The wheels on the train go… to court?
The German Federal Competition Authority (Bundeskartellamt) reached its landmark decision on 26 June, 2023, in which it concluded, that the German National Railway Company (Deutsche Bahn, hereinafter: “DB”) was in violation of antitrust regulations.
DB, the prevailing service provider on the German railway market, became subject of Bundeskartellamt’s inquiry because of its practices making free competition impossible between itself and its competitors, the so called “mobility platforms”. These latter firms provide passengers with travelling opportunities or ticket prices in a comparative manner. Owing to the nature of their services, receiving up-to-date traffic information is essential for their due operation. As DB is the prevailing actor in the German railway market, such information cannot be obtained without their contribution.
Andreas Mundt, President of Bundeskartellamt said that owing to the dominant position of DB, they should have met stricter conditions in order to maintain free competition on the market. Such “special obligations” would have been providing competitors with traffic information, enabling them to launch advertisement campaigns and paying commission. As DB operates a mobility platform on its own, it is a direct competitor of the other firms, therefore its liability is graver.
During its proceedings the Bundeskartellamt concluded, that DB was in violation of antitrust regulations for several reasons. Firstly, it did not support mobility platforms with essential traffic information, then, it did not pay them commission and it also put a ban on advertisement campaigns of competitors.
After unsuccessful negotiations, the Bundeskartallamt is trying to ensure the lawful operation of DB. Within this framework, the authority has imposed several measures on the railway mammoth. Firstly, its competitors will be entitled to use DB related terms in the advertising campaigns, they will be allowed to offer own discounts on DB tickets and their access to real-time data will be ensured. Furthermore, DB is obliged to pay certain commissions (based on negotiations with their competitors, but the sum cannot be less than DB’s long-run average incremental costs of ticket vending) to competitor platforms.
According to Andreas Mundt, these measures are needed to prevent DB from expanding even more, furthermore, to prevent it from suppressing smaller, yet innovative platforms. As a consequence, this decision will have a huge impact on the respective market, resulting in the rapid growth of smaller service providers.
The decision is not yet final, DB can appeal to the Düsseldorf Higher Regional Court.
Author: Hunor Bendegúz Jávorszki