Deutsche Bahn Seen as Antitrust Compensation Trailblazer

Deutsche Bahn AG’s offer to refund rail-power customers’ electricity charges paves the way for consumers to get compensation through European Union antitrust settlements.

The state-owned railway company offered last month to give rivals a “one-time” 4 percent refund in a bid to convince regulators to drop allegations it abused its market power to force competitors to pay too much for train electricity. It’s the first time a refund has been part of an EU settlement.

“There is no faster, fairer and better way to compensate the victims than to encourage direct compensation by the infringers,” Jose Rivas, the head of Bird & Bird’s EU and competition group in Brussels, said by e-mail. Deutsche Bahn’s offer may provide a template for settlements to channel funds to those harmed, said Werner Berg, an antitrust lawyer at Crowell & Moring LLP in Brussels.

EU officials, including Antitrust Commissioner Joaquin Almunia, have struggled for years to introduce concrete plans to make it easier for antitrust victims to sue in national courts. Enabling companies to make payouts as part of settlements with the European Commission may create a more efficient shortcut in many cases.

“Voluntary compensation of the victims makes so much sense that it is difficult to understand the resistance by the commission to include it” in Almunia’s damages plan, Rivas said.

Antitrust Victims

EU data reveal the difficulties faced by antitrust victims. In the last seven years, victims filed damages actions in only 25 percent of competition cases where the commission found infringements, according to the EU authority. The suits were mostly brought by large companies and in countries where the rules are seen as more favorable, such as in the U.K., the Netherlands and Germany.

Efforts to spur damages claims have progressed slowly through the EU’s bureaucracy. Almost 10 years went by between a study on the topic called for by the commission and the rules proposed by Almunia in June. The draft legislation is now under consideration from EU lawmakers.

The European Consumer Organisation, BEUC, said the Deutsche Bahn case highlights the need to create more compensation methods. BEUC, which supports expanded private lawsuits, said that EU statistics indicate that as much as 23 billion euros ($30.7 billion) in damages has gone unclaimed by victims each year across the bloc.

Almunia’s officials at the commission last year opened a formal probe into Deutsche Bahn’s DB Energie unit, the only supplier of traction current in Germany, to examine whether it offers discounts to its parent company, possibly putting rivals at a “competitive disadvantage.”

The Brussels-based authority is unwilling to label Deutsche Bahn’s refund-offer compensation.

Lower Price

Almunia’s spokesman, Antoine Colombani, said the money is designed to ease competitors into a new pricing system proposed by Deutsche Bahn.

“The one-time refund is meant to ensure that the companies would actually pay a lower price for a certain period,” Colombani said. “Commitments are only meant to ensure that the competitive process is safeguarded after they enter into force, thereby removing any competition concerns.”

The commission is currently testing the Deutsche Bahn’s concessions with competitors and has not signed off on them.

“The offer of commitments by DB Energie serves to end the case in a timely manner,” Gelfo Kroeger, the spokesman for DB Energie, said in an e-mail. “The commitments do not mean that DB Energie recognizes the unjustified claims by the EU commission.”

Even if the railway company’s offer is seen as a model for future settlements, it may struggle to win the approval of rivals.

Deutsche Bahn’s 4 percent refund offer is “a joke,” according to Wolfgang Meyer, the president of Mofair, an organization representing non-DB Group railway companies in Germany. A refund of around 20 percent would be more adequate, he said in a phone interview on Sept. 6.

To contact the reporter on this story: Gaspard Sebag in Brussels at gsebag@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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