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Council of the Antimonopoly Office upheld the 10-million fine for Cargo

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On 5 November, 2014 the Council of the Antimonopoly Office of the Slovak Republic upheld the fine imposed by the Division of Abuse of Dominant Position and Vertical Agreements on Railway Company Cargo Slovakia, a.s. („Cargo“)in August 2013. The Office imposed the fine in the amount of EUR 10 253 662 because the dominant company Cargo restricted sale and lease of electric locomotives and refuelling of diesel locomotives to competing private carriers and thus abused its dominant position pursuant to the Article 8 of the Act on Protection of Competition and Article 102 of Treaty on the Functioning of the European Union. The anti-competitive conduct occurred between 2005 and 2010.

In the assessed period Cargo held a dominant position in the freight rail transport market, where also other private carries operated. To provide their services on the Slovak market, they needed diesel or electric locomotives as an inevitable basic device. Electric locomotives are more cost effective, but those capable to operation in Slovakia were predominantly owned by Cargo. However, Cargo refused to sell or lease these locomotives to its rivals. Private carriers were forced to increasingly use less effective diesel locomotives. Here the private carriers came across another problem. Diesel locomotives need regular oil refuel and the network of fuel stations were owned by Cargo, which did not allow private carriers to refuel the oil into their diesel locomotives.

Both restrictions, i.e. sale and lease of electric locomotives, as well as refuelling diesel locomotives were part of an overall strategy aimed at foreclosure of competitors from the market and maintaining the dominant position, which was supported by the direct evidence acquired by the Office. Conduct of Cargo impeded private carriers to effectively provide their services, succeed in the market and compete with Cargo.

Decision came into force on 5 December 2014.