Antitrust regulations

EU demands 16.7 million euros fine from ÖBB

(Bild: Birbaumer Christof)

A total of 48.7 million euros in fines! Because the Czech railroad company České dráhy ("ČD") and ÖBB allegedly made agreements between 2012 and 2016 to hinder the expansion of the then new rail provider RegioJet, the EU Commission is now taking action. For the Austrian Federal Railways, this means a fine of 16.7 million euros - despite a reduction of 45 percent.

How it all began: In order to compete with the two national railroads of the Czech Republic and Austria, RegioJet started using second-hand ÖBB wagons in 2012. As these could score points with modern equipment and quality and were already approved in the Czech Republic.

Agreements to slow down the competition
An investigation by the European Commission has revealed that ČD and ÖBB colluded between 2012 and 2016 to maintain their market position and hinder RegioJet's expansion both in the Czech Republic and on the international rail route between Prague and Vienna.

The sale of the used freight wagons was not only "timed" in such a way that RegioJet was unable to purchase the ÖBB wagons. The ÖBB wagons were then purchased by the Czech Federal Railways instead of RegioJet as a result of manipulated sales procedures, including an agreement and exchange of confidential information between bidders and potential buyers.

EU sees distortion of competition
The EU sees this as exclusion and distortion of competition and therefore a violation of Article 101 of the Treaty on the Functioning of the European Union (TFEU). This reads: "All agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market shall be prohibited as incompatible with the internal market."

Discount for penalty payment
But it could have been even worse: By cooperating with the EU Commission, i.e. under the leniency program, ÖBB obtained a 45 percent reduction in the fine. The reduction reflects the timing of the cooperation of the Austrian Federal Railways and the extent to which the evidence submitted by ÖBB helped the Commission to prove the existence of the cartel.

Margrethe Vestager, Vice-President of the Commission in charge of competition policy, said: "Today we are fining ČD and ÖBB a total of €48.7 million for colluding in their established positions to hinder the expansion of their competitor RegioJet. They prevented RegioJet from buying used ÖBB railcars, which RegioJet relied on to compete with ČD and ÖBB. Attractive rail passenger services are key to reducing our environmental footprint and we will not tolerate any restriction of competition."