- Introduction
According to a decision by the German Federal Cartel Office on June 26, 2023, Deutsche Bahn AG is in violation of antitrust law due to the company’s abuse of market power towards mobility platforms. The Federal Cartel Office has instructed Deutsche Bahn (DB) to change certain behaviors and contractual clauses.
- Deutsche Bahn as vertically-integrated company
Andreas Mundt, President of the Federal Cartel Office, stated, “As the vertically integrated state-owned corporation responsible for network operations and ticket sales, Deutsche Bahn is by far the dominant transportation company in Germany’s rail passenger transport sector. The services provided by mobility platforms, enabling integrated route planning for travelers, are inconceivable without the inclusion of Deutsche Bahn’s offers and traffic data. Therefore, Deutsche Bahn is subject to antitrust abuse control and has special obligations towards other companies. Specifically, this concerns the sharing of data, advertising bans, vertical price specifications, extensive discount bans, and the withholding of various commissions for third-party platforms. Without effective antitrust enforcement, the business models of mobility platforms cannot compete with Deutsche Bahn.”
Mobility platforms offer their customers comparative information for travel routes using different modes of transportation, as well as the booking of corresponding tickets and fares. The railway and DB’s transportation services play a crucial role in these platforms. For example, the platforms facilitate combinations of train tickets with flights, car-sharing, long-distance buses, or rental bikes.
On one hand, DB is the dominant railway transport company, and on the other hand, it operates as a strong mobility platform through its “bahn.de” portal and the “DB Navigator” app. According to the Federal Cartel Office’s findings, DB leverages its key position in transportation and infrastructure markets to restrict competition from third-party mobility platforms. Anticompetitive contractual clauses identified by the office include advertising bans, vertical price specifications, extensive discount bans, and the withholding of an agency commission. Additionally, the issue of whether DB should pay such a commission according to antitrust remuneration standards was under discussion in the proceedings after DB announced its intention to no longer pay a commission to mobility platforms for the sale of DB tickets.
- Access to mobility data will be granted
Furthermore, DB denies mobility platforms continuous and non-discriminatory access to all real-time traffic data controlled by DB, which is essential for organizing and booking journeys involving different modes of transportation (known as forecast data). This includes data on train delays, cancellations, additional stops, the reasons for delays or cancellations, extra services or replacement services, current track information, track changes, and major disruptions.
Although DB is obligated to share forecast data for passenger information under the new EU Passenger Rights Regulation effective from June 7, 2023, the Federal Cartel Office believes that this alone is insufficient to address the antitrust violation. The EU Passenger Rights Regulation does not cover all necessary forecast data and leaves important aspects of commercial and technical implementation in need of regulation.
Andreas Mundt stated, “An amicable conclusion to the proceedings failed due to protracted negotiations, primarily due to specific commercial conditions. Therefore, an official order is necessary to prevent potential practices of favoring DB’s own offers or imposing unfavorable conditions for accessing forecast data by the market-dominating Deutsche Bahn in the future. Additionally, Deutsche Bahn must modify a number of contractual clauses that impede mobility platforms as online partners. We aim to prevent Deutsche Bahn from extending its dominance in rail passenger transport to forward-looking mobility markets and stifling innovative mobility providers.”
- The Federal Cartel Office has imposed the following measures on DB
- Mobility platforms will be able to engage in online and app store advertising without contractual restrictions imposed by DB, even while using DB-specific terms.
- DB’s online partners will be able to offer their own discount promotions, loyalty point programs, or cashback schemes when selling train tickets. This ends any discrimination against DB’s own promotions utilizing these incentives. However, targeted discount promotions that may pose additional risks to DB’s capacity management are excluded from this provision.
- DB will be required to pay mobility service providers, responsible for booking and payment processing in ticket sales, a performance-based remuneration aligned with minimum antitrust standards. The same applies to the agency commission itself. The exact amount of commissions will be subject to negotiations between DB and its contractual partners and was not part of the proceedings.
- The provisions of the new EU Passenger Rights Regulation regarding the provision of forecast data will be supplemented, with detailed regulations on the implementation of commercial and technical conditions and opening access to third-party data. The access of third parties to data must be non-discriminatory and comparable to DB’s own data access.
- The cease-and-desist order primarily establishes regulations for the future to promote competition in smart mobility services. The specific details of the contractual arrangements and agreements will be left to the contracting parties, taking into account the constitutionally protected freedom rights of companies. Deadlines have been set for negotiations.
- The impact of these competition restrictions affects the interests of other transportation companies that are also present on the mobility platforms of DB’s online partners. Mobility platforms can be an important channel, especially for smaller and less well-known railway companies in Germany, to increase their reach and attract customers to their transportation services.
The decision of the Federal Cartel Office is not yet final. DB has the opportunity to appeal the decision within one month, which would then be decided upon by the Higher Regional Court in Düsseldorf. The Federal Cartel Office has published detailed FAQs regarding the decision in the railway case.[1]
[1]https://www.bundeskartellamt.de/SharedDocs/Meldung/DE/Pressemitteilungen/2023/28_06_2023_DB_Mobilitaet.html?nn=3591286