Bloomberg News

Deutsche Bahn Faces EU Cartel Probe on Rail Power Prices

June 13, 2012

Deutsche Bahn AG, Germany’s state- owned railway, faces a European Union antitrust probe over the prices a unit charges for power used by trains.

The European Commission will investigate whether Deutsche Bahn’s DB Energie unit, the only supplier of traction current in Germany, offers discounts that “lead to higher prices for competitors of Deutsche Bahn and place them at a competitive disadvantage on the rail freight and passenger market,” the regulator said in an e-mailed statement.

EU regulators raided Deutsche Bahn’s offices last year to check allegations that DB Energie was favoring the group’s rail- freight arm over others. Joaquin Almunia, the EU antitrust chief, has said enforcement must give potential competitors in industries dominated by ex-state monopolies “the opportunity to launch their own services and compete effectively.”

Deutsche Bahn “will work with the commission to clear up the issue,” according to a spokesman who declined to be named, citing company policy.

Deutsche Bahn last year filed a lawsuit at the EU’s Court of Justice in Luxembourg over the EU raid that it said was an unjustified “fishing expedition” by investigators seeking evidence of antitrust infractions. The Berlin-based company said officials exceeded their authority with a “disproportionately wide” inspection and should return copies of documents made during the raid.

EU regulators can fine companies as much as 10 percent of their yearly revenue for abusing a monopoly position.

Veolia Environnement SA’s Veolia Verkehr unit operates local train services in six German regions, as well as Germany’s first long-distance service not to be operated by Deutsche Bahn, between Leipzig and Berlin. The business has about 4,500 employees in Germany, compared with the 193,000 staff that Deutsche Bahn has in the country.

Regional services are also operated by Ferrovie dello Stato SpA’s Netinera business in northern and eastern Germany. The unit was sold to the Italian rail operator in 2011 following parent Arriva’s acquisition by Deutsche Bahn the previous year.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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