A DECISION banning Eurotunnel from operating its MyFerryLink cross-Channel service from Dover has been confirmed by a UK monopolies watchdog.
Channel Tunnel operator Eurotunnel had appealed after the Competition Commission ruled last year that the Dover to Calais service was bad for the cross-Channel ferry market as it could lead to another company closing. The Competition and Markets Authority (which has replaced the CC) was asked to review the decision and also to confirm legal technicalities relating to its right to decide on the case.
The CMA has now concluded that the ruling was correct and that Eurotunnel should stop MyFerryLink services. Eurotunnel and MyFerryLink have said they will appeal again and services are expected to continue to run as normal.
In its final report the CMA said: “We reconsidered the question anew and with an open mind and invited submissions from the parties and sent a number of information requests. We have taken all of that carefully into account”.
The decision, confirming a provisional ruling in spring, restates the previous judgment that Eurotunnel will be given six months to stop running services from the date of an order to that effect (that has yet to be made). The company can also sell off the MyFerryLInk business.
Senior CMA official Alasdair Smith said: “With two of the operators on the Dover–Calais route making substantial losses, it remains our view that the current level of competition on the route is unsustainable and likely to lead to the exit of a competitor. That will leave Eurotunnel, which is funding MyFerryLink’s current losses, as one of only two ferry operators in addition to owning the competing rail link. Eurotunnel’s purchase of the ferries means it now has over half the market and its share will rise further if competitors exit.
“It would be much better for passengers and freight customers to have three competing cross-Channel operators – with Eurotunnel running the rail link and two independent operators on the ferry route.”
In 2012 Eurotunnel acquired the three ferries of the liquidated SeaFrance and started the MyFerryLink service in partnership with a cooperative of ex SeaFrance employees (known as a “Scop”).
As the hearing is now likely to be in the autumn, and any order starting the six-month notice period is almost certain to be placed on hold until it concludes, the saga is far from over and My FerryLink is expected to run as usual for some time – with passengers’ summer advance bookings unaffected.
A CMA spokesman said even that may not be the end to the matter as Eurotunnel and MyFerryLink might go to the Court of Appeal, whereas if the appeal tribunal finds against the CMA it may appeal in turn. In the meantime, the usual precedent is that the effects of the CMA ruling would remain on hold.
The CMA’s decision was condemned by French Transport Minister Frédéric Cuvillier, who noted that the French competition authority had authorised the service to run.
He said: “This judgement effectively condemns the company and its 533 employees in France and 71 in the UK - even though it’s an exemplary example of human relations and commercial success.”
He added: “The state is determined to use all means at its disposal to find a solution that allows the ships to continue to be used and to save jobs.”
The CMA spokesman said: “The company operates in both the UK and French markets and both authorities had the right to rule. The French did not take action and we have. Sometimes bodies just come to different decisions.”