In Lukoil I, the Bulgarian competition authority alleged that Lukoil had abused its dominant position by refusing third parties access to its oil transport and storage facilities in Bulgaria. As part of a privatisation process, Lukoil had acquired state-built infrastructure and obtained a service concession in respect of other such infrastructure. Since the Bulgarian State retains a golden share in Lukoil, Lukoil must obtain the State’s consent and satisfy certain conditions if it wants to refuse access to its infrastructure.
The key question before the ECJ was whether a refusal by Lukoil to grant competitors access to its infrastructure could qualify as an abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU). This is governed by the ‘Bronner’ criteria of the ECJ. In the Bronner judgment, the ECJ held that a refusal of access to essential infrastructure can only qualify as an abuse of a dominant position if (i) the infrastructure is indispensable for companies seeking access, (ii) the refusal is likely to eliminate all competition in the market and (iii) the refusal lacked objective justification. In the Android Auto judgment, the ECJ clarified that these criteria apply where the company developed the essential facility for its own business and owns it.
In Lukoil the ECJ was asked, in essence, whether these criteria also apply if the essential facility was developed by public authorities and subsequently acquired or operated under a service concession by the company concerned.
The ECJ found that these criteria also apply if the essential facility was created by public authorities or public funds, provided that the dominant company owns the infrastructure and acquired the infrastructure (or the exclusive right to exploit it) under competitive conditions. Such a situation is equated with one in which the dominant company developed the infrastructure itself. A company is considered to own the infrastructure if it has decision-making autonomy regarding the infrastructure. This can result from property ownership or other exclusive rights conferring on the company control regarding access to the infrastructure. A company does not own infrastructure for the purpose of the Court’s test if its decision-making autonomy is limited by prerogatives or obligations, imposed by legislation, regulations or contracts, which prohibit the company from refusing access to the infrastructure.
In the past several years, the ECJ has limited the scope for applying the Bronner criteria. For example, these criteria have been held inapplicable in respect of online platforms (Android Auto), when access to infrastructure is regulated (Slovak Telekom), and when infrastructure is financed not by the dominant company but through public funds (Lithuanian Railways). However, in Lukoil I the ECJ clarified that the Bronner criteria remain relevant where a dominant company controls infrastructure. These criteria are important for protecting investment incentives and they safeguard a dominant company’s fundamental rights, including property rights and freedom to conduct a business.