Tuesday 07 January 2014
My Ferry Link has been granted a reprieve by the UK courts, but the standoff with the UK Competition Commission may not yet be over.
Following the purchase of the SeaFrance ferry operations by Eurotunnel in June 2012 there has been an ongoing battle with the UK competition authorities who consider that the purchase by Eurotunnel has given it too dominant a position in the market place.
As a result, in June 2013 the Competition Commission ordered Eurotunnel either to sell its two My Ferry Link passenger ships or be prohibited use of the port of Dover.
Eurotunnel appealed the decision to the Appeal Tribunal (CAT) and, in judgement rendered last month, the tribunal quashed the decision of the Commission, which it referred back to them for further consideration.
The Commission have never previously lost a case of this nature in the courts. No deadline has been set for a review or for a new hearing.
A spokesperson for the Commission stated to us that:
“We have been supported by the CAT on many of the grounds on which the challenge was made – such as fairness of process, assessment of evidence and the choice of remedy. "
"Where the Tribunal has found against us is on a legal point relating to the unusual circumstances of the acquisition, namely whether Eurotunnel had acquired an asset or an enterprise."
“We will now study the judgment carefully and consider how best to address the issue remitted back to us for further consideration by the CAT.”
At issue is whether the Commission acted within its jurisdiction in arguing that the purchase of the Sea France ships amounted to a merger of two companies, or whether Eurotunnel merely purchased the assets of the former cross-channel company.
The notion of a fusion is contested by Eurotunnel and the workers cooperative, who lease the ships from the rail group, and refute that Eurotunnel has any influence on SCOP.
Much of the pressure on the Competition Commission has come from the two other cross-channel ferry operators, P&O and DFDS, who consider there is over-capacity on cross-channel routes, and that through My Ferry Link, Eurotunnel is able to set prices artificially low to gain market share.
My Ferry Link currently holds a 11% share of the freight market and 8% of the passenger traffic.
The cross-channel route is one that since 2005 has already claimed three carrier victims - SeaFrance, Hoverspeed and SpeedFerries – all of whom succumbed to commercial failure.
Matt Davies, Managing Director of the leading on-line ferry ticket agency Direct Ferries says, “There is no doubt that the presence of My Ferry Link in the market has been very beneficial for consumers, for we have been able to offer some very attractive rates throughout the year.”
The competition inquiry is not the only problem for My Ferry Link, for, as we reported last year, there is an on-going police investigation into the works council - the comité d’entreprise – with accusations of embezzlement and fraud involving three leading local officials being made by the directors of SeaFrance.
The allegations involve funding of travel expenses and granting of interest free mortgages. The three officials were recently arrested by the police.
Two of these former officials now work for the comité d’entreprise at My Ferry Link.