On April 20, 2021, the Commission fined Österreichische Bundesbahnen (“ÖBB”), Deutsche Bahn (“DB”) and Société Nationale des Chemins de fer belges/Nationale Maatschappij der Belgische Spoorwegen (“SNCB”) for their participation in a customer allocation cartel in the market for cross-border rail cargo transport services on blocktrains. The fine imposed amounts to a total of approximately €48 million and includes reductions following the leniency application of all three companies and their settlement with the Commission.[1]
Background
The Commission found that ÖBB, DB and SNCB participated in a customer allocation cartel in the market for cross-border rail cargo transport services on blocktrains. Blocktrains are cargo trains that deliver goods from one site to another without being stored or split up on the way. The trains usually transport high volumes of a single commodity, and connect major harbors and industrial sites across Europe. Freight sharing models are common practice in the cross-border rail cargo transport industry. These allow railway companies to provide cross-border freight services to customers for a single, comprehensive price.
ÖBB, DB and SNCB[2] concluded such bilateral and trilateral freight sharing services agreements for the transport services which they handled jointly. The Commission found that these agreements went beyond the scope of the cooperation authorized under legal freight sharing agreements and were therefore anticompetitive. It determined that the railway companies were exchanging sensitive information on customer requests for competitive offers and provided each other with higher quotes (i.e., higher prices to offer to customers) to protect their respective business and market shares. The Commission concluded that ÖBB and DB took part in these practices between December 2008 and April 2014, while SNCB participated between November 2011 and April 2014.
Leniency and settlement reductions vs. fine increase for repeat offence
All three companies benefitted from a double reduction of fine for (i) their cooperation with the Commission following their application for leniency; and (ii) acknowledging their participation and liability in the cartel in the context of their settlement with the Commission. ÖBB received full immunity for being the first leniency applicant, escaping a €37 million fine. For their cooperation during the leniency proceeding, DB and SNCB benefited from a 45% and 30% fine reduction respectively, and both benefitted from the 10% reduction provided for in the Settlement Notice.[3]
On the other hand, the Commission increased the fine against DB by 50% for its repeated participation in cartels in the cargo transport sector.[4] Indeed, DB has been a member of several cartels in the cargo transport sector over the past decade.
- In 2012, DB and its subsidiary Schenker were fined almost €35 million for their participation in four distinct cartels in air freight forwarding over the period of 2002 to [5]
- In 2015, DB and ÖBB, via their respective subsidiaries, were fined a total of €49 million for their participation between July 2004 and June 2012 in a cartel in the same product market as the present case, e., for cross-border rail cargo transport services on blocktrains. The 2015 case concerned mainly routes in central and southeastern Europe.[6]
While the Commission relied on DB’s participation in the freight forwarding cartels to increase its fine by 50% for the repeat offence, it could not take into account DB’s participation in the first blocktrain cartel because the decision in the latter case had not yet been notified to DB at the time of its participation in the second blocktrain cartel.
Notification of an infringement decision prior to a second infringement is a necessary condition for a repeat offence to constitute an aggravating factor. Only the 2012 freight forwarding decision had been notified to DB during the time of its participation in the second blocktrain cartel (2008-2014), whereas the first blocktrain decision was notified after DB had terminated its participation in the second blocktrain cartel, in 2015.[7]
| Rail Cargo 2021 Decisions | ||||
| Company | Reduction for leniency application | Reduction for settlement | Increase for aggravating factor | Fine (in euros) |
| ÖBB | 100 % | 10% | N/A | 0 |
| DB | 45 % | 10% | 50% | 48,324,000 |
| SNCB | 30 % | 10% | N/A | 270,000 |
Settlement vs. potential follow-on damages claims
The present case confirms the importance of the Commission’s leniency program despite fears that it would lose its attractiveness following the rise of private actions for damages, in particular with the adoption of the Damages Directive in 2014.[8] In an attempt to balance the benefits of settlement reductions with the risk of follow-on claims, ÖBB declared that the practices had no adverse effects on customers because prices were always “very competitive” and margins “extremely low” due to the strong competitive pressure exerted by truck transport and private rail cargo operators. DB also argued that no harm to customers was caused because the agreements at issue were in principle lawful and common industry practice.
[1] Rail Cargo (Case AT.40330), Commission Decision of April 20, 2021, not yet published.
[2] SNCB participated in the practices via its former subsidiary, SNCB Logistics (now Lineas Group).
[3] Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases, 2008/C 167/01, of July 2, 2008 (the “Settlement Notice”).
[4] Under para. 28 of the Commission Notice on Immunity from fines and reduction of fines in cartel cases, 2006/C 298/11, of December 8, 2006, recidivism is an aggravating factor allowing the Commission to impose up to a 100% fine increase.
[5] Freight Forwarding (Case AT. 39462), Commission decision of March 28, 2012.
[6] Blocktrains (Case AT. 40098), Commission decision of July 15, 2015.
[7] The various cargo cartels coincided with the liberalization of the cargo transport markets. The liberalization of the rail cargo sector took place between 2001 and 2016 with the adoption and revision of several railway packages. See, in particular, Directive 2007/58/EC of the European Parliament and of the Council amending Council Directive 91/440/EEC on the development of the Community’s railways and Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure, Directive 2012/34/EU of the European Parliament and of the Council establishing a single European railway area, OJ 2012 L 343/32, and Directive (EU) 2016/797 of the European Parliament and of the Council on the interoperability of the rail system within the European Union, OJ 2016 L 138/44.
[8] Directive 2014/104/EU of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ 2014 L 349/1.