9th Feb 2005 07:00
Competition Commission09 February 2005 News Release 10/05 9 February 2005 FIRST GROUP/INTER CITY EAST COAST INQUIRY Statement of issues The Competition Commission (CC) has today published an issues statement as partof its inquiry into the anticipated acquisition of the InterCity East Coast(ICEC) franchise by FirstGroup plc (FirstGroup). The CC has been asked to consider whether the acquisition may be expected toresult in a substantial lessening of competition in the supply of passengertransport services in the ICEC area. FirstGroup currently operates Hull Trains, and the Scotrail and TransPennineExpress franchises as well as being the principal bus operator in a number ofurban areas served by the ICEC train services. FirstGroup is one of fourcompanies bidding for the ICEC franchise. Following the evidence received so far, the inquiry group (the Group) intends toconcentrate principally on issues relating to the overlap between rail servicesoperated by ICEC and Hull Trains (between Hull and London) and on issuesrelating to the common ownership of the ICEC franchise and local bus servicesserving ICEC train stations, such as whether the owner would be able to use itsposition to disadvantage other operators of bus and train services. The issues statement follows the initial process of gathering information, viewsand evidence and identifies clearly for all interested parties the specificquestions and areas the inquiry will be examining. This will form the basis forthe hearings with FirstGroup and other interested parties. The full statementraises issues concerning: (a) the relevant markets; (b) the extent of competition between rail services in the ICEC area and the effect of the merger on that competition; (c) the extent of competition between rail and bus services in the ICEC area and the effect of the merger on that competition; (d) Common ownership of the ICEC franchise and bus networks in urban areas served by ICEC train services. (e) Current and potential competition from other operators of public transport services, including prospects for entry. (f) Whether the merger may be expected to result in a substantial lessening of competition. (g) Any customer benefits that might arise from the merger. If the Group considers that the merger may be expected to result in asubstantial lessening of competition, it will consider whether and, if so, whatremedies might be appropriate, issuing any remedies statement, should this berequired, at about the time it publishes its provisional findings. The issues statement should not be seen as implying that the Group hasidentified any competition concerns-the CC has yet to reach any conclusions onthis inquiry. The purpose of making the statement of issues public is to informall interested parties and give them an opportunity to raise any further pointswith the CC. The full issues statement is available on the CC web site at www.competition-commission.org.uk/inquiries/current/firstinter/index.htm. The CC would like to hear from all interested parties, in writing, by 23February 2005. To submit evidence, please write to: The Inquiry Secretary (FirstGroup/ICEC) Competition Commission Victoria House Southampton Row LONDON WC1B 4AD or email: [email protected]. The CC will now continue to gather evidence in this inquiry and will publish itsprovisional findings according to the administrative timetable available on theCC web site. Notes for editors 1. The acquisition of a rail franchise is treated as a merger under the Railways Act 1993. 2. The inquiry was referred to the CC by the Office of Fair Trading (OFT) on 22 December 2004. The CC is required to publish its final report by 6 June 2005. 3. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million. 4. The FirstGroup/ICEC Inquiry Group consists of five members: Diana Guy (Group Chairman), Laurie Elks, Tony Hadfield, Bruce Lyons and Peter Stoddart. 5. Enquiries should be directed to Francis Royle, Press Officer, 020 7271 0242 or Rory Taylor on 020 7271 0488/ [email protected]. 6. The full text of the OFT's referral of this case can be found on the OFT web site at www.oft.gov.uk. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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