IIRC they ended the DTAG transit agreement due to DTAG having unreasonable pricing requests for the renewed agreement (i.e. DTAG holding Hetzener hostage, you can read more about it here [1]. If you are interested you can still buy DTAG transit for your Hetzner servers via https://wiki.hetzner.de/index.php/Double_Paid_Traffic/en, do keep in mind however that this is a metered connection, not unlimited like for regular web traffic.
I know perfectly fine about this. It has nothing to do with being held hostage. DTAG simply wants to charge more money, which is just business. You can either pay it or not. Hetzner decided that it's not worth it for them, the victim is the customer, because you probably are only able to download with around 5mbps in the evening from a DTAG connection. The upgrade is not possible with their cloud services, so it's a nightmare if you are a DTAG customer.
The same as Level3 charges more than others (even though not as extreme as DTAG) because they think their pipes are premium.
Hetzner simply wants to pay less money, which is just business. You can either sell at that price or not. DTAG decided that it's not worth it for them, the customer is the victim, because you probably are only able to download at around 5mbps in the evening from a Hetzner server. The upgrade is not possible with their internet connection, so it's a nightmare if you are a Hetzner customer.
I mean, yeah, sure, it sucks for the customer. What I don't understand is your implication that this is Hetzner's fault. Both sides could accept the other side's conditions, neither side did, all of that is "just business".
What isn't "just business" is asking much higher prices than the competition for the same kind of service and expecting customers to buy it. And if you find that there are customers who do buy anyway, that's a hint that you are dealing with a monopoly situation, which is appropriately described as "holding people hostage".
Sounds like a nightmare to be a DTAG customer.. But why would all of us pay to subsidize DTAG when we want servers in Europe peered with our reasonable ISPs and there are plenty of French ones?
[1] https://www.golem.de/news/hetzner-und-netzneutralitaet-extra... (German)