The European Commission closed its antitrust investigation into alleged predatory conduct by České dráhy.
Czech Railways will not have to pay millions of euros to the European Commission and the carrier’s competitors for its behavior on the Prague–Ostrava route at the time when RegioJet and Leo Express entered the market.
The European Commission announced today it has decided to close its antitrust investigation into alleged predatory conduct by České dráhy (ČD) in the Czech passenger rail transport sector. “Following a careful assessment of all relevant evidence, including information received from ČD, the Commission concluded that the evidence did not confirm its initial concerns and has therefore decided to close its investigation,” said the EC in a press release. The decision is final.
The investigation was opened in November 2016 in order to assess the Czech carrier’s suspected underpricing with the aim of preventing private carriers from doing business. In October 2020, the Commission issued a Statement of Objections having reached a preliminary conclusion that between 2011 and 2019 České dráhy breached EU antitrust rules by charging prices below cost (i.e. predatory pricing) on the Prague–Ostrava route.
The affected carriers RegioJet and Leo Express instigated the investigation. RegioJet claims that in 2011, as the carrier began offering services on the Prague–Ostrava route, ČD has reduced fares on this route to 30% below RegioJet’s price level. The European Commission’s verdict is bad news in the carriers’ fight for compensation for alleged damages.
České dráhy quantified the risk of EC fines for predatory pricing at CZK 1.7 billion. This includes claims by Leo Express for EUR 42.8 million. CEETransport.com has reached out to RegioJet for comments.
Ongoing EC investigation into ČD and ÖBB
Today’s verdict does not mean the end of legal action against ČD. The European Commission suspects České dráhy and Österreichische Bundesbahnen (ÖBB) of having entered into a cartel agreement in the market for used passenger railway cars. The secret agreement was intended to harm RegioJet.
In this case, ČD expects to receive a Statement of Objections this year. The reserve for potential fines is EUR 40.7 million. The carrier believes it has not broken the law.
Edited and translated by Lucie Trávníčková