1  Transport includes several modes of activity. Air, rail (Rail Transport), road, inland waterway, maritime transport are covered by the European Union (EU or ‘Union’) transport acquis communautaire. Multimodal or combined transport (Multimodal transport) refers to the combination of two or more different modes of transport. Further differentiation must be made between passengers and freight transport.

2  Transport is a fundamental sector of the global economy. Several dimensions of transport may be identified, including: (i) the international dimension; (ii) the EU dimension; (iii) the intra-state dimension. With regard to the EU dimension, transport services embrace a complex network of more than a million private and public companies, employing more than 10 million people and providing goods and services to citizens and businesses in the EU and its trading partners (SWD (2020) 410 final).

3  The cardinal points of European Union transport policy and law were set out, from the beginning, in the Treaty establishing the European Economic Community (‘Rome Treaty’ or ‘EEC Treaty’) of 1957. The presence of specific provisions on a common transport policy (‘CTP’) may be reasoned by the fundamental role played by this sector and the existence of heavy State intervention at the time of conclusion of EEC Treaty, which rendered the establishment of an internal market in this area difficult. The EU market integration required major changes in the transport industry, which has been subject to fundamental liberalization processes (The Liberalization Process in Transport). Transport also crucially contributes to the free movement of persons within the internal market.

4  Transport is an area of shared competence between the Union and Member States (Article 4 Treaty on the Functioning of the European Union (‘TFEU’)) and subsidiarity principle applies. Transport is currently governed by Title VI (Articles 90–100) of the TFEU, as resulting from 2007 Treaty of Lisbon. The wording of the rules set out in the TFEU are very similar to the provisions of the Rome Treaty and small changes have occurred. However, while the provisions in the Treaties have remained substantially unchanged, the whole economic and legal system in which transport services are established and provided is radically different from how it was designed more than 60 years ago.

5  Article 90 TFEU provides that the objectives of the Treaties must be pursued within the framework of a common transport policy, whereas for its implementation Article 91 states that it is up to the European Parliament and the Council of the European Union (‘Council’) to lay down:

Such rules apply to transport by rail, road, and inland waterway, whereas with regard to sea and air transport the Treaty provides that the European Parliament and the Council may lay down appropriate provisions acting in accordance with the ordinary legislative procedure (Article 100 TFEU).

6  As a matter of fact, in the field of transport—as in many other sectors—a fundamental role has been played by the European Court of Justice (‘Court of Justice’). Main relevant case law includes firstly the Commission of the European Communities v French Republic (French Seamen) judgment (1974). In this landmark decision, the Court affirmed that ‘[s]ince transport is basically a service, it has been found necessary to provide a special system for it, taking into account the special aspects of this branch of activity’ (para 27). According to the Court, far from excluding the application of the Treaty to these matters, Article 84 (current Article 100(2) TFEU) provided only that the special provisions of the Title relating to transport shall not automatically apply to sea and air transport sectors. Whilst under that Article, therefore, sea and air transport was excluded from the rules of the Title relating to the common transport policy, it remained, on the same basis as the other modes of transport, subject to the general rules of the Treaty (paras 31–32). Furthermore, in 1986 in Nouvelles Frontieres, the Court clarified that, as regards transport, there was no provision in the Treaty excluding the application of competition rules or making it subject to a decision by the Council. Therefore, competition rules provided by the Treaty, in particular Articles 85–90 EEC Treaty (now Articles 101–106 TFEU) are to be deemed applicable to transport. According to the Court, as regards air transport in particular, the wording of the Treaty indicated merely to define the scope of the Articles 74 et seq (now Articles 90 et seq TFEU) as regards different modes of transport, by distinguishing between rail, road and inland waterway (covered by the current Article 100(1) TFEU), and sea and air transport (covered by the current Article 100(2) TFEU) (Nouvelles Frontieres, para 43). Therefore, the Court stated that air transport should be considered subject to the general rules of the Treaty, including the competition rules, on the same basis as the other modes of transport (Nouvelles Frontieres, para 45).

