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Eurotunnel ban on owning MyFerryLink reinforced in provisional decision by Competition and Markets Authority backing the Competition Commission

20 May 2014
by Chris Price

Bosses are shaking their heads at cross-Channel operator MyFerryLink after a government body backed a decision to bar its owners from running the service.

The Competition and Markets Authority has provisionally confirmed an earlier decision by the Competition Commission to ban Eurotunnel from running ferries from Dover to Calais.

It says Eurotunnel has gained too much share of the cross-Channel market with its ownership of the Channel Tunnel and three vessels formerly owned by SeaFrance.

MyFerryLink leaving Dover Port

MyFerryLink leaving Dover Port

The operator acquired the vessels after the French company went into administration in 2012 and relaunched a ferry service later that year under the MyFerryLink brand.

In June last year, the Competition Commission decided Eurotunnel would increase its share of the market to more than half, likely leading to only two ferry operators running services on the route, causing price rises for passengers and freight customers.

That decision was briefly overturned by the Competition Appeal Tribunal in December, prompting the commission to reconsider whether the deal constituted a merger under UK rules.

In March, it provisionally ruled that was the case and the decision by the Competition and Markets Authority backs this.

A final decision is expected next month.

A Eurotunnel train

A Eurotunnel train

In a statement Eurotunnel said the government body had taken no account of changes in the market since it launched the service.

It said: "Two years after the acquisition of three ferries and following the decision of the Appeal Tribunal, which rejected the original decision by the Competition Commission, Groupe Eurotunnel submitted to the Competition and Markets Authority (CMA) that a material change of market had occurred, based upon the 12% growth since SeaFrance ceased its operations.

"Groupe Eurotunnel believes that, when stating that there has been no material change, the CMA simply seeks to justify the Competition Commission’s original analysis, despite the change in the facts relating to the market.

"[These are that] market growth has been far greater than the 2% predicted by CMA.

[Also, rival operator] DFDS continues to operate successfully in the market, whereas the Competition Commission's original decision was based on the premise that DFDS would rapidly be forced to exit the market.

"Groupe Eurotunnel believes that the CMA's preliminary decision is based upon an erroneous analysis of the significant changes in the cross-Channel ferry market since the Competition Commission's original findings relating to the market in 2012."

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