On 11 August, the Competition Commission announced that it has provisionally concluded that the completed joint venture between Stagecoach and Scottish Citylink may be expected to result, in a substantial lessening of competition in relation to the supply of scheduled coach services on certain routes within Scotland. The Competition Commission is now consulting on a range of possible remedies to address the competition concerns.
The Commission published its issues statement in the end of April following which it accepted interim undertakings from the parties in order to prevent any pre-emptive action which might prejudice the outcome of the reference.
On 11 August, the Competition Commission announced its provisional findings that the joint venture could lead to higher fares and reduced service levels for coach passenger due to the tie up of two companies which previously were in direct competition on a number of Scottish routes.
The parties have argued that, absent this joint venture, one or both of them would have withdrawn from the market within 12 to 24 months. The Competition Commission does, however, not consider that the parties have shown that the "failing firm" defence is met in the overall circumstances of this case.
The Competition Commission is now consulting on possible remedies, including divestiture and fares and services level obligations. The Commission invites views on the provisional findings and on the possible remedies by 4 September 2006.