7  Subsequently, in 1985 another important ruling of the Court of Justice marked a fundamental step in the development of EU activity in the field of transport. Following a claim of the European Parliament about the failure to act of the Council in relation to the promotion of the transport policy, as required in the Rome Treaty, the Court urged the Council to act, giving rise to the beginning of true efforts to implement a common transport policy in the EU (European Parliament v Council of the European Communities).

8  Since then, the scope of the EU policy in the field of transport has progressively widened, up to the 1992 Maastricht Treaty, which constitutes a crucial point in the implementation of the Single European Market and in the development of the European CTP. It reinforced the political, institutional, and budgetary foundations for transport policy and unanimity was replaced, in principle, by qualified majority. Moreover, it introduced the concept of Trans European Network (‘TEN’), including transport (‘TEN-T’).

9  A fundamental role in this process has been also played by the European Commission (‘Commission’) and its White Papers, in addition to the several communications and activities for which it takes initiative with continuity over the years. With regard to the main White Papers devoted to transport policy, they have been preceded by the 1985 White Paper on ‘Completing the internal market’ (COM (85)310 final), proposing several measures in the transport sector. The 1992 Transport White Paper, entitled ‘The Future Development of the Common Transport Policy’, identified that year as an important turning point in the evolution of the CTP from a policy which aimed essentially at the completion of the internal market through the elimination of artificial regulatory barriers to the provision of services towards a more comprehensive policy. The White Paper advocated the shift towards an integrated, intermodal approach based on the model of ‘sustainable mobility’. It is also worth mentioning a subsequent 1998 White Paper, drawing attention to the significant differences between Member States in charging for transport services, which was leading to distortions of competition in intra-modal and intermodal transport (COM (1998)0466). In 2001, the White Paper entitled ‘European Transport Policy for 2010: Time to decide’ (COM (2001)0370) analysed in depth the transport sector, the goals achieved by the EU, and the existing problems and challenges, and proposed 60 specific measures to be taken at Community level under the transport policy—including measures to revive rail transport, promote sea and inland waterways transport, and foster the interlinking of all model of transport. Among the several aspects treated by the 2001 White Paper, it also focused on the rights and obligations of transport users. After the 2001 White Paper, activity in this field increased once again and the EU adopted legislative measures—such as rail freight market opening—and launched some ambitious technological projects—such as the European satellite navigation System Galileo, the European Rail Traffic Management System (‘ERTMS’), and the Single European Sky Air Traffic Management Research programme (SESAR). In 2011 the Commission released a new White Paper entitled ‘Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system’ (COM (2011)0144), adopting a roadmap of 40 initiatives aimed at building a competitive transport system while dramatically reducing Europe’s dependence on imported oil and cutting carbon emissions in transport by 60% by 2050. Among the objectives, the Commission included the establishment of a Single European Transport Area, as a means to ease the movements of citizens and freight, reduce costs, and enhance the sustainability of European transport. The Commission acknowledged the internal market for rail services as the area with more evident bottlenecks, but also a further integration of the road freight market needs to be improved. Moreover, the establishment of a ‘Blue Belt’ in the seas around Europe aimed at simplifying the formalities for ships travelling between EU ports was announced and a further improvement of market access to ports was deemed as needed. The Commission stressed that market opening should go hand in hand with quality jobs and working conditions, security, and safety, and also announced a further consolidation of passengers’ rights. In 2020 the Commission published the findings of the ex-post evaluation on the 2011 White Paper (SWD (2020) 410 final).

10  Since the last quarter of the 20^th century, the EU has pursued a far-reaching programme of liberalization in respect of several sectors previously monopolized by State-owned, and often vertically integrated, enterprises, including postal services, energy, telecommunications and transport markets.

