Kohl Bill Would End Railroad Antitrust Exemptions

The Railroad Antitrust Enforcement Act of 2006 would let regulators and private parties challenge anti-competitive rail mergers and collective ratemaking.

Updated on Nov. 7, 2026 in Transportation

Kohl Bill Would End Railroad Antitrust Exemptions

Live Poll

Should federal antitrust law apply to railroads and stop them from raising rates unchecked?

On July 6, 2006, Sen. Herb Kohl introduced the Railroad Antitrust Enforcement Act of 2006 (S. 3612), which was referred to the Committee on the Judiciary. The bill would repeal antitrust exemptions that currently shield freight railroad mergers, acquisitions and collective ratemaking.

Why it matters

Captive shippers, who are served by only one railroad, have argued they face monopolistic practices and price gouging with no competitive alternative. Dairyland Power Cooperative's rates rose 93 percent on January 1, 2006, after a three-year rail contract expired, illustrating the stakes for such customers.

Dairyland Power Cooperative will spend about $75 million to ship $30 million worth of coal after its rates jumped 93 percent. Association of American Railroads figures show coal shippers' rates fell 35 percent, while a GAO report found rail rates declined over the past 20 years.

The players

Herb Kohl

Herb Kohl is a Democratic U.S. senator from Wisconsin who sponsored the bill to repeal railroad antitrust exemptions.

Russ Feingold

Russ Feingold is a Democratic U.S. senator from Wisconsin who co-sponsored the Railroad Antitrust Enforcement Act of 2006.

Dairyland Power Cooperative

Dairyland Power Cooperative is an electric utility headquartered in La Crosse, Wisconsin, whose rail shipping rates rose sharply after a contract expired.

The details

The bill would allow the federal government, state attorneys general and private parties to sue to enjoin anti-competitive mergers and acquisitions. It would also restore Justice Department Antitrust Division and Federal Trade Commission review of railroad mergers, which are currently exempt and reviewed only by the Surface Transportation Board. Sen. Russ Feingold co-sponsored the measure.

January 1, 2006: Dairyland Power Cooperative's rates increased 93 percent after a three-year rail contract expired.
May 2006: The Railroad Competition Act of 2006 (S. 2921) was introduced in the Senate.
July 6, 2006: Sen. Herb Kohl introduced the Railroad Antitrust Enforcement Act of 2006.

Market Landscape

The bill would move railroad mergers out of the Surface Transportation Board's exemption-based oversight and into Justice Department and Federal Trade Commission antitrust review. It targets collective ratemaking and mergers that the industry has long been shielded from scrutiny for under federal antitrust law.

Businesses that depend on a single railroad for shipping could see rates change depending on whether the bill's antitrust provisions are enacted. Shippers facing sharp rate increases, like Dairyland Power Cooperative's 93 percent jump, would gain the right to challenge anti-competitive practices in court.

The takeaway

Shippers who rely on a single railroad have limited leverage over rates, and the bill would give them new legal avenues to challenge price increases. Tracking how the bill moves through the Judiciary Committee will show whether those avenues are created.