Growing competition in German railway power supply market addressed the European Commission’s competition concerns in Deutsche Bahn case

Commissioner Margrethe Vestager, in charge of competition policy, said: “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.”

In December 2013, the Commission accepted commitments offered by the German railway incumbent Deutsche Bahn regarding its pricing system for traction current in Germany. Traction current is the electricity used for powering locomotives and is therefore an indispensable input for railway companies. Prior to the commitments entering into force DB Energie, a Deutsche Bahn subsidiary, was the only supplier of traction current in Germany.

The Commission had concerns that Deutsche Bahn’s pricing for traction current would not have allowed equally efficient competing players to operate profitably in the German markets for rail freight and long-distance passenger transport (a so-called “margin squeeze”), in violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU).

The main purpose of the commitments was to enable electricity providers not belonging to the Deutsche Bahn Group to enter the previously monopolised market for the supply of traction current to railway undertakings. DB Energie committed to (i) grant electricity providers access to its network for supplying traction current and (ii) amend its pricing system. The design and implementation of the commitments proved successful. Within eighteen months of their entry into force, several energy providers have entered the traction current market. In 2015, they already supplied over half of the combined traction current demand of non-Deutsche Bahn railway companies.

The commitments were originally due to apply for five years. However, the Commission decision provided that they could end earlier if in one calendar year over 25% of the total traction current demand of non-Deutsche Bahn railway undertakings would be supplied by alternative energy providers. As this threshold was reached in 2015, the Commission has adopted a decision that ends the legal obligation of Deutsche Bahn to respect the commitments as from today.

A non-confidential version of the decision will be available on the competition website, in the Commission’s public case register under the case number 39678.

Procedural Background

Article 102 TFEU prohibits the abuse of a dominant market position in the internal market, in so far as it affects trade between Member States.

After unannounced inspections in March 2011, the Commission initiated formal antitrust proceedings in June 2012. In December 2013, the Commission accepted legally binding commitments from Deutsche Bahn. Further information on the commitments is available in the public case file.