Action brought on 26 November 2010 - European Commission v Republic of Austria

(Case C-555/10)

Language of the case: German

Parties

Applicant: European Commission (represented by: G. Braun and H. Støvlbæk, Agents)

Defendant: Republic of Austria

Form of order sought

Hold that the Republic of Austria, when implementing the first railway package, failed to comply with its obligations under Article 6(3) of and Annex II to Directive 91/440/EEC in its amended version and Article 4(2) and Article 14(2) of Directive 2001/14/EC;

Order the Republic of Austria to pay the costs.

Pleas in law and main arguments

The Commission is of the opinion that the required independence of the operator of railway infrastructure in Austria has not been properly implemented in national law.

Admittedly the organisation in a common holding of an undertaking which is to carry out essential functions in relation to the operation of railway infrastructure and an undertaking which provides rail transport services, as it exists in Austria, is in principle permissible. It must however be ensured that the undertakings are ascertainably economically independent of each other.

The parent company may in particular not exercise any control over the subsidiary which carries out essential railway infrastructure functions. That is not guaranteed in Austria. The independence of the infrastructure operator is not supervised by any independent agency and there is no effective means of redress for competitors where a particular undertaking receives advantages.

There are also insufficient legislative or contractual rules governing the relationship between the holding company and its subsidiary which carries out essential railway infrastructure functions.

According to the Commission, the manifold entanglements of staff between parent and subsidiary undertakings, for example dual roles in the respective company boards, give rise to doubts as to economic independence. Management personnel of one undertaking should be precluded for several years from taking up management positions in the other undertaking. Moreover, appointments of managers to the body entrusted with essential functions should be made only subject to supervision by an independent agency.

In addition, there should be a physical and personal separation of respective computer systems, in order to ensure the required independence of the undertaking entrusted with essential functions of railway infrastructure operations.

____________