No C 17/8 Official Journal of the European Communities 21. 1. 89

Notice pursuant to Article 12 (2) of Council Regulation (EEC) No 4056/86 concerning Case No IV/32.385 Sealink — SNCF (89/C 17/04)

1. On 2 July 1987 Sealink UK Limited (SUKL) and — the sharing revenue according to trips operated Societe Nationale des Chemins de Fer Francais (SNCF) (with the exception of that from certain submitted to the Commission under Article 12 (2) of on-board services), Regulation (EEC) No 4056/86 an application for exemption under Article 85 (3) of the EEC Treaty of the agreements referred to below. — the defraying by each of the parties of its operating costs with the exception of adver­ tising expenditure, which is shared equally. THE PARTIES The agreement also provides that: 2. A member of the Sea Containers Limited group since 1984, SUKL, whose headquarters are in London, specializes in the transport of passengers and freight to each of the parties represents the pool in its and from the United Kingdom. own country for the purpose of selling tickets,

SNCF through Service de l'Armement Naval, conducts each of the parties remains free to operate the business of shipping passengers and freight between independently other cross-channel routes France and the United Kingdom. (Newhaven—Dieppe in the case of SNCF and Weymouth—Cherbourg in that of SUKL) on Both parties belong (together with the Dutch company condition that they do not try to divert traffic Stoomvaart Maatschappij Zeeland) to the Sealink to these routes at the expense of the pooled Consortium and have concluded a number of route, commercial arrangements in this connection. — SUKL undertakes to ensure that the capacity offered by Hoverspeed (a hovercraft operator THE AGREEMENTS which is part of the Sea Containers Group) does not exceed by more than a predetermined 3. The agreements concluded between the parties margin the level attained in 1985, apply to the following sea routes: Calais—Dover; Boulogne—Folkestone; Dover—Dunkirk; Dover— Zeebrugge (this route ceased being operated on 12 the parties will refrain from setting up, for September 1' their own account, routes which compete directly with that operated jointly.

3.1. Calais—Dover The agreement of 16 December 1987 renews the earlier agreement for a further period of one year This route is covered by the agreements of 7 without substantial amendment. November 1986 and 16 December 1987.

The agreement of 7 November 1986, which is Another agreement was concluded on 26 May applicable for one year from 1 January 1987, 1988 with a view to the operation of a fifth vessel provides for: on the Calais—Dover route between 27 May and 24 September 1988. This vessel, which carried — the joint operation of four vessels for passengers mainly, was leased by SNCF from passengers and vehicles (two SNCF vessels and SUKL, the costs and receipts allocated on the two Sealink vessels) on the basis of an approxi­ Calais—Dover route being shared equally. mately equal number of crossings for both contracting parties, the total number of which must not exceed the number of crossings made 3.2. Boulogne—Folkestone in 1986, The agreements of 7 November 1986 and 15 — the joint fixing of the tariffs applicable to December 1987 (applicable to 1987 and 1988 passengers. The tariffs are published. Special respectively) provide that: tariffs are, however, negotiated by each of the parties, on the basis of jointly determined criteria, with the principal shippers, — SUKL operates this route, 21. 1. 89 Official Journal of the European Communities No C 17/9

— the profit or loss from this route (after depre­ 3.3.2. Agreement of 21 October 1987 ciation, financial charges and part of the overheads) is shared equally between SUKL This agreement specifies the conditions for and SNCF. However, SNCF shares in the operation of the third (Ro-Ro) vessel, whose profits and is liable for any losses only up to a commissioning by SUKL was envisaged in the predetermined amount, agreement of 24 April 1986 (see above); these conditions are extended to the operation, again by — the annual budget for this route, the schedule SUKL, of a fourth vessel. Under the agreement, of crossings and the timetables are fixed after each of these two vessels provides a daily (return) consultations between the parties. service between Dover and Dunkirk and, for the account of SUKL but with a limited sharing by SNCF in the profits or losses from the route, a In addition, the agreement of 26 May 1988 second daily (return) service between Dover and referred to at 3.1 above provides that the fifth Zeebrugge. The agreement also specifies the vessel operated from 27 May to 24 September circumstances in which SUKL may, in the event of 1988 by SNCF on the Dover—Calais route will be an excessively loss-making operation of the used at night to carry freight between Boulogne Dover—Dunkirk route, have to cover a higher and Folkestone, the receipts and costs generated proportion of the losses than SNCF. Other clauses by this ship on this route being included in the provide for the payment of compensation to account of the route. SNCF in the event of a diversion of traffic to the Dover—Zeebrugge route.