11  Transport sectors in EU Member States have experienced liberalization and thus the gradual opening-up of the market, although with differences among countries and modes that can be mainly explained by existing divergent starting points. In general, transport sectors share the following levels of supply: (i) the infrastructure level (eg airports, railways, roads, and ports); (ii) the infostructure level concerning information technology and information systems to use the infrastructure (eg air traffic control, signaling systems, etc); (iii) the service level (eg flights, coach services, rail services, road haulage services, etc) (Quinet and Vickerman; Finger and Holvad 6). Among the features that the different transport sectors share, their qualification as network industries has prominent significance. This means that, even if with variations across transport modes, the following features occur: (i) economies of scale and scope; (ii) externalities in production and consumption; (iii) qualification of the services provided as services of general interest (‘SGIs’) (Finger and Holvad 6). Where these characteristics are stronger, such as in air and rail transport, national legal monopolies once typically existed: up to the 1980s, transport operators were generally publicly owned and vertically-integrated and transport services had monopolistic or oligopolistic features, deriving from the fact that in many cases the underlying transport infrastructure constitutes mostly a natural monopoly (Pedret Cuscó 7). Transport, as other network industries, is characterized by several monopolistic bottlenecks. In the cases mentioned above, where the provision of services depends on the use of a monopolistic infrastructure, which cannot feasibly be duplicated, sector-specific regulation is generally set up in order to govern the competitive access and usage of the infrastructure.

12  It is worth mentioning that the access to infrastructures and networks has been object of important case law in the EU, in particular in liberalized sectors where facilities indispensable to the operations of competitors downstream are held by a vertically integrated dominant undertaking. No surprise then that cases in transport sectors have crucially contributed to the development of the essential facility doctrine in the EU (eg Sealink/B&I Holyhead; Sea Containers v Stena Sealink; Port of Rødby; European Night Services (ENS)). Moreover, examples of abuses of monopoly power by State-owned firms may be found in existing case law (eg regarding ports and discriminatory access to them, Merci Convenzionali Porto di Genova SpA v Siderurgica Gabrielli SpA).

13  Turning back to the areas that may be covered by sector specific rules, other aspects of the various transport modes are regulated as well, with regard to, eg, technical standards in the areas of interoperability, safety, environmental issues, passengers’ rights, and public service obligations (‘PSOs’). With regard to multimodal transport, regulation is still nascent as the modal approach has prevailed up to now.

14  Public intervention through regulation typically involves the creation of regulatory bodies. EU secondary legislation in the field of transport mostly requires Member States to entrust national regulatory authorities with different tasks depending on the modes, but sharing the requirement of independence, although the specific definition of it must be found in each relevant legislation. At EU level, while the Commission maintains some regulatory responsibilities (eg for PSOs in air transport, Articles 16–18 Regulation 1008/2008), specific regulatory agencies, whose tasks may vary on the basis of the establishing legislation, have been created for air transport (the European Aviation Safety Agency), rail transport (the European Railway Agency), and for maritime transport (the European Maritime Safety Agency).

15  The application of EU competition rules in the transport sector was problematic since the beginning. Immediately after the entry into force of the Rome Treaty, the question of whether general competition rules could be applied to transport was controversial. Originally, Regulation 17/62 implemented general rules for the enforcement of competition provisions by the Commission, but it was rendered inapplicable to transport by the subsequent Regulation 141/62. The Commission, not having any enforcement power, had to wait for the Council to intervene. Such lacuna was filled in three stages and the competition regime in transport was fragmentated, providing for different rules based on the modes of transport, the type of service, and the agreements involved: (i) Regulation 1017/68 adopted provisions for the application of competition rules to transport by road, rail, and inland waterway; (ii) Regulation 4056/86 laid down provisions for the application of competition rules to maritime transport; and (iii) Regulation 3975/87 dealt with air transport. From a substantive point of view, it is worth clarifying that the application of competition rules did not cover all the subsectors of transport and block exemptions to some transport activities were put in place: Regulation 1017/68 included a block exemption for groups of small- and medium-sized undertakings in the inland transport; Regulation 4056/86 included block exemption to liner conference agreements and practices; Regulation 3975/87 and Regulation 3976/87 included block exemption for a series of agreements in the air transport sector. In addition, such regulations provided for exceptions for technical agreements. From the procedural point of view, the adoption of Regulation 1/2003 and, subsequently, of Regulation 411/2004, in connection with air transport between the Community and third countries, and Regulation 1419/2006, concerning cabotage and international tramp services, has led to the integration of the various transport modes, replacing the former procedural provisions and applying the general legal exception system to transport. With the liberalization process and the legislative changes of the 2000s, most block exemptions have been retrieved. Rules currently in force include: (i) Council Regulation 169/2009, dealing with technical agreements and groups of small- and medium-sized undertakings in the inland transport sector; (ii) Council Regulation 246/2009, authorizing the Commission to provide block exemption to consortia between liner shipping companies (the Commission adopted Regulation 906/2009 and subsequently extended the application of the block exemption through Regulation 697/2014 and lastly through Regulation 2020/436 up to 2024); and (iii) Council Regulation 487/2009 authorizing the Commissions to grant block exemptions for certain agreements in the air transport sector—but no exemptions are currently in force.

