The railway carrier Leo Express will expand its lawsuit against České dráhy for their alleged application of predatory pricing, and will demand more than a billion crowns from the state-owned company as compensation for damages. This is more than double what the originally private company asked for by railways. Leo Express spokesman Emil Sedlařík informed about it today. RegioJet is also demanding compensation for damage in the hundreds of millions of crowns.
Leo Express thus responds to the preliminary conclusion of the European Commission from last week, according to which Czech Railways violates antitrust rules by charging prices below the level of costs. According to the railway commission, they applied them mainly on the line between Prague and Ostrava.
If ČD is unable to defend its progress in the competitive struggle, it faces a fine of up to ten percent of its annual turnover. According to the company’s annual report, this would mean about four billion crowns last year.
In response, the state carrier stated that the statement of objections was not a decision that would bindingly state that ČD had made a mistake and was obliged to pay a fine. The company also stated that it was not aware of the illegality of its conduct, which is to be confirmed by its evidence. The Board of Directors will now discuss the next steps.
According to Leo Express, the EC’s statement is key to the decision-making of domestic courts. The Commission provisionally stated that the tracks applied predatory pricing from 2011 to 2019. Leo Express has therefore now extended its action to another period. Instead of the original 468 million crowns, it will now demand at least 1.05 billion crowns on the tracks.
Another carrier that has criticized the railways for their prices is RegioJet. According to spokesman Aleš Ondrůj, he suffered damage of over 700 million crowns due to price pressure, and further losses were to stem from the distrust of banks due to the situation on the railway. “Currently, the company is not planning any new steps yet, according to Ondrůj, it will wait for the final decision of the EC.
The Commission opened an investigation in 2016 when RegioJet and Leo Express complained about prices allegedly intended to eliminate competition. In 2011 and 2012, they started offering their services on the backbone line between Prague and Ostrava, where at that time Czech Railways reduced the prices of its tickets below the level of costs. The railways have now been given a space to comment from the commission, and its representatives can examine the documents in the proceedings or request a hearing in Brussels.
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