3.3. Dover—Dunkirk / Dover—Zeebrugge 3.3.3. Agreement of 10 December 1986 These routes are governed by an agreement dated 10 December 1986 and applicable for a period of This agreement entered into force on 8 May 1988, ten years from the date of commissioning by the date of commissioning by SNCF on the SNCF of a large-capacity vessel. Dover—Dunkirk route of a new large-capacity vessel. The introduction of this vessel led to the withdrawal of the two SNCF vessels previously Pending such commissioning (which took place in operated on this route, and of the two SUKL May 1988), these routes were operated in vessels (one of which is assigned exclusively to the accordance with the terms of the agreements of 24 Dover—Zeebrugge run). April 1986 and 21 October 1987.

The agreement of 10 December 1986 lays down 3.3.1. Agreement of 24 April 1986 the conditions of operation of the one vessel now assigned by the two parties to the Dover— Dunkirk route. These conditions are basically as This agreement provides for operation of the follows: Dover—Dunkirk route along the following lines:

— the vessel does three return trips a day from — the operation by SNCF of two vessels (train Monday to Saturday; after consultations with ferries), of which one, owned by SUKL, is SUKL, this may be increased to four return leased by SNCF, trips a day,

— provided, in the opinion of both parties, it is — variable receipts and costs are shared equally; commercially justified, the commissioning by however, the transport of railway wagons SUKL of a third (Ro-Ro) vessel, continues to be effected by SNCF acting for its own account. SUKL helps cover the fixed costs — submission to SUKL of the sailing times of involved in running the vessel, SNCF ferries and joint fixing of the times of the SUKL vessel, — freight tariffs are, however, negotiated by each of the parties, on the basis of jointly determined criteria, with road hauliers; the — equal sharing of the costs and receipts tariffs applicable to the transport of railway resulting from operation of the route; this wagons are negotiated freely by SNCF with sharing does not apply, however, to the the railway companies. transport of railway carriages and trucks, which is effected by SNCF for its own account, nor to the transport of new motor The agreement also specifies the terms on which vehicles (up to a ceiling of 17 000 vehicles a Sealink Harbours Limited, an SUKL subsidiary, year, anything over that being pooled). places at the disposal of the vessel suitable port No C 17/10 Official Journal of the European Communities 21. 1. 89

facilities at Dover and those on which SUKL — Immingham—Rotterdam provides certain services in the ports of Dover and — Immingham—Zeebrugge Dunkirk. — Great Yarmouth—Scheveningen The agreement is of 10 years' duration. — Felixstowe—Rotterdam — Felixstowe—Zeebrugge 4. According to the parties, the abovementioned — Felixstowe—Ostend agreements have the effect of restricting their freedom: — Harwich—Rotterdam — Harwich—Antwerp — to replace, without the other party's agreement, the — Ipswich—Rotterdam vessels serving the routes in question with other vessels or to alter sailing times, — Sheerness—Vlissingen — Chatham—Zeebrugge — to operate competing routes with a view to diverting — Dartford—Zeebrugge traffic from the jointly operated routes, — Plymouth—Roscoff

— to fix, or agree independently on, tariffs, Lastly, the parties point out that their services have to compete to some extent (and in their view increasingly) — to lay down independently conditions of carriage. with those offered by airlines.

