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20.2.2.  Competition conditions in EU inland transport services

    For there to be effective freedom to provide services, all transport operators in the Member States had to be placed on an equal footing from the viewpoint of competition conditions, a really difficult requirement. In effect, rail transport systems based on the exploitation of single networks constituted monopolies or oligopolies. Service obligations in the public interest tended to involve the granting of correlative special or exclusive rights. Rail transport operators frequently relied on public finance, including subsidies not compatible with the functioning of the common market.

    After the achievement of customs union [see section 5.1.2], a 1968 Regulation, codified in 2009, endorsed the application of competition rules to the rail, road and inland waterway transport sectors [Regulation 169/2009]. This Regulation in principle forbids, for all three modes of transport, agreements between companies, decisions of association and concerted practices, along with abuse of a dominant position in the common market. Yet, an exemption is granted to agreements which contribute to productivity, along with certain types of agreements, decisions and concerted practices in the field of transport which have as sole object and impact the application of technical improvements or technical cooperation. A Commission Regulation facilitates the presentation of complaints, applications and notifications by natural or legal persons who claim a legitimate interest [Regulation 773/2004, last amended by Regulation 2015/1348].

    However, competition rules alone do not suffice to guarantee free competition in the transport sector. Competition conditions for different modes of transport and for the undertakings of different Member States running the same type of transport services must also be harmonised. The first step in this direction was taken by the Council Decision of May 13, 1965 on the harmonisation of certain provisions affecting competition in transport by rail, road and inland waterway [Decision 65/271]. Under this Decision, the Council agreed to take action in three fields: State intervention, taxation and social regimes in the transport sector. This was a commitment and a clearly defined framework for the common transport policy to eliminate disparities, which could distort competition between modes of transport and between undertakings operating the same mode of transport; but, it needed application provisions in order to work.

    In fact, since the 1980's, many Member States have enacted legislation providing for the award of exclusive rights and public service contracts in at least part of their public transport market, on the basis of transparent and fair competitive award procedures. As a result, trade between Member States has developed significantly and several public service operators are now providing public passenger transport services in more than one Member State. Therefore the European legal framework was updated and a new Regulation on public passenger transport services by rail and by road repealed obsolete regulations [Regulation 1370/2007]. This Regulation lays down the conditions under which competent authorities, when imposing or contracting for public service obligations, compensate public service operators for costs incurred and/or grant exclusive rights in return for the discharge of public service obligations. In keeping with the principle of subsidiarity, competent authorities are free to establish social and qualitative criteria in order to maintain and raise quality standards for public service obligations, for instance with regard to minimal working conditions, passenger rights, the needs of persons with reduced mobility, environmental protection and the security of passengers and employees.

    In the area of fiscal harmonisation, a common VAT system was introduced in the transport sector by the two first Directives of April 1967 and by the sixth Directive of May 17, 1977 [see section 14.2.1]. But the real harmonisation of taxation on road haulage is pursued by means of the Directive on the application by Member States of taxes on certain types of infrastructure requiring heavy goods vehicles to contribute towards the costs they engender through an excise duty on diesel oil, vehicle taxes or tolls and charges for the use of road infrastructure ("Eurovignette") [Directive 1999/62]. The system of charging for the use of road infrastructure is based on the "user pays" principle and hence the "polluter pays" principle [see section 16.2.2], through the variation of tolls taking account of the environmental performance of vehicles. Member States may also maintain or introduce tolls or user charges provided they do not discriminate on the basis of carrier nationality or consignment origin or destination.

    A Regulation aims to harmonise the conditions of competition between modes of inland transport, especially with regard to the road sector, to improve social conditions for employees who are covered by it, as well as to improve general road safety [Regulation 561/2006; last amended by Regulation 2016/799]. It does so mainly by means of the provisions pertaining to maximum driving times per day (9 hours), per week (56 hours) and per period of two consecutive weeks (90 hours), the provision which obliges drivers to take a regular weekly rest period of 45 hours at least once per two consecutive weeks and the provisions which prescribe that under no circumstances should a daily rest period be less than an uninterrupted period of nine hours [See also Directive 2002/15]. To prove that they are actually respecting the social and safety provisions, road hauliers must, in accordance with another Regulation, install and regularly use electronic recording equipment in vehicles ("tachographs") for passenger or goods carriage which are registered in a Member State [Regulation 165/2014, last amended by Regulation 2016/799]. The Member States must organise an adequate and regular inspection system for road transport undertakings [Directive 2006/22, last amended by Regulation 2016/403].

    Several Directives relate as much to road safety as to competition conditions between transport undertakings in different Member States. Thus, a Directive deals with the approximation of the laws of Member States relating to roadworthiness tests for motor vehicles and their trailers [Directive 2014/45]. The growing density of road traffic has meant that all the Member States are up against the same safety problems on the same scale. On the other hand, if the frequency and checking methods of those tests were not harmonised, the immobilisation of vehicles for periodic checks and the costs resulting from these could affect competition conditions in the road haulage sector from Member State to Member State, giving rise to a need for harmonisation of their frequency and standardisation of checking methods.

    With a view to evening out competition between carriers and improving road safety, a Directive provides for the generalised installation and compulsory use of speed limiters on heavy vehicles for the carriage of goods and passengers [Directive 92/6]. For heavy vehicles, speed is limited to 90 km/h and for coaches with a maximum weight in excess of 10 tons, the limit is set at 100 km/h. With regard to the safety of persons, property and the environment, a Directive harmonises across the European Union the safety rules and conditions under which dangerous goods are transported by road, rail and inland waterways [Directive 2008/68, last amended by Decision 2017/695.

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