16  As mentioned above, with the opening of national markets, transport has been brought within the general competition regime and this implies that specific exemptions for this sector have been progressively replaced by general competition rules. The removal of barriers and protectionist policies has strongly impacted on several grounds and transport firms have been under the attention of competition authorities for State aids, subsidies, and similar interventions by States in support of national undertakings. Transport services, defined as services of general economic interest (‘SGEIs’), can be subject to PSOs and universal service obligations (‘USOs’). PSOs in the transport sector are laid down in specific pieces of legislation for air services, inland transport, and maritime transport (Regulation (EC) No 1008/2008 on common rules for the operation of air services in the Community and Regulation (EC) No 1107/2006 concerning the rights of disabled persons and persons with reduced mobility when they are travelling by air; Regulation (EC) No 1370/2007 on public passenger transport service by rail and by road; Regulation (EEC) No 3577/92 on maritime cabotage). This reflects the general mode-specific approach adopted by the EU. In the transport sector, PSOs are mainly provided in passenger transport rather than in freight. The key characteristic of PSOs is that they can ensure the supply of non-profitable services that are not provided by the market on its own initiative and thus, for instance, allow isolated or peripheral areas to be covered by transport services and infrastructures. In general, the financing of SGEIs poses the question of the relationship between Article 106(2) TFEU, Article 107 TFEU, and the criteria set out in Altmark judgment (indicating four cumulative conditions which, if met, mean that the compensation for the costs incurred in the discharge of PSOs is not State aid). There are several regulations, communications, and guidelines on State aid in the transport sector and specifically applicable to the various modes of transport, ie rail (State Aid in Railway Transport), air, road (State Aid and Public Service Obligations in Road Transport), and water transport (State Aid in Water Transport) (eg Guidelines on State aid to airports and airlines (2014/C 99/03); Guidelines concerning Regulation (EC) No 1370/2007 on public passenger transport services by rail and by road (2014/C 92/01); Guidelines on State aid for railway undertakings (2008/C 184/07); Guidelines on State aid to maritime transport (C/2017/2328), updating Commission communication C(2004) 43; Guidance on State aid to ship management companies (2009/C 132/06); Guidance on State aid complementary to Community funding for the launching of the motorways of the sea (2008/C 317/08)).

