On 8 April 2016, the Commission announced that it had adopted a decision to relieve Deutsche Bahn of its obligation to comply with a commitments decision made binding on the company in December 2013. According to the Commission, the commitments decision had achieved its "main purpose", which it identified in its press release of the same date as enabling "electricity providers not belonging to the Deutsche Bahn Group to enter the previously monopolised market for the supply of traction current to railway undertakings."
Competition Commissioner Vestager added that: "The growth in the level of competition in the German railway power supply market confirms that the commitments were successful at remedying our competition concerns. This is a good example of how commitment decisions can quickly and effectively open up markets, ensure a level playing field and lead to more competition and lower prices for consumers and businesses."
The commitments decision of December 2013 was adopted to end proceedings that were initiated in June 2012 regarding Deutsche Bahn's pricing system in Germany for the electricity used to power locomotives (see VBB on Competition Law, Volume 2012, No. 6, available at www.vbb.com). At the time of the investigation, DB Energie, a subsidiary of Deutsche Bahn, was the only supplier of such electricity (known as "traction current"), and only companies in the Deutsche Bahn group were able to fully benefit from available discounts.
To resolve these concerns, Deutsche Bahn offered to apply a single price without volume or duration-based discounts, and also agreed to pay non-Deutsche Bahn group companies a one-time retroactive refund of 4%. These commitments were published in August 2013 (see VBB on Competition Law, Volume 2013, No. 8, available at www.vbb.com). In a press release from the time, then-Commissioner Almunia stated "The Commission has concerns that DB Energie's pricing system, and in particular discounts that only railway companies of the DB Group can achieve fully, may have hampered the development of competition on the markets for rail freight and long-distance passenger transport, in breach of EU antitrust rules." The Commission's theory of infringement, as expressed in its press release, was that Deutsche Bahn may have created a margin squeeze on the long distance passenger rail transport and rail freight markets in Germany because the prices charged by it for traction current did not allow competitors on the downstream market (identified as those providing "rail transport services") to trade profitably on a lasting basis.
The price-based commitments thus helped bring an end to this alleged margin squeeze. At the same time, the Commission also accepted commitments from Deutsche Bahn with the aim of attracting new competitors on the upstream market for the supply of traction current to rail transport companies. This was accomplished by requiring the Deutsche Bahn group to introduce a new pricing system for traction current with separate supply prices for electricity and separate grid access fees, and at the same time offer access to its traction current network for third party energy providers so that they can supply traction current to railway undertakings.
The commitments were adopted for five years, but foresaw an earlier termination if 25% of traction current volumes purchased by competitors of the DB Group would be sourced from third party electricity providers. According to the Commission, this has now taken place. In adopting the decision at issue, Deutsche Bahn is now free of all the commitments that it offered, including, interestingly, those that prevented it from implementing volume or duration-based discounts. It will thus be interesting to see if Deutsche Bahn begins to offer discounts to its rail transport service customers, and, if so, whether the new competitors retain their current share of 25% of the market.
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