Dusseldorf It is a victory for European mobility start-ups against the dominant company in Germany: the Federal Cartel Office has warned Deutsche Bahn because it is abusing its market power over travel planning and booking platforms such as Omio, Trainline and Flixmobility (now: Flix). This would put the competing companies at an unacceptable disadvantage, as the authority announced on Wednesday.
“Many of these mobility services are unthinkable without the involvement of DB,” said Andreas Mundt, President of the Bundeskartellamt, according to the statement on the preliminary results of the investigations that began at the end of 2019. Among other things, the mobility platforms are entitled to real-time traffic data from the railways: “Otherwise the business models cannot work.” According to the Cartel Office, Deutsche Bahn can have the effort for the real-time data reimbursed, but not demand any additional fees.
With a market share of over 90 percent in long-distance and 70 percent in local transport, the state-owned company has an outstanding market position in transport. According to the Bundeskartellamt, it has largely given preference to itself when it comes to online sales of its services and door-to-door travel planning.
Mobility platforms such as Omio and Trainline include connection overviews and price comparisons of various train, bus or airline companies in their offers depending on the travel destination and offer services such as the cheapest connection directly with the booking.
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In addition to the refusal to release traffic data, the Federal Cartel Office has also investigated three other business practices of Deutsche Bahn: So far, the start-ups have not been allowed to advertise on search engines such as Google using Deutsche Bahn keywords, even though they are selling their products.
Unlike Deutsche Bahn itself, they were not allowed to offer any discount campaigns or bonus point programs for DB tickets. In addition, the platforms only received commissions for the sale of the tickets – regardless of whether they also took over the booking and payment processing for Deutsche Bahn.
The Cartel Office’s decision is provisional. The railways and the mobility service providers now have time to comment on this. Deutsche Bahn confirmed that it had received the draft decision from the cartel authorities. This will now be examined legally.
Deutsche Bahn is not threatened with a fine because of the warning.
(Photo: Trainline)
“It is important for travelers that the Federal Cartel Office sanctions the abuse of DB Sales’ position,” said a spokesman for rail rival Flix, which offers its own train connections with Flixtrain. “We see the Federal Cartel Office’s warning as an important step, but above all all providers must now be given access to bahn.de and the DB Navigator in order to create a sustainable and better rail travel offer.”
The state-owned company is not threatened with a fine because of the warning. But at the end of the proceedings, the cartel watchdogs can force the state-owned company to give up the aforementioned unequal treatment of its competitors. A spokesman for the mobility platform Omio told Handelsblatt that Deutsche Bahn’s business practices had “in the past made it impossible for the company to launch a competitive product in Germany.”
Omio CEO Naren Shaam welcomed the decision: “Companies like Omio will now have the opportunity to develop better products for customers that can finally enable smooth traveling and changing modes of transport,” he said in an interview with Handelsblatt. However, Shaam also stated that efforts are still being made to “establish a fair cooperation with Deutsche Bahn that makes economic sense for both sides.”
Deutsche Bahn: Difficult relationship with the competition
The international mobility platform Trainline also welcomed the preliminary decision of the Federal Cartel Office. It has the potential to unlock significant benefits for German rail passengers and accelerate modal shift, it said in a statement: “We will engage positively in the next step of the process to build a stronger partnership with Deutsche Bahn based on the principles of the same and fair treatment.”
Deutsche Bahn’s relationship with mobility platforms such as Omio and Trainline is complex: on the one hand, they are sales partners and sell DB tickets. At the same time, Deutsche Bahn’s services always compete with those of other providers.
As long as the cheapest ticket prices are only available from Deutsche Bahn itself, customers will only be offered DB’s own car-sharing service Flinkster during the booking process. If more customers book via other platforms, this could lead to customer dwindling at Flinkster – but at least the price pressure would increase. The same applies to the long-distance buses and trains from Flixmobility, which were much easier to compare with those of Deutsche Bahn on these portals.
In addition, the travel planning apps of the start-ups are serious competition for the DB “navigator”. Because on the Omio and Trainline platforms, customers can plan their trips more comprehensively than in the train app. Even those who first come to the larger train station by Flixbus on their way to vacation, then take the ICE to the coast, take the ferry and continue on the island with a rental car or e-scooter can plan the route seamlessly and choose from different providers and book everything together.
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Today, many travelers use car sharing, rental bicycles and e-scooters in addition to buses, trains and planes. The start-ups offer their customers easy and inexpensive access to this increasingly complex mix of mobility services.
The Deutsche Bahn warned business practices in detail:
- Advertising: Deutsche Bahn has so far prohibited other travel platforms from placing ads on DB terms in search engines such as Google. This means that they were not allowed to pay Google any money to be displayed at the top of the search engine if a user entered “Deutsche Bahn”, “bahn.de” or these terms in combination with words like “Flixtrain Comparison” or “Lufthansa “ had entered. In the opinion of the cartel guardians, only Internet users who already knew them and were looking for them directly could find the new services. The new mobility service providers could not have drawn attention to their route comparison options and seamless travel planning offers or discount campaigns. In addition to the new providers, this also harms travelers and other transport companies. The practice is now considered unfair.
- Discounts: Due to a ban by Deutsche Bahn, other companies have not been able to offer discounts and bonus programs that customers can use to save directly when booking a train journey or to purchase discounted tickets at a later date. However, such instruments are important for customer loyalty and were therefore not possible for the new competitors for a significant part of their offer. In the opinion of the cartel authorities, the fact that Deutsche Bahn itself operates such discount campaigns and programs on a large scale has not prevailed over the competition, but rather through unlawful behavior.
- Forecast data: A major point of contention between Deutsche Bahn and the start-ups is access to real-time data: in addition to arrival and departure times, there are train cancellations, rail replacement services, information on major disruptions and platform changes. While Deutsche Bahn displays this information on its own platforms and also shares it with various Google comparison platforms and the Rhein-Main transport association, it has rejected requests from start-ups such as Omio. In doing so, it gives itself a considerable competitive advantage in travel escort services.
- Commissions: Deutsche Bahn pays online partners commissions for arranging tickets. However, this is independent of the scope of the service. For example, mediation can include payment processing, various customer services and security measures to protect the DB systems. However, by paying the same commissions to all online partners, Deutsche Bahn distorts competition between the various online partners, according to the cartel authorities.
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