Czech Railways given record fine for unfair competition

Tomáš Fránek
18. 7. 2008 10:00
The company offered lower prices to some clients
Foto: České dráhy

Brno - One of the highest fines ever given in the Czech Republic was issued to the Czech Railways (ČD) transport company.

The Office for the Protection of Competition (ÚOHS) ruled that the company has to pay CZK 270 million (EUR 11.25 million) for exploiting its dominant position on the Czech transportation market.

Preferential treatment

According to ÚOHS, ČD broke both Czech and European law. In 2003-07 the company set different prices for different customers, giving preferential treatment to some of them.

More convenient offers were aimed at those clients that were also offered services by competing transporters. ČD prevented Spedit trans and Šped-Trans Levice from offering special discount tariffs in such a way.

Czech Railways allegedly harmed all customers since most of them were asked to pay higher prices. 

No mistakes

The company may appeal against the decision. "The situation has changed. The same practices are not being carried out since the beginning," explained head of the office Martin Pecina.

"So far, we are still waiting to receive official reasoning for the decision," Czech Railways communication manager Radek Joklík told Aktuálně.cz.

"We are not aware of any mistakes made by freight transport section of Czech Railways four years ago. We will be able to say more, though, when we study the office's report," Joklík said.

Trucks pose tough competition

Freight transport has always been a valuable asset of Czech Railways. Until recently, profits from freight transport were used to cover losses in passenger transport section of the company, which amounted annually to about CZK 600 million (EUR 25 million). Last December, a subsidiary ČD Cargo was founded that took over freight transportation.

Czech Railways is the company that will be fined though.

Joklík argues that Czech Railways does not have a monopoly over cargo transport market, with truck transport posing serious competition. Truck transport allegedly amounts to 75 percent of the market, with railway having only 22 percent share.

 

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