BRUSSELS — The European Commission has imposed a fine of €48.7 million on České dráhy (ČD), the Czech rail operator, and Österreichische Bundesbahnen (ÖBB), the Austrian federal railways, for engaging in collusive behaviour aimed at excluding a common competitor from the market.
The Commission’s investigation, which began in 2019, uncovered that ČD and ÖBB had coordinated their behaviour to hinder the entry and expansion of Westbahn, a private railway operator, in the rail passenger transport market on the Vienna – Salzburg route. This conduct is in breach of EU antitrust rules, which prohibit agreements and concerted practices that prevent, restrict, or distort competition within the internal market.
Margrethe Vestager, Executive Vice-President of the Commission in charge of competition policy, stated, “Rail passenger transport is crucial for mobility and sustainable travel. Today’s decision ensures that competition in this market is not derailed. České dráhy and Österreichische Bundesbahnen colluded to exclude a competitor and this is not acceptable. This decision also sends an important signal to other companies that they have to respect the competition rules.”
The infringement occurred between December 2011 and July 2016, during which time ČD and ÖBB exchanged commercially sensitive information and coordinated their strategies regarding Westbahn. The Commission found that the two companies aligned their behaviour to protect their respective positions in the market and hinder Westbahn’s growth.
Allegations of Cartel Activity
In March 2020, ALLRAIL, the Alliance of Passenger Rail New Entrants, raised concerns about an alleged agreement between ČD and ÖBB to restrict access to rolling stock for new entrants. According to a media report and exposed emails, ČD and ÖBB agreed in 2015 that ÖBB would not sell second-hand couchette rolling stock to the Czech-based new entrant RegioJet, despite RegioJet offering a higher price. This alleged agreement aimed to “eliminate” RegioJet’s access to essential rolling stock, highlighting a significant barrier to entry for newcomers in the rail transport sector.
ALLRAIL’s Secretary General Nick Brooks stated, “This could be the tip of the iceberg. We are worried that national rail incumbents collude in many other areas too. It shows that market opening will only happen by enforcing competition rules. Otherwise modal shift to rail will not happen and the EU Green Deal will be in serious jeopardy.”
EU’s Push for Competition in Railway Sector
The EU has been working to boost competition in the railway sector for decades. The 4th Railway Package, a set of six legislative texts, aims to complete the single market for rail services. Its market pillar establishes the right for railway undertakings to operate passenger services across the EU, improves governance impartiality, and introduces mandatory tendering for public service contracts. The goal is to revitalise the rail sector, make it more competitive, and encourage operators to become more responsive to customer needs.
Fines and Next Steps
The fine was calculated based on the Commission’s 2006 Guidelines on fines, taking into account the gravity and duration of the infringement. ČD was fined €27.4 million, while ÖBB received a fine of €21.3 million.
Both companies can appeal the decision to the General Court of the European Union. If they do not challenge the decision, they must pay the fine within three months.
The Commission’s decision underscores its commitment to ensuring fair competition in the rail transport sector, ultimately benefiting consumers through better services and prices. This case serves as a reminder to businesses across all sectors that engaging in anti-competitive practices can result in significant financial penalties
