Services axed after a competition commission ordered divestment

[robertclark125]

First of all, moderators, if you feel this should be in another section, please fell free to move it.

Let's suppose bus firm A is competing with coach firm B on routes in a town, and eventually A buys B. But the OFT refers the takeover to the competition commission, who rule A must divest B to provide competition. So, A divests it to another coach firm, C. This includes all the vehicles, say 30 for instance, and all the services and contracts.

Then, three months later, C decides to withdraw all local bus service work and concentrate on more lucrative coach hire and contract work, and states that it's better placed to do coach hire than local service work. This means that bus firm A has a monopoly again.

In that situation, can the competition commission take any action against coach firm C?

 

[Robertj21a]

First of all, moderators, if you feel this should be in another section, please fell free to move it.

Let's suppose bus firm A is competing with coach firm B on routes in a town, and eventually A buys B. But the OFT refers the takeover to the competition commission, who rule A must divest B to provide competition. So, A divests it to another coach firm, C. This includes all the vehicles, say 30 for instance, and all the services and contracts.

Then, three months later, C decides to withdraw all local bus service work and concentrate on more lucrative coach hire and contract work, and states that it's better placed to do coach hire than local service work. This means that bus firm A has a monopoly again.

In that situation, can the competition commission take any action against coach firm C?

No.

Why should the CC get involved ? - it's an operator giving up routes.

Robert

 

[david16]

In many cases if a commercial bus service is axed to suddenly soon leave passengers with no bus service at all, the local authority SPT would step in and make sure there is a service on tender it was proven to be essential.

A bus company is entitled to cancel commercial bus routes as they see fit. They have to give a certain amount of notice to alert local authorities or PTE's to give them time to offer a replacement service on tender so that affected passengers suffer no loss of service after the commercial service withdrawl.

 

[Tom B]

A firm who I shan't name were well-versed in keeping hold of routes despite a "competitive" tendering process.

They would state that route X is not profitable - the authorities have no way of challenging this, so they put it out to tender. If the firm wins, great, they keep the route running with public subsidy. If not, they suddenly declare they will run it commercially still and the tender is therefore cancelled as a tendered service is prohibited from "competing" with a commercial one.

Or they would declare that part of a given service was not viable - e.g. half of the route - and only that part be put out to tender. Obviously very few people are going to bid for a dog-leg route unless they are the operator who runs the other half!

 

[robertclark125]

What I was meaning was that the coach firm and bus firm A ran competing services, and after A bought B, it had to sell B, and as a result, coach firm C buys it, but then withdraws B's services, leaving the rival services of A to have the monopoly, doing this only three months after the sale the CC required.

 

[overthewater]

after three months it would be 90 odd days so the company can do what it likes but it would still take another two months before the services are gone, thus it would be 6 months. CC could not do a thing.

 

[Robertj21a]

What I was meaning was that the coach firm and bus firm A ran competing services, and after A bought B, it had to sell B, and as a result, coach firm C buys it, but then withdraws B's services, leaving the rival services of A to have the monopoly, doing this only three months after the sale the CC required.

Yes, that's what you said before.

The answer is still No !

Robert

 

[Deerfold]

after three months it would be 90 odd days so the company can do what it likes but it would still take another two months before the services are gone, thus it would be 6 months. CC could not do a thing.

I make that 5 months...