On December 8, 2020, the FCJ overturned a decision of the DCA concerning an increase in cancellation fees for track access charges imposed by Deutsche Bahn AG (“DB”) between 2008 and 2011. The plaintiff demanded the repayment of a partial amount of the cancellation fees paid following a price increase of 150%. The FCJ referred the case back to the DCA.[1]

The FCJ confirmed its decisional practice allowing civil courts to review cancellation fees under EU competition law in parallel to and independently from any action taken by the national regulator, namely the Federal Network Agency. Despite a pending reference to the CJEU by the Berlin Court of Appeal for a preliminary judgement on the question whether such parallel review is permissible in the regulated railway infrastructure sector, the FCJ decided not to await the CJEU’s decision.[2] In the FCJ’s view, it was clear that such parallel review on the basis of EU competition law should be permissible.[3]

Further, the FCJ provided the DCA with guidance for its forthcoming examination under EU competition law whether the increase in cancellation fees for track access charges constitutes an abuse of a dominant position under Article 102 TFEU:

  • First, the DCA will have to assess whether the increase in cancellation fees constitutes a refusal to grant another undertaking access on reasonable, non-discriminatory terms to an infrastructure, in this case DB’s rail network, which is essential for the other undertaking to carry out its business. Prices and terms are considered excessive if a dominant company has made use of the opportunities arising out of its dominant position in such way as to reap trading benefits which it would not have reaped if there had been normal and sufficiently effective competition and thus has been able to impose prices which have no reasonable relation to the economic value of the service. The FCJ considers a sudden sharp price increase an indication of the exploitation of a dominant company’s operational leeway, which is no longer sufficiently controlled by
  • Second, the DCA will have to examine whether DB’s pricing constitutes an exclusionary abuse on the downstream market for rail transport. This would be the case if DB’s pricing qualifies as a so-called “margin squeeze” which prevents competitors in the downstream markets from competing effectively because they are left with a profit or margin that is too small to effective compete with the dominant company’s product or service on the downstream market. In this regard, The FCJ pointed in particular to the vertically-integrated nature of DB’s business and to the fact that access to its rail network is essential for other railway undertakings.

[1] Stornierungsentgelt II (KZR 60/16), FCJ judgment of December 8, 2020, only available in German here.

[2] DB Station & Service (C-721/20), Application as a working document, available in English here. The Berlin Court of Appeal decision (2 U 4/12 Kart) dated December 11, 2020 is only available in German here.

[3] In its landmark decision CTL Logistics , the CJEU previously considered that a national court’s review of the cancellation fees on the basis of national civil law was incompatible with EU law; see CJEU CTL Logistics (C-489/15) ECLI:EU:C:2017:834, available in English here. Consequently, the FCJ deemed the DCA’s decision unlawful because it wrongfully assessed DB’s conduct solely on the basis of national civil law with regard to its individual contractual equity.