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November 14, 2016

EC investigates Czech Railways over anti-competitive fare allegations

The European Commission (EC) has opened an antitrust investigation against Czech Railways incumbent České dráhy (ČD) over claims that it charged prices below costs to close competition in rail passenger transport services.

By Srivani Venna

The European Commission (EC) has opened an antitrust investigation against Czech Railways operator Ceské dráhy (CD) over claims of charging prices below costs to restrict competition in rail passenger transport services. 

Under Article 102 Treaty on the Functioning of the European Union, companies are prohibited from abusing a dominant market position that may affect trade between EU Member States.

Abuse may include imposing unfair purchase or selling prices or other unfair trading conditions. The allegations against CD focus on services the company offers on the Prague-Ostrava line and the substantial reduction in its charges after RegioJet and Leo Express started operations on the same route in 2011 and 2012 respectively.

"We need to take a close look at Ceské dráhy's business practices to make sure they do not push out competitors to the detriment of passengers."

CD is the main railway operator in the Czech Republic and the only rail company active on the Prague-Ostrava route until 2011.

The commission said that these practices may restrict competitors from remaining in the market, potentially disadvantaging passengers.

The EU Commissioner in charge of competition policy Margrethe Vestager said: "Competition drives prices down and service quality up.

“This is what we need in railway passenger transport, especially when we're serious about cutting our carbon emissions.

“We need to take a close look at Ceské dráhy's business practices to make sure they do not push out competitors to the detriment of passengers."

After a complaint, EC carried out inspections at CD premises in April this year.

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