Antitrust: Commission sends Statement of Objections to České dráhy and Österreichische Bundesbahnen over alleged collective boycott

(Source: European Commission)

The European Commission has informed České dráhy (‘ČD’) and Österreichische Bundesbahnen (‘ÖBB’), the Czech and Austrian rail incumbents, of its preliminary view that they have breached EU antitrust rules by colluding in the market for used passenger railway wagons with the aim to distort competition in the rail passenger transport market.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “With healthy competition, European citizens benefit from good quality and affordable rail passenger services.  Attractive rail passenger services also encourage travellers to shift from road to rail transport, which is essential for achieving the EU Green Deal’s objectives. In today’s Statement of Objections, we preliminarily found that ÖBB and ČD breached EU competition rules by colluding to hinder access to used wagons to a new entrant, RegioJet, restricting competition on the rail passenger transport market.”

Statement of Objections on the companies’ alleged collective boycott

In 2011, the Czech rail company RegioJet entered the long-distance rail passenger transport market in Czechia. For its operations, RegioJet largely relied on used wagons to be able to compete with ČD and ÖBB.

The Commission preliminarily finds that, between 2012 and 2016, ČD and ÖBB engaged in a collective boycott aimed at maintaining their market position and impeding the expansion of RegioJet both in Czechia and on the international rail route between Prague and Vienna. A collective boycott occurs when a group of competitors agree to exclude or hinder an actual or potential competitor.

In particular, the Commission’s preliminary view is that ČD and ÖBB agreed to hinder RegioJet’s access to ÖBB’s used wagons for long-distance passenger transport. To ensure that RegioJet could not acquire those wagons, ČD and ÖBB coordinated their actions in order to boycott RegioJet in sales of used ÖBB wagons.

If the Commission’s preliminary view were confirmed, ČD’s and ÖBB’s conduct would infringe Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) that prohibits anti-competitive business practices such as collusion.

Sending a Statement of Objections does not prejudge the outcome of the investigation.

Background

The Commission’s investigation started with unannounced inspections in June 2016.

A Statement of Objections is a formal step in the Commission’s investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The parties can then examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.

If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of a company’s annual worldwide turnover.

There is no legal deadline for the Commission to complete antitrust inquiries into anticompetitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.

To deliver on the objectives of the EU Green Deal, emphasis is placed on increasing the efficiency of the transport system, strongly prioritising the rail transport as an environmental-friendly mode of transport. This cannot be achieved without the existence of effective competition.

For More Information

More information will be made available under the case number AT. 40401 in the public case register on the Commission’s competition website. A periodic compilation of antitrust and cartel news is available in the Competition Weekly News Summary.

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