The French Competition Authority considers the competitive impact of the SNCF new model for rail stations management
The French competition regulator, the Autorité de la Concurrence (AdC), has decided to examine and give an opinion on the decision of SNCF, the French incumbent railway undertaking, to reorganize its rail stations management business ( AdC, decision 09-SOA, Saisine d’office pour avis du 18 mai 2009 relatif à une saisine d'office pour avis dans le secteur du transport public terrestre de voyageurs, http://www.autoritedelaconcurrence.fr/pdf/avis/09soa01.pdf.) The legal basis of the AdC decision can be found in the new Article 462-d of the French code de commerce which empowers the competition regulator to give an opinion on any competition issue and recommend the measures necessary to strengthen the competitive structure of markets.
The SNCF engaged in the reorganization of its business division for rail stations management following a recommendation made in a survey “La gare contemporaine” carried out by the French Parliament. This document deals with which competition rules that apply to rail stations and advocates the idea that the SNCF train operations should be kept separated from the rail stations management. To this end, the SNCF entrusted the management of rail stations to an entity expressly created for this purpose and directly liable to the CEO of the SNCF.
As a result, the AdC started a proceedings to assess the effects of the SNCF decision on competition in the markets for provision of land transport passenger services, with a particular focus on intermodal services. The AdC competition concerns are grounded on the dominant position of the SNCF in the markets for land transport. The SNCF has a monopoly position in the rail transport market, through its subsidiaries it is active in the other land transport passenger markets and it is in control of rail stations. Rail stations can be regarded as essential facilities for the provision of intermodal transport services since it is here where passengers change from one mode of transport to another. In short, the AdC fears that the SNCF may abuse its dominant position a) by refusing or hindering other carriers access to essential inputs for the provision of transport services; b) by leveraging its market power into markets where it is not the dominant operator.
As for the first type of abuse considered, the AdC first intends to set out the fair and non discriminatory conditions according to which carriers should be given real time information on movements of means of transports operating a given intermodal link. The availability of such data is instrumental in enabling the carriers involved in the carrying out of the link to provide a seamless services for passenger. Intuitively, given its dominant position, SNCF is likely to be imposed obligations to share real time data on train operations at a given rail station with other carriers providing links to/from this station. Second, the AdC has also to establish whether the provision of intermodal transport services constitutes a relevant market. If it does so, it is opportune to ascertain whether the rail section of intermodal transport services has such a relevant role that the other carriers cannot but take it into account while planning their transport services.
SNCF is active in the whole chain of intermodal transport, from the rail stations management to the provision of rail and other modes of transport. Thus, the second type of abusive conducts pertains to the likelihood that the SNCF in the provision of the above services may favour its activities at the detriment of competitors. To prevent such risks, the AdC will identify a set of precautionary measures the SNCF should adopt to ensure competition law compliance of its conducts.
In conclusion, the AdC assessment of the competition impact of the entrustment of rail stations management to a newly-created entity is welcomed. It is hoped that the AdC opinion when released may contribute to inject more competition into the French rail sector, still dominated by the incumbent railway undertaking, as indicated by the Rail Liberalization Index 2007, available at http://www.deutschebahn.com/site/shared/en/file__attachements/position__papers/study__rail__liberalisation__index__2007__summary.pdf.
As a result, the AdC started a proceedings to assess the effects of the SNCF decision on competition in the markets for provision of land transport passenger services, with a particular focus on intermodal services. The AdC competition concerns are grounded on the dominant position of the SNCF in the markets for land transport. The SNCF has a monopoly position in the rail transport market, through its subsidiaries it is active in the other land transport passenger markets and it is in control of rail stations. Rail stations can be regarded as essential facilities for the provision of intermodal transport services since it is here where passengers change from one mode of transport to another. In short, the AdC fears that the SNCF may abuse its dominant position a) by refusing or hindering other carriers access to essential inputs for the provision of transport services; b) by leveraging its market power into markets where it is not the dominant operator.
As for the first type of abuse considered, the AdC first intends to set out the fair and non discriminatory conditions according to which carriers should be given real time information on movements of means of transports operating a given intermodal link. The availability of such data is instrumental in enabling the carriers involved in the carrying out of the link to provide a seamless services for passenger. Intuitively, given its dominant position, SNCF is likely to be imposed obligations to share real time data on train operations at a given rail station with other carriers providing links to/from this station. Second, the AdC has also to establish whether the provision of intermodal transport services constitutes a relevant market. If it does so, it is opportune to ascertain whether the rail section of intermodal transport services has such a relevant role that the other carriers cannot but take it into account while planning their transport services.
SNCF is active in the whole chain of intermodal transport, from the rail stations management to the provision of rail and other modes of transport. Thus, the second type of abusive conducts pertains to the likelihood that the SNCF in the provision of the above services may favour its activities at the detriment of competitors. To prevent such risks, the AdC will identify a set of precautionary measures the SNCF should adopt to ensure competition law compliance of its conducts.
In conclusion, the AdC assessment of the competition impact of the entrustment of rail stations management to a newly-created entity is welcomed. It is hoped that the AdC opinion when released may contribute to inject more competition into the French rail sector, still dominated by the incumbent railway undertaking, as indicated by the Rail Liberalization Index 2007, available at http://www.deutschebahn.com/site/shared/en/file__attachements/position__papers/study__rail__liberalisation__index__2007__summary.pdf.
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