Competition Commission 'brushing aside' own evidence on market fixing

Thursday, November 24, 2011
Examining files - iStock photo

Increased threat from CC to use of Local Transport Act powers

In its formal response to the CC's recent revelations on the scale of market fixing by major operators in the North East, pteg has criticised the CC for 'brushing aside' their own findings to leave a weak set of remedies largely unchanged.

The CC’s report exposed hard evidence of operators carving up local bus markets behind closed doors and in their own interests. For example they quote one major operator telling another major operator: ‘The offer I’m making is that from whatever date you agree to come to the party we will do nothing that in any way causes you grief, and we will seek to implement changes to our mutual benefit.’

The pteg response says:

'we are surprised and alarmed by the casual manner in which the CC seems to have brushed aside what is significant evidence of market failure and has ruled out a more detailed investigation.'

The pteg response goes on to say:

'Given the severe implications of these findings and the real risk that they may be more widespread across the reference area, we feel that a much more robust and detailed consideration of the problem and of remedial measures by the CC is warranted.'

pteg Support Unit Director, Jonathan Bray, said:

'It has taken the CC a very long time to lift up a corner of the carpet to find out what's really going on in the bus industry. Now that they have done so, they have found an astonishing degree of ruthless and blatant market fixing to agree and defend local monopolies in the interests of profitability, not passengers. However it’s almost as if these devastating findings are an inconvenience to the CC who seem determined to stick to a weak set of remedies which have been greeted with almost universal scepticism about their ability to deliver the stable on-street competition that the CC is myopically fixated on. The CC's response to its own findings in the North East is to cast further doubt over the use of Local Transport Act 2008 powers in favour of theoretical solutions that may never be implemented. In our submission to the CC we argue that the logical response to the findings in the North East is to strengthen the powers in the Local Transport Act 2008 to ensure that where bus services are coordinated that it is done in the public and passenger interest.’

ENDS

For more contact Jonathan Bray on 0113 251 7445 / 0781 804 1485.

pteg’s response to the CC’s North East investigation can be found here