On July 25, 2019, the German Monopolies Commission presented its 7th Sector Report on the German Railway market, assessing quality and competition in the industry.[1]

The Monopolies Commission identifies poor train punctuality and a poor condition of the railway infrastructure as the key deficiencies of the German railway sector. To improve quality standards, the report’s recommendations focus on the role of the infrastructure operators, most prominently on DB Netz AG. Inter alia, the Monopolies Commission recommends to hold infrastructure operators liable for traffic delays caused by poor infrastructure. To incentivize them to contribute to improved train punctuality, infrastructure operators should be obliged to compensate train operators if train punctuality targets are missed because of infrastructure issues. In the same vein, the German federal government should make better use of its ability to make the public funds regularly granted to DB Netz AG subject to the condition that the network operator meets specific pre-defined quality standards.

Further, the Monopolies Commission considers it necessary to strengthen competition in the German railway sector to increase the quality of train services. The report recommends to reduce track access charges for independent train operators and—most importantly—to establish truly independent infrastructure operators, i.e., to foster a clear vertical separation between infrastructure and train operations within the DB group. To that end, the Monopolies Commission recommends that the federal government as the sole owner of the DB group should divest all shares held in any DB group companies that are active in competitive railway markets, and should keep only shares in companies that are active in regulated railway markets.

[1]              Monopolies Commission 7th Sector Report, July 2019, only available in German here. Monopolies Commission Press Release, July 25, 2019, available in English here.