16 July 2015

Commission fines cargo train operators €49 million for cartel

The European Commission has imposed fines of €49 million on Express Interfracht (part of the Austrian railway incumbent Österreichische Bundesbahnen), and Schenker (part of the German railway incumbent Deutsche Bahn), for operating a cartel in breach of EU antitrust rules in the market for cargo 'blocktrain' services. Along with  Kühne+Nagel of Switzerland, the companies have been found to have fixed prices and allocated customers for their ‘Balkantrain’ and ‘Soptrain’ services in Europe for nearly eight years.

Kühne+Nagel, which is one of the largest transport and logistics companies in Europe, also took part in the cartel but was granted immunity under the Commission's 2006 Leniency Notice for revealing the existence of the cartel. It avoided a fine of more than € 62 million. Express Interfracht and Schenker received reductions of their fines under the Leniency Notice for cooperating with the investigation.  Since all three companies agreed to settle the case with the Commission, the fines imposed were further reduced by 10%.

'Blocktrains' refers to a rail shipping system to transport cargo from one hub to another without wagons being split up or stored on the way. The 'blocktrains' covered by the cartel, named ‘Balkantrain’ and ‘Soptrain’, were jointly operated by Kühne+Nagel, Express Interfracht and Schenker. ‘Balkantrain’ ensures the connection between Western and Central Europe with Southeast Europe. ‘Soptrain’ connects Central Europe with Romania.

In order to limit competition between them, the companies agreed on several restrictive practices:

  • They agreed and allocated existing and new customers as well as setting up a customer allocation scheme.
  • They exchanged confidential information on specific customer requests.
  • They shared transport volumes contracted by downstream customers.
  • They coordinated prices directly by providing each other with cover bids in respect of customers protected under their customer allocation scheme and coordinated sales prices offered to downstream customers.

The infringement lasted from July 2004 to June 2012 for all companies.

Commissioner Margrethe Vestager who is in charge of competition policy said: "The European Union needs rail cargo markets to function efficiently on the basis of effective competition and not to be hijacked by vested interests to the detriment of customers."

Notably, the Commission states that the upstream coordination of the operators for the joint purchasing of transport services (such as locomotion/traction, trailers and other equipment from national rail carriers) is not covered by the decision because such coordination to create a 'blocktrain' service is not anticompetitive. The decision solely concerns the collusion between the operators of the blocktrains in the marketing of the service.

The decision is the 19th settlement since the introduction of the Commission’s settlement procedure for cartels in 2008.

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