Competition Report 2006 - Deutsche Bahn AG

42
Cartel Offi ce has its sights on market structure
In 2005, the Federal Cartel Offi ce gave the go-ahead for two key planned mergers in the rail freight sector.
A recent decision by the Federal High Court of Justice will have profound impact on the regional and local
passenger market. Mergers in the regional and local transport sector involving DB met with reservations.
Even under the strict standards
of the Federal Cartel
Offi ce, DB is entitled to
expand its corporate portfolio
by means of mergers.
The purpose of merger control is to keep markets open, preventing unfair scope
for some companies to act in a non-competitive way and ensuring comprehensive
protection of freedom of action for other companies. The Federal Cartel Offi ce has
sole responsibility for controlling the national market structure in Germany. It
dealt with the following proceedings during the period under review:
RBH purchase by Railion unobjectionable
In a decision of 30 September 2005, the Federal Cartel Offi ce approved the
purchase of RAG Bahn and Hafen GmbH (RBH) by Railion Deutschland AG, as the
transaction did not give reason to assume any impairment of the market situation.
Pursuant to the German Act against Restraint on Competition, a merger has to be
prohibited if it would create or strengthen a dominant market position of a company.
The takeover of RBH by Railion did not meet that criterion.
The Federal Cartel Offi ce based its decision on the assumption that the merger
essentially aff ected the national supply market for the transport of dry bulk
goods. The authority explicitly refused to include the sector of high-volume truck
transport of dry bulk goods in its decision. On the other hand, the Cartel Offi ce
believes that the takeover transaction in a market which is defi ned as above does
not entail any strengthening of the – alleged – dominant position of Railion.
According to the authority’s investigations, Railion will gain only a minimal additional
market share when it takes over those transports which RBH currently provides
on behalf of third parties. Moreover, the merger will neither protect market shares
in an anti-competitive way nor generate an increase in resources which are relevant
for competition. The Federal Cartel Offi ce consequently approved the merger.
Lead decision for the regional and local transport market by BGH
In its decision of 7 February 2006, the Federal High Court of Justice (BGH) ruled
that merger control provisions also apply to mergers between companies which
provide transport services in the sector of regional and local rail passenger transport
or local public road transport. As reasons for its decision, the court stated
that neither the fact that local transport cooperative ventures are exempt from
the ban on cartels nor that the provision of scheduled transport services has to be
approved by the authorities and can, under public law, be imposed on a company