A small Czech transportation startup has filed a formal complaint with the European Commission to investigate the country’s 100-year-old, state-run railway company for allegedly slashing prices to drive out competitors.

LEO Express accused České dráhy, known in English as Czech Railways, of cutting prices by half on rival routes between 2011 and 2014, while guarding prices on routes where it does not face competition and where it enjoys government subsidies.

Czech Railways received around 300 million Czech crown (just over €11 million) of unfair state subsidies last year, LEO alleged.

What’s more, the bus and train company suggested the old monopoly has been shielded from investigation by political connections within the government, the courts and the national competition authority.

“LEO and the other private service operators are suffering serious economic damage, which, if not recognized and stopped quickly, can take existential dimensions,” reads a briefing paper LEO circulated among members of the European Parliament this month.

LEO’s complaint comes as MEPs debate a wide-ranging reform of railway regulation that would make it easier for challengers to enter Europe’s €73 billion railway sector. The proposal would guarantee access to train tracks and force big operators to be more transparent.

Czech Railways, which carried 170 million passengers in 2014, booked 37 billion Czech crona (€1.4 billion) revenue last year. That dwarfs LEO Express, which reported revenue of just 178 million Czech crona (€6.5 million).

A spokesman for Czech Railways said LEO’s claims were “unfounded” and pointed to a national court decision earlier this month dismissing them.

The Czech Transport Ministry also rejects LEO Express’s claims, saying it wanted to encourage competition and didn’t play favorites.

But LEO is not the only company with a grudge against Czech Railways. Regiojet, another challenger on the Czech market, has filed similar charges in Czech courts and with the country’s competition authority. Regiojet is suing Czech Railways for 700 million Czech crown (around €25 million) in lost revenue, and that case is still pending.

LEO launched train service between the Czech capital Prague and the country’s third largest city Ostrava in 2012, buying a fleet of modern, fuel-efficient trains. Regiojet launched its own service a year earlier.

Underlying LEO’s complaint are concerns about whether the Czech competition authority or courts are able or willing to investigate accusations against well-connected Czech Railways.

“The Czech Antimonopoly Office […] has not yet rendered any decision even after several years of investigation [and] struggles to obtain the relevant data” from Czech Railways, according to LEO Express’ complaint to the Commission.

There are “lines connecting” the Czech competition authority to the governing Social Democrat party, according to Aleš Ondrůj, Regiojet’s spokesman.

In the Czech Republic, the head of the competition authority is proposed by the government and appointed by the country’s president.

The case may attract intense interest from the European Commission, which last month floated reforms to ensure national governments cannot influence the work of competition authorities.

Margrethe Vestager, the European Commissioner for competition, expressed concern in a November speech that certain national “authorities […] don’t have strong guarantees of their independence and impartiality.”

That does not apply to the Czech competition authority, says its spokesman. “There were many objective reasons why the [LEO Express] case took so long,” says Martin Svanda. He declined to comment on allegations of undue political influence but added, “We decide independently.”

The Commission declined to comment on the complaint.

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