The Chairman of the Office Upheld the Decision in Carpathia Cartel Case, One of the Fines Subject to Reassessment

2021-01-28
The Chairman of the Office, Petr Mlsna, upheld the decision on a prohibited agreement in the field of rail freight transport, the so-called Carpathia Cartel. The Chairman of the Office upheld the first-instance decision of June 2020 on the merits, only the operative part of the decision on the fine amounting to CZK 10,000,000 imposed on ARGO LOGISTICS, s. r. o. was cancelled and the amount of fine shall be subject to reassessment of the first instance as its level was not sufficiently justified.

Petr Mlsna commented on the case as follows. “This case represents the so-called hard core restriction of the competition. These cartel agreements always distort the competition per se and are considered as the most serious threat to effective competition.”

According to the decision, AWT Čechofracht a.s., INTERFRACHT s.r.o., ARGO LOGISTICS, s.r.o., SPEDICA, s.r.o. and Rail Cargo Austria AG entered into a prohibited agreement in connection to rail freight projects called Carpathia, Sylvania and New Carpathia. On the basis of secret illegal cooperation, they allocated their customers and goods transport contracts, coordinated prices for these services and exchanged sensitive information. The cartel agreement distorted competition in the market of rail freight transport and forwarding services and was able to affect trade between the EU Member States as well. Rail freight transport companies in question infringed not only the Czech Competition Act but also Article 101 of the Treaty on the Functioning of the European Union.

The anticompetitive conduct of undertakings lasted between 2004 and 2013 (SPEDICA between 2008 and 2010, INTERFRACHT between 2010 and 2013). Cartel members entered into an agreement on cooperation concerning allocating of tenders. They operated reservation system in order to inform each other on the individual booked transport and their prices disabling the other participant of the agreement to offer lower price. Cartel members allocated their customers and coordinated their approach towards them.

Only INTERFRACHT and ARGO LOGISTICS filed an appeal against the first-instance decision. The Chairman of the Office dismissed their objections to a large extent; he considered only the objection of ARGO LOGISTICS on disproportionate fine as justified. This part of the decision was cancelled and the first instance will decide on the fine again.

 

Fines imposed

Rail Cargo Austria AG                                   fine not imposed (leniency)

AWT Čechofracht a.s.                                   CZK 1,826,000 (leniency II)

INTERFRACHT s.r.o.                                    CZK 2,357,000 (confirmed)

SPEDICA, s.r.o.                                             CZK 4,243,000 (settlement)

ARGO LOGISTICS, s.r.o.                              fine subject to reassessment of the first instance          

 

Press Unit of the Office

21/016

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