conditions are justified by the desire “to promote competition in the long term, in the interests of consumers, by allowing a company to reserve for its own use the facilities that it has developed“, thereby preserving its incentives to innovate and invest (para. 64). At para. 86, the Opinion endorses the view that the pre-existence of a regulatory duty to supply is a relevant factor to consider in as much as it already affects and takes into consideration those incentives.

For these reasons (in my view, the right reasons) AG Rantos’ Opinion proposes to endorse the General Court’s Judgment which, in turn, validated the Commission’s decision.

To be continued…