European Court clarifies 'rules of the road'​ (or rails) in litigating abuse of dominance claims in regulated sectors

In its ruling of 27 October in DB Station & Service AG v. ODEG Ostdeutsche Eisenbahn GmbH the European Court of Justice has clarified the appropriate 'choreography' to be applied by national courts and economic regulators when both have competence in relation to competition law claims.

31st October 2022

Background

The request to the ECJ for a preliminary ruling in this case concerned the interpretation of Article 102 TFEU and provisions of Directive 2001/14/EC (the Directive) on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure. 

The Directive provides that such charges must, amongst other things, be non-discriminatory and also that the levying of charges is to be subject to review by an independent regulatory body established in each Member State. Article 30(2) of the Directive provides that an applicant for use of the relevant infrastructure should have a right to appeal to the regulatory body if it believes that it has been unfairly treated, discriminated against or is in any other way aggrieved, and in particular against decisions adopted by the infrastructure manager concerning, among other things, access charges.

The reference arose in proceedings between DB Station & Service AG (DBSS) (a subsidiary of Deutsche Bahn AG) and ODEG Ostdeutsche Eisenbahn GmbH (ODEG) concerning the amount of the charges to be paid by ODEG for the use of the stations operated by DBSS.

The conditions of use for DBSS stations are laid down in framework contracts which conclude with railway undertakings such as ODEG. The charges payable under such contracts are determined on the basis of a scale established by DBSS. The dispute in this case related to the charges levied under the scale introduced in 2005, known as SPS 05. 

In 2009 the Federal Network Agency (FNA) (the German agency tasked with reviewing railway infrastructure charges under the Directive and hearing Article 30(2) appeals) declared SPS 05 invalid but maintained its effects until 1 May 2010 so that a new scale of charges could be applied from that date. The FNA also invited complainants to bring proceedings before the civil courts in order to obtain reimbursement of the additional amounts already paid in the 2006-10 period. 

ODEG raised an action in the German civil courts for reimbursement of the 2006-10 charges it had paid under SPS 05 in so far as they exceeded the (lower) charges payable under the previous DBSS charges scale on the basis that the imposition of those charges amounted, among other things, to an abuse by DBSS of its dominant position contrary to Article 102 TFEU. 

In the meantime, following a request for a preliminary ruling and in the context of a similar dispute before the civil courts, the ECJ ruled in 2017, in the judgment in CTL Logistics, that a review of the fairness of railway infrastructure charges by the ordinary courts cannot be carried out independently of the monitoring carried out by the competent regulatory body, in so far as monitoring of the calculation methods and the amount of the charges under the Directive lie within the exclusive competences of the regulatory body.

Following that judgment, claims for reimbursement for the 2006-10 charges were again lodged with the FNA, but in a decision of 2019, it rejected those claims as inadmissible (a decision still under appeal at the time of the present ECJ reference) on the basis that national law did not permit it to rule on those claims.

In 2020, the civil court dealing with the ODEG claim for reimbursement referred further questions to the ECJ, asking in essence whether, and if so, in what circumstances, the civil courts may review the amount of access charges (such as those levied by DBSS in 2006-10 period) by reference to Article 102 TFEU. As the Advocate General put it in her opinion, the case concerned, the clash between, on the one hand, the CTL Logistics ruling regarding the exclusive competence of the regulatory body and, on the other hand, the doctrine of the direct effect of Article 102 TFEU and the role of the courts in enforcing that Article.

Judgment

The ECJ noted that the remedy provided for in Article 30(2) of the Directive makes it possible to ensure compliance with Article 102 TFEU prohibiting the abuse of a dominant position. According to the ECJ, it follows from the very objectives of the Directive (which are to ensure non-discriminatory access to infrastructure under conditions of fair competition and from the relevant duties imposed on infrastructure managers), that users should be able to allege, before the regulatory body, an infringement of Article 102 TFEU.

Consequently, the ECJ found that, when exercising its Article 30(2) jurisdiction, the competent national regulatory body cannot validly deny its competence to deal with an alleged infringement of Article 102 TFEU (notwithstanding any inconsistent provision of national law, which does not allow it to rule on the legality of infrastructure charges already levied).

At the same time, the ECJ held that, in order to preserve the full effectiveness of Article 102 TFEU (and, in particular, to ensure that users are effectively protected against the harmful consequences of an infringement of competition law), the exclusive jurisdiction conferred on the regulatory body by Article 30(2) cannot prevent the competent national courts from hearing claims for reimbursement of an alleged overpayment of infrastructure charges. Based on Article 102 TFEU.

Having said that, the ECJ held that this in no way precludes (having regard to the requirements of coherent management of the rail network), the preservation of the exclusive competence of the regulatory body to hear all aspects of disputes brought before it pursuant to Article 30(2). 

Thus, where a user seeks to obtain, on the basis of Article 102 TFEU, reimbursement of an alleged overpayment of infrastructure charges, it must, before bringing any action before the competent national courts, refer the question of their legality to the national regulatory body. 

For their part, national courts dealing with claims for reimbursement are under an obligation to cooperate in good faith with the national regulatory bodies. It follows that, even if those courts are not bound by the decisions of those bodies, they are required to take them into consideration (without being required to await the outcome of judicial review of such decisions), in particular as regards the application of the relevant sector-specific legislation.