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BRUSSELS: The European Commission (EC) has fined DB Schenker and Express Interfracht (EI) – now rebranded Rail Cargo Logistics – a total of €49.15 million for marketing a rail cartel in Western and Central Europe between 2004 and 2012.

Kuehne + Nagel (K+N), also part of the cartel, avoided paying a €62 million fine as the whistleblower. The EC reduced the penalties for DB Schenker and EI from a potential €50 million and €35 million respectively in exchange for their cooperation.

EC Competition commissioner Margrethe Vestager commented: "I find it very disappointing that a project to enhance transport efficiency and promote environmentally friendly cargo transport was derailed into a cartel. The European Union needs rail cargo markets to function efficiently on the basis of effective competition and not to be hijacked by vested interests to the detriment of customers."

ExpressInterfracht Mueller 620The DB Schenker Code of Conduct, updated in 2014, declares: "We abide by the applicable competition regulations and do not reach any arrangements or agreements which affect prices and/or terms and conditions or which in any other way illegitimately restrict fair competition."

A year earlier, the EC discovered DB Schenker and the other two companies had colluded when operating 'Balkantrain', a block train connecting Western, Central and Southeast Europe; and 'Soptrain', a similar service linking Central Europe with Romania.

In order to limit competition between them, the EC says DB Schenker, K+N and EI - part of Austria's rail company OBB - agreed and allocated existing and new customers; exchanged confidential information on specific customer requests; shared transport volumes contracted by downstream customers; and fixed prices by providing each other with cover bids for customers protected under their customer allocation scheme.

In imposing the penalties the Commission noted "the serious nature of the infringement, its geographic scope and its duration" while adding the amount would be an appropriate deterrent while "remaining proportionate".

DB Schenker appeared to take a different view back in December 2014 when it announced it was suing a group of airlines US$3 billion in U.S. and German courts for allegedly operating a cartel. Meanwhile, in the same month, it agreed to pay US$8.75 million to settle a similar complaint against it by a group of shippers.

In March this year its parent company issued a follow-up statement in respect to the airline litigation: "Deutsche Bahn can confirm that its logistics subsidiary, Schenker AG, has dismissed its claims against Nippon Cargo, SAS and Cargolux in the air cargo cartel lawsuit brought in the Eastern District of New York."

The German lawsuit continues.

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