THE MARKET EXEMPTION

5. The parties stress the complexity of the market on 6. The parties acknowledge that the agreements they which they operate. They maintain, moreover, that the have concluded affect trade between Member States. sea crossings between the United Kingdom on the one They consider, however, that the agreements qualify for hand and France, Belgium and the Netherlands on the exemption under Article 85 (3). other are, albeit to differing degrees, mutually inter­ changeable. The ports in the latter three Member States 6.1. In the parties' opinion, the agreements contribute to serve the same geographical area including other improving the production or distribution of goods or to Member States such as the Federal Republic of Germany promoting technical or economic progress as: and Italy. The parties consider more specifically that they are in direct competition with the following routes operated by other companies: 6.1.1. on the Dover—Calais route:

— Ramsgate—Dunkirk (i) they ensure a regular and reliable service with — Ramsgate—Ostend frequent crossings in a market characterized — Dover—Zeebrugge by strongly fluctuating demand; — Dover—Ostend (ii) they avoid having to duplicate investments; — Dover—Calais

— Dover—Boulogne (iii) in the case of tourist traffic, they make it — Newhaven—Dieppe possible to offer a wide range of combined products and more extensive ticket-selling — Portsmouth—Le Havre facilities; — Portsmouth—Cherbourg — Portsmouth—Saint Malo (iv) they facilitate the link with rail service, SUKL — Portsmouth—Caen and SNCF and BR selling combined rail/ sea/rail tickets. — Poole—Cherbourg

6.1.2. on the Dover—Dunkirk route (freight transport): The parties consider, moreover, that the following routes operated by other companies are also, although to a lesser degree, in competition with the routes they operate (i) the freight transport service permits an jointly: optimum utilization of port facilities. This has made it possible to conclude agreements with — Hull—Rotterdam the Dover and Dunkirk port authorities and — Hull—Zeebrugge to modernize their facilities; 21. 1. 89 Official Journal of the European Communities No C 17/11

(ii) this rationalization of a service whose (ii) the tariffs published for passengers and cars long-term stability is guaranteed safeguards must be identical to prevent any confusion on jobs both in France and in Great Britain; the part of users; the same goes for the conditions of carriage; (iii) the existence of an exclusive freight transport service makes it possible to effect crossings at (iii) separate commercial and advertising policies any time (including at night) without being would be a source of needless expense and of bound by the timetable constraints of confusion for consumers. passenger transport; this service also enables dangerous substances to be carried, which 6.4. The agreements do not, so the parties say, eliminate could not be carried on multi-purpose vessels. competition in respect of a substantial part of the services in question. 6.2. The parties maintain that the agreements allow consumers a fair share of the resulting benefit as: On both the Dover—Calais service and the Dunkirk—Dover and Dover—Zeebrugge routes: 6.2.1. on the Dover—Calais route: (i) the parties face strong competition from other (i) consumers benefit from the regularity, relia­ shipping lines and from airlines (see point 5); bility and frequency of the service; (ii) the opening of the Channel Tunnel will result (ii) the cooperation between the parties helps in considerable over-capacity on the relevant reduce costs, which is reflected in fares; it market which can be absorbed only by colla­ also makes it possible to expand the facilities boration between companies; available to consumers for making reser­ vations and purchasing tickets; (iii) the transferability of vessels (from one market to another) subjects the parties to strong (iii) the combined rail/sea/rail services, operated competitive pressure; within the framework of the European Conference, benefit consumers; (iv) the combined rail/sea market, on which the parties are relatively well placed, is (iv) the relative stability and profitability of the unprofitable and in decline. operation enable the parties to invest in a better quality service for users; 7. This notice is issued pursuant to the procedure established by Article 12 of Regulation No 4056/86, the 6.2.2. on the Dover—Dunkirk and Dover—Zeebrugge Commission having determined that the arrangement in routes: same reasons as those outlined above, and question meets the tests of Article 85 (1) of the Treaty. in particular the regularity of the service and its The Commission has not, at this stage, formed any view improvement thanks to the acquisition of new on the applicability of Article 85 (3) of the Treaty to the vessels (made possible as a result of the arrangement. In accordance with Article 12 (2) of Regu­ cooperation between the parties). lation No 4056/86, the Commission invites interested parties to send their comments within thirty days from 6.3. All the restrictions imposed on the parties by the agreements are, it is claimed, indispensable to the the date of publication of this notice, quoting reference attainment of the objectives referred to at 6.1 above as: IV/32.385, to: (i) bringing capacity into line with demand pre­ Commission of the European Communities, supposes an agreement between the parties; Directorate-General for Competition, there can be no such agreement unless each Directorate 'Restrictive practices, abuse of dominant of the parties refrains from any attempt to positions and other distortions of competition IIP, divert traffic from routes operated jointly to 200, rue de la Loi, those which it operates on its own account; B-1049 Brussels.