17  A particular attention has been devoted by EU legislation to passenger rights. On the one hand, there is a reciprocal relationship between passenger protection and the development of consumer protection policies in the EU. However, the notion of ‘passenger’ transcends that of ‘consumer’. The EU has, over time, adopted a body of rules designed to protect passengers, which build on previous legislation on the protection of consumers (Consumer Protection) (Directive 93/13/EEC on unfair terms in consumer contracts; Directive 2005/29/EC on unfair business-to-consumer commercial practices in the internal market; Regulation (EC) No 2006/2004 on consumer protection cooperation; and Directive 2011/83/EU on consumer rights) and package holidays (Directive 90/314/EEC on package travel, package holidays and package tours; replaced by Directive (EU) 2015/2302 and on the applicable international conventions) (Package Travel Contract and Linked Travel Arrangements). Rules on carrier liability in the event of accidents have been brought into line with the relevant international conventions: the Montreal Convention for Air Transport (Regulation (EC) No 889/2002); the Athens Convention for Maritime Transport (Regulation (EC) No 392/2009); and the Convention concerning International Carriage by Rail (Regulation (EC) No 1371/2007). The first set of passenger rights has been established in air transport (Denied Boarding, Delay and Cancellation; Air Carriers’ Liability) and subsequently for the other modes. These rules aim at establishing the minimum standard for passengers’ rights and the quality of services to be provided by transport firms. The main common criteria these rules adopt are as follows: (i) non-discrimination and equal treatment, according to which fares for transport are equally applicable to all passengers, regardless of their nationality, residence, etc; (ii) accessibility and special protection for reduced-mobility passengers; (iii) right to information, according to which adequate, transparent, and easily accessible information must be provided to all passengers in a timely manner; (iv) arrangements for handling complaints; (v) national enforcement bodies, to which passengers can rely for the application and enforcement of their rules; (vi) provision of specific passenger rights—such as compensation and assistance—in the event of cancellation or significant delay and in the event of disruption. In addition, each mode has specific schemes and rules on these common lines and carrier’s liability for damages towards passengers and luggage (currently such rules comprise: Regulation (EC) No 261/2004 establishing common rules in the event of denied boarding and of cancellation or long delay of flights, and Regulation (EC) No 2027/97 on air carrier liability in respect of the carriage of passengers and their baggage by air, as amended by Regulation (EC) No 889/2002; Regulation (EC) No 1371/2007 on rail passengers’ rights and obligations, as amended by Regulation (EU) No 2016/2338, and the new Regulation (EU) No 2021/782 applicable as of 7 June 2023; Regulation (EU) No 1177/2010 concerning the rights of passengers when travelling by sea and inland waterway; Regulation (EU) No 181/2011 concerning the rights of passengers in bus and coach transport).

18  Environmental dimension in the transport sector constitutes a crucial issue, since the integration of environmental protection in transport policy with the 1986 Single Act. External costs of transport in terms of polluting emissions and noise, as externalities, represent a key challenge for transport policy. EU policy in this area includes the adoption of several measures to support the transition to a more sustainable economy.

19  Methods used with the aim of reducing external costs of transport have included the recourse to standard-setting and market-based mechanisms, such as the European Emissions Trading System (‘ETS’). With regard to the former, standards are widespread in all transport sectors and may focus on both polluting emissions and noise. They can be set at EU level or, in the case of international markets, by the competent international body, eg the International Maritime Organization (IMO) in the maritime sector and the International Civil Aviation Organization (ICAO) in the aviation sector (De Vos 53). Road transport represents the most critical area, accounting for the major part of greenhouse gas (‘GHG’) emissions deriving from transport. In this field, starting from the 1970s, the EU has introduced standards aimed at making vehicles less pollutant and setting the emission limits for different types of vehicles. With regard to rail transport, which is not considered a pollutant mode of transport, the EU has intervened introducing noise standards in the form of Technical Specifications for Interoperability, setting the maximum level of noise for new railways vehicles and providing for incentives to retrofit existing rolling stock (Regulation (EU) No 1316/2013 establishing the Connecting Europe Facility, repealed by Regulation (EU) 2021/1153). In the aviation sector, ICAO standards, introduced firstly with regard to noise and then for emissions, have been recognized by the EU since the creation of the European Aviation Safety Agency, as the body entrusted for certification against safety and environmental standards. Similarly, IMO rules have been transposed into the EU rules governing maritime transport.

20  With regard to GHG emissions, carbon dioxide (‘CO2’) emissions deriving from aviation have been included in the EU ETS in 2008 and starting from 2012 (Directive 2008/101/EC). The EU ETS requires all airlines operating in Europe—including non-European airlines—to monitor, report, and verify their emissions and to surrender allowances against those emissions. Airlines receive tradeable allowances up to a certain level of emissions per year. Originally the legislation adopted in 2008 intended to cover emissions from flights from, to, and within the European Economic Area (EEA), as also confirmed by the Court of Justice (Air Transport Association of America and ors v Secretary of State for Energy and Climate Change). Nevertheless, due to the opposition of third countries, the EU decided to limit the scope of the EU ETS to flights within the EEA until 2016 and to support the development of a global measure by the ICAO. Following the Resolution A 39-3 by the 2016 ICAO Assembly adopting a global market-based measure to address CO2 emissions from international aviation as of 2021, the EU has decided to maintain the geographic scope of the EU ETS limited to intra-EEA flights from 2017 onwards.

