17th Nov 2006 07:00
Office of Rail Regulation17 November 2006 Office of Rail Regulation makes finding of anti-competitive behaviour againstEnglish Welsh and Scottish Railway Limited. 17 November 2006ORR/33/06 We have today notified EWS of our decision that the company has infringed theprohibition contained in Chapter II of the Competition Act 1998 and Article 82of the EC Treaty. The decision is based on our findings that EWS concluded contracts whose termshad the effect of excluding competitors from the market for coal haulage by railand that it had also pursued discriminatory and predatory pricing practices inthe same market. EWS has accepted our findings as set out in the infringement decision. Itsdecision to accept our findings has allowed us to resolve this case more quicklyand effectively than would otherwise have been the case. We have therefore takenaccount of this co-operation in setting the penalty of £4.1 million, to beimposed on EWS. We are also issuing certain directions to EWS and other parties to remove thecontractual terms found to have an exclusionary effect. Notes for Editors 1. We exercise powers under the Competition Act 1998 (the Act) concurrently withthe OFT in respect of agreements or conduct which relate to the supply ofservices relating to railways (see section 67(3) of the Railways Act).2. The Act contains two prohibitions:i. Chapter I prohibits agreements between undertakings, decisions byassociations of undertakings or concerted practices which have the object oreffect of preventing, restricting or distorting competition in the UK (or anypart of it) and which may affect trade within the UK (or any part of it);andii. Chapter II prohibits conduct by one or more undertakings which amounts tothe abuse of a dominant position in a market which may affect trade within theUK ( or any part of it).3. The EC Treaty and the Act both prohibit companies from abusing their dominantposition. EC Regulation 1/2003 (the Modernisation Regulation), which entered into force on 1 May 2004, requires us, as a national competition authority of aMember State, to apply Article 82 as well as the Chapter II prohibition, wherethere is an actual or potential effect on trade between Member States.4. In calculating the financial penalty, ORR has had regard to the OFT'sGuidance as to the appropriate amount of penalty. The final amount of thepenalty may not exceed 10 per cent of the worldwide turnover of an undertakingin the preceding business year (or 10 per cent of its UK-wide turnover in thefinancial year preceding the date when the infringement ended if prior to 1 May2004). The penalty takes account of the requirement in the Guidance that apenalty must reflect the seriousness of the conduct involved and serve to deterfuture infringement of the Act. The Guidance also sets out a number ofaggravating and mitigating factors which can merit an adjustment to the initialassessment of the appropriate penalty. ORR has found no such factors over andabove that of EWS's co-operation in respect of which it allowed a 35%discount from the penalty.5. ORR undertook its investigation of EWS's conduct following complaintsfrom Enron Coal Services Limited in 2001 and Freightliner Heavy Haul in 2002.ORR issued a Rule 14 Notice to EWS that it was minded to make an infringementdecision in May 2004. EWS made detailed representations to ORR in response tothat notice in November 2004. ORR issued a further supplementary notice in March2006 to which EWS submitted a response in June 2006.6. A non-confidential copy of this decision will be available on the ORR websitein due course. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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