Thursday, 3 November 2011

Collusion Between Bus Companies?

Arriva livery but Go North East stickers following an exchange of vehicles,
depots and routes in North East England.
In a surprise move, the Competition Commission has published an addendum to the provisional findings of its local bus services market investigation showing that some large bus companies, particularly in the North-East of England, have taken action which had an adverse effect on competition.
The evidence seen by the Commission shows that this segregation was brought about by extensive communication between certain Large Operators, signalling, retaliation to entry through competitive responses on other routes, and the sale and acquisition of rivals’ assets.
The evidence has been gathered from company documents and from hearings with past and present executives of the companies involved. Similar patterns of behaviour, most clearly retaliatory conduct, have also been identified in other areas.
The paper is an addition to the CC’s provisional findings which were published in May this year. Jeremy Peat, Chairman of the local bus market investigation Group, said:
"One of our main concerns in this investigation has been the number of areas where one company has faced little or no competition over an extended period of time. In August we noted that bus operators may have the incentive to avoid competing in each other’s territories. We have now found that some large bus companies have gone about their business in ways that adversely affected competition in some areas as we feared.
We have found evidence of a clear perception among some operators that some areas ‘belong’ to a particular company and of behaviour designed to maintain that situation, particularly threats of retaliation when attempts are made to encroach on their territory."
http://www.competition-commission.org.uk/press_rel/2011/november/pdf/58-11_press_release_for_provisional_findings_on_geographic_market_segregation_1.pdf

David Gambles

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