EU Commission investigates state aid for DB Cargo

As of: 01/31/2022 4:14 p.m

Following a complaint from a competitor, the European Commission is investigating German subsidies to the rail freight subsidiary DB Cargo.

The European Commission has launched an investigation to investigate possible unjustified advantages that Deutsche Bahn subsidiary DB Cargo has over competitors. The issue at stake is “whether certain German support measures in favor of DB Cargo are in line with EU state aid rules,” the EU Commission said. Among other things, the Brussels authorities have “concerns” about the fact that Deutsche Bahn has been covering DB Cargo’s losses since 2012.

Competitor Complaint

The Commission received a complaint from a competitor that the subsidiary of Deutsche Bahn had an “unjustified selective advantage” over competitors. Despite losses, DB Cargo can invest in the modernization of vehicles, for example, without having to take profitability aspects into account. The EU Commission is responsible for controlling state aid granted to companies in the member states.

It is also being examined whether loans could be taken out particularly cheaply. As a state-owned company, Deutsche Bahn enjoys a particularly high credit rating and can borrow more cheaply than many of its competitors. DB Cargo has a market share of just under 50 percent in Germany.

Competitors are happy to respond

The Network of European Railways (NEE), the merger of the competitors, praised the investigation. “We have repeatedly heard from our members about incomprehensibly priced offers from DB Cargo and are looking forward to the result of the investigation with great anticipation,” said NEE boss Ludolf Kerkeling. Deutsche Bahn disagreed: “DB Cargo AG did not receive any aid that distorted competition. Deutsche Bahn always acted in accordance with European law.”

In December, the Commission approved state aid of 88 million euros to Deutsche Bahn. This should “allow Germany to compensate Deutsche Bahn for losses suffered by its subsidiary DB Cargo due to restrictions” during the corona pandemic, said Competition Commissioner Margrethe Vestager.

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