21  With regard to emissions deriving from maritime transport, the EU strategy has provided as a first step from 2018 monitoring, reporting, and verification of CO2 from large ships using EU ports, while the following two steps include greenhouse gas reduction targets and further measures, including market-based ones, in the medium to long term (COM(2013)0479 final; Regulation (EU) 2015/757 as amended by Commission Delegated Regulation (EU) 2016/2071). The importance of taking initiatives on shipping emissions has been also stressed by the Directive (EU) 2018/410 (amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments; Decision (EU) 2015/1814).

22  According to the Commission, transport accounts for a quarter of the EU’s GHG emissions and a 90% reduction in transport emissions would be needed by 2050 in order to achieve climate neutrality. The Communication of the Commission on ‘The European Green Deal’, adopted in 2019 (COM(2019)640 final), identifies as main steps to support sustainable transport the following: boosting considerably the uptake of clean vehicles and alternative fuels; shifting to more sustainable transport modes such as rail and inland waterways; improving multimodal transport; and improving smart mobility (Smart Mobility and Services) and traffic management. Transport is also included in the ‘Fit for 55’ legislative proposals put forward by the Commission in 2021 (COM(2021) 550 final).

23  Historically international transport was organized in the institutional framework of the United Nations (UN) and the European transport modes were to be covered by rules dictated by UN-related organizations, such as the IMO for maritime transport, the ICAO for air transport, the United Nations Economic Commission for Europe for road transport, and the International Labour Organization concerning labour relations. Moreover, the EU is not considered by some organizations as a full right member, as Member States may prefer to act independently in the international context (for instance, this occurs within the ICAO, where the EU has observer status) (De Vos 34).

24  Due to the fact that transport is inherently and fundamentally international, the EU has included transport in all trade—World Trade Organization, regional and bilateral—and has identified several actions to be taken and linked to the development of transport beyond its own borders (2011 White Paper). Among those actions, the EU is particularly interested in affirming its role as a standard setter in the transport area, including the promotion of SESAR, ERTMS, and Intelligent Transport Systems (ITS) technology deployment. Three main areas of work with third countries have been identified: (i) enlargement countries, ie candidates and potential candidate countries, which are required to implement all EU transport policies and set the appropriate reforms well before their actual accession; (ii) European Neighbourhood Policy countries (eg Eastern Partnership, Euro-Mediterranean Partnership); and (iii) bilateral relations with other third countries—existing areas of activity cover in particular China, Japan, the United States, Brazil, and regions such as Association of Southeast Asian Nations/South East Asia.

25  EU transport policy plays a key role in the internal market completion, including as main lines of actions service liberalization, network integration, and harmonization of national regulatory frameworks. Transport is a sector heavily regulated and the interplay between the Commission and Member States in enforcing EU law and policy represents an important element of complexity. A huge body of secondary legislation has been devoted to several aspects, including the social dimension, working conditions, and the protection of transport users. Further crucial challenges in this area derive from sustainability issues, as the development of low-carbon transport systems is currently a central objective of the EU transport policy. Transport has also been one of the first sectors to be affected by the disruptive effects of digitalization, which has crucially influenced demand and supply of transport services. This is reflected in the attention devoted to smart mobility and the use of digital technology, connected transportation, and accessibility systems. Ride-sharing services (eg Uber) and micromobility services (eg shared electric scooters and bicycles), alternative energy sources for mobility (eg electric vehicles), connected and automated driving (eg self-driving cars), and Intelligent Transport Systems are some examples of the several issues the EU transport system is dealing with, in line with the general objective of the EU of acting as a global leader in these areas.