Article 102 TFUE - étude de cas

Correction

*THIS IS A REDACTED ANSWER, TO DEVELOP IF YOU HAVE TIME, MOST OF THE TIME, YOU DON’T *

*I TRIED TO PRESENT MY ANSWER IN A WAY THAT SEEMED LOGICAL, JUST KNOW THAT YOU CAN CHANGE THE ORDER OF THE ANSWER, AS LONG AS YOUR ANSWER IS COMPLETE*

The issue is whether the refusal by the company owning the only high-speed rail tunnel connecting France and Italy to grant access to a competing railway company constitutes an infringement of European competition law.

First, the competition rules laid down in the Treaty on the Functioning of the European Union (TFEU) apply to undertakings (1) whose conduct must be assessed on a relevant market (2). It is therefore necessary to identify the existence of one or more undertakings. An undertaking is defined as any entity engaged in an economic activity, regardless of its legal status or method of financing (ECJ, 1991, Höfner). An economic activity consists in offering goods or services on a given market (ECJ, 1998, Commission v. Italy).

In this case, the company operating and managing the rail tunnel provides transport services between France and Italy and manages rail infrastructure. It therefore qualifies as an undertaking within the meaning of European Competition law.

Second, under Article 102 TFEU, any abuse by an undertaking of a dominant position (3) within the internal market is prohibited. A dominant position refers to a position of economic strength enabling an undertaking to prevent effective competition by allowing it to behave independently of competitors, customers, and consumers (ECJ, 1979, Hoffman La Roche).

Here, the company owns and controls the only high-speed rail tunnel connecting France and Italy and is currently the only provider of such services. It therefore enjoys a monopoly and thus, holds a dominant position on the relevant market.

Third, Article 102 TFEU only prohibits the abuse of a dominant position (4). Historically, the ECJ considered that dominant firms may refuse to deal with competitors, except in specific circumstances. Under the essential facilities doctrine developed by the ECJ, in Bronner, a refusal to supply may be abusive where (i) the infrastructure is indispensable, (ii) the refusal is likely to eliminate effective competition, and (iii) there is no objective justification.

In this case, the company refuses access to the only high-speed rail tunnel between France and Italy. As this is the only railway connection between the two member states, competitors cannot operate without access, which makes the infrastructure indispensable. The refusal is therefore likely to eliminate all competition on the relevant market. In addition, the refusal restricts competition by preventing market entry and limiting consumer choice, which may result in higher prices and reduced innovation. Moreover, the facts indicate that granting access would not impede the company’s activity, suggesting that no objective justification exists. Consequently, the refusal constitutes an abuse of a dominant position.

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