European Commission Fines Czech and Austrian Rail Operators 48.7 Million Euro for Colluding Against RegioJet

Written By: Tuhin Sarkar

Tuhin Sarkar

Tuhin Sarkar is a Senior Journalist at Travel and Tour World with more than 10 years of experience in travel and tourism journalism. A post-graduate in Journalism and Mass Communication from Jadavpur University, he combines strong research, industry knowledge and storytelling expertise to produce engaging, insightful and impactful travel news and fascinating feature stories.

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October 25, 2024 16:26 GMT+5:30

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The European Commission has imposed a €48.7 million fine on the Czech and Austrian national rail operators, České dráhy (ČD) and Österreichische Bundesbahnen (ÖBB), for anticompetitive practices intended to hinder RegioJet, an independent rail operator, from acquiring rolling stock to support its expansion. This significant penalty marks a crucial step by the EU to promote fair competition in the European rail market.

Background of the Anticompetitive Practices

Between 2012 and 2016, ČD and ÖBB allegedly colluded to limit RegioJet’s access to second-hand rail vehicles. The European Commission’s investigation revealed that the operators worked to ensure that ÖBB’s coaches were sold to ČD instead of RegioJet and agreed on a different buyer for the rolling stock that ČD did not purchase. Furthermore, the two national operators exchanged confidential information about other bidders’ interest in purchasing rolling stock, preventing RegioJet from expanding its fleet on the Praha-Wien route and within the Czech Republic.

In response to the fine, ČD maintained its stance, stating that it never interfered with ÖBB’s sales and that the used vehicles were always sold “on a market principle at the highest price offered.” ČD also mentioned its intention to challenge the decision in EU judicial authorities, although it has set aside a financial reserve to pay the fine. ÖBB, however, has expressed willingness to close the proceedings, noting that it has since implemented an antitrust training program to ensure compliance among employees.

European Commission’s Position on Rail Competition

The European Commission’s Executive Vice-President for competition policy, Margrethe Vestager, stressed the importance of fair competition in the rail sector. “Attractive rail passenger services are key for reducing our carbon footprint, and we do not tolerate any restriction of competition,” Vestager said during an October 23 announcement. The fines paid by ČD and ÖBB will be allocated to the EU’s general budget, contributing to the broader goals of sustainable transport and climate action by supporting competition across member states.

Impact on RegioJet and the Rail Industry

RegioJet, which had acquired approximately 70 coaches from ÖBB before the alleged interference, stated that the restrictions had significantly impacted its growth plans. After the interference began, ČD purchased roughly 200 additional vehicles that RegioJet had intended to acquire. RegioJet also indicated it would seek compensation through national courts, stating, “we have the right to compensation, which we will also apply for.”

The AllRail alliance, which represents independent rail operators across Europe, welcomed the European Commission’s ruling. The alliance highlighted that the case reflects the challenges independent operators face when competing with state-backed incumbents in the rail market. AllRail hopes that this decision will encourage a more competitive and open rail industry, which will attract more passengers and contribute to Europe’s environmental goals.

Implications for the European Rail Sector

This case is one of several actions taken by the European Commission to regulate competitive practices in the rail sector and ensure that no operators can unfairly dominate the market. By holding ČD and ÖBB accountable, the Commission is signaling its dedication to fostering a competitive rail industry that supports a more interconnected, sustainable Europe.

For smaller or independent rail companies like RegioJet, the decision represents a step forward in their ability to compete on a more level playing field. Greater access to rolling stock is crucial for operators aiming to expand across borders and improve service offerings for passengers. As the EU prioritizes carbon reduction in transportation, ensuring fair market conditions will be essential to making rail a viable alternative to road and air travel.

Future Actions and Commitments

To prevent similar issues in the future, ÖBB has committed to antitrust compliance through a new training program. The European Commission will continue monitoring compliance across the industry, particularly as independent operators continue to seek entry into various national markets. The annual fines and enforcement actions also indicate that the EU remains firm on its competition policies, which aim to protect consumer interests and enhance transportation options.

As independent operators gain fairer access to resources, this increased competition is expected to benefit passengers through lower fares, improved service, and more route options. The Commission’s stance on competition is a critical component of its broader efforts to make sustainable travel options accessible and affordable across Europe.

Conclusion: A Milestone for Fair Competition

The €48.7 million fine against ČD and ÖBB serves as a milestone in the European Union’s efforts to ensure fair competition within the rail sector. As the rail industry continues to evolve, the European Commission’s commitment to enforcing these standards reinforces the importance of open markets and competition for achieving the EU’s sustainability goals.