The final fine for the distortion of liberalisation imposed on České dráhy shall be almost CZK 275 million

Petr Rafaj, the Chairman of the Office for the Protection of Competition, has confirmed by his final decision that the company České dráhy, a. s. abused its dominant position, when it foreclosed the market of long-distance rail passenger transport services in 2005/2006 – 2014 and prevented its competitors’ entry to the market. The final amount of the fine for this anticompetitive conduct shall be CZK 274,797,000.

The Chairman of the Office has confirmed the first-instance decision of December 2017 on the merits. According to the decision, České dráhy infringed the Act on the Protection of Competition, as well as the Article 102 of the Treaty on the Functioning of the European Union. České dráhy abused its dominant position in relation to public contracts on provision of long-distance rail passenger transport services on the lines Plzeň – Most and Pardubice – Liberec by submitting bids to the Ministry of transportation with unreasonably low amount of the demonstrable loss.

České dráhy won the award procedure because of this bid, and afterwards, it started to provide services, when the reimbursement of the actual demonstrable loss together with other incomes arising from provision of these services didn’t cover the inevitable costs of provision. The anticompetitive conduct took place in case of the line Plzeň – Most between 15 November 2005 and 13 December 2014 and in case of the line Pardubice – Liberec between 26 May 2006 and 13 December 2014.

The Office concluded that this conduct consisted in application of prohibited predatory prices, when the dominant undertaking is incurring loss to himself with the objective to foreclose the market or to force its competitors out of the market. Actual damage was caused by the conduct of České dráhy to companies VIAMONT and Connex Česká Železniční, which were interested in provision of these services during the beginning of liberalisation in railway transportation. As a result, a potential harm to customers was caused as well. The trade between member states in the area of provision of long-distance rail passenger transport services could be also affected.

Nevertheless, the Chairman of the Office partially accepted the objections of the party to the proceedings regarding the amount of the imposed fine. In the first-instance proceedings, the different seriousness of impacts on the trade between the member states and on the national market was not taken into account; this resulted in the fact that the basic amount of the fine was increased with the same seriousness for all infringements committed in concurrence. Therefore, the fine was adjusted to that effect, i. e. it was reduced from the original amount of CZK 367,805,000 to the final amount of CZK 274,797,000.

Press Unit of the Office

19/073/HS026 – R238/2017