More Fines for Antitrust Rail Freight Activity Throughout Europe as Cartel Penalties Imposed

EUROPE – The European Commission (EC) has fined railway companies Österreichische Bundesbahnen (ÖBB), Deutsche Bahn (DB) and SNCB a total of €48 million for breaching EU antitrust rules.

The EC found that the companies participated in a customer allocation cartel, which concerned cross-border rail cargo transport services on blocktrains on key rail corridors in the EU. The three companies admitted their involvement in the cartel and agreed to settle the case. Executive Vice-President Margrethe Vestager, in charge of competition policy, said:

“Rail transport of cargo is vital for a sustainable economy model. Fair competition is important to provide customers with the best offer when using sustainable transport. A cartel between key operators offering rail cargo services on essential rail corridors across the EU goes fundamentally against this objective. Today's decision sends a clear signal that this type of collusive behaviour is not acceptable.”

The Commission's investigation revealed that the three railway companies coordinated by exchanging collusive information on customer requests for competitive offers and provided each other with higher quotes to protect their respective business. The companies thus participated in a customer allocation scheme, which is prohibited under EU competition rules.

The anti-competitive conduct lasted from December 8, 2008 to April 30 2014, with SNCB participating only since November 15, 2011 and only for transports by ÖBB, DB and SNCB. The cartel concerned conventional cargo transport sectors (except automotive transports). Deutsche Bahn is of course a serial abuser of the EU rules. In 2017 it was fined over €10.5 million for collusion with Spanish carriers, in 2016 was widely criticised for flaunting EU rules and a year previously then subsidiary Schenker was hit with a €31.8 million penalty. The list goes on.

In setting the level of fines, the Commission took into account, in particular, the sales value achieved by the cartel participants for the services in question in the EU in 2013 (the last full year of infringement), the serious nature of the infringement, the geographic scope and the duration of each undertakings participation in the infringement.

The fine for Deutsche Bahn AG was increased by 50% since it had previously been held liable for another cartel and was therefore considered a repeat offender. ÖBB received full immunity, thereby avoiding an aggregate fine of circa €37 million.

DB and SNCB benefited from a reduction of their fines for their cooperation with the Commission during the investigation. The reduction reflects the timing of the cooperation and the extent to which the evidence provided helped the Commission to prove the existence of the cartel in which they were involved.

In addition, the Commission applied a reduction of 10% on the fines imposed under the Commission 2008 Settlement Notice in view of their acknowledgment of their participation in the cartel and of their liability in this respect. One is left to wonder however when even more heavy penalties should additionally reflect a persistent history of abuse of the rules as would be the case in any other Court of Law.

The breakdown of the fines imposed on each company is as follows: