Until 2011, České dráhy (“ČD”) was the only railway operator on the Prague – Ostrava route. After two competitors entered that market, RegioJet in 2011 and LEO Express in 2012, ČD significantly decreased the prices it charged to passengers on the route. While price competition is a positive consequence of an open market, in the present case the Commission had concerns that ČD may have charged prices that are so low that it could not cover the costs of the service. Such practices can hinder competitors from remaining in the market to the detriment of passengers. Moreover, they are contrary to article 102 of the Treaty on the Functioning of the European Union that prohibits the abuse of a dominant market position which may affect trade between EU Member States. Such abuse may include “imposing unfair purchase or selling prices or other unfair trading conditions.”
The Commission already carried out inspections at the premises of ČD in April 2016. The opening of the investigation, formally announced on 10 November 2016, means that the Commission will treat the case as a matter of priority.
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