Competition Commission finds anti-competitive features in UK local bus market

The CC has provisionally found that some features of the local bus market have an adverse effect on competition.  

The CC has found that there is little overlap between the services offered by different operators (i.e. on different routes) and limited potential competition in the wider local area. In addition, the CC found there is a range of barriers to entry, including unpredictable and substantial costs.

The CC also investigated the markets for the tendering of contracts for supported local bus services, and provisionally found competition concerns in local markets because the number of operators bidding for Local Transport Authority (LTA) contracts and the intensity with which operators compete for these tenders can be limited by the way LTAs design tenders and/or the limited number of potential bidders in local areas.

The CC has consulted on possible remedies, including measures to increase the number of multi-operator ticketing schemes, reductions in fares, fair access to bus stations and recommendations in relation to tendering guidelines. The CC will publish its final report by January 2012. 10 May 2011

OFT considers referring auditing market to the Competition Commission

The OFT is considering whether to refer the external auditing market to the CC after finding that there may be competition concerns in the market.

The OFT has stated that it has been concerned for some time that there are only four large players in the market, with substantial barriers to entry and switching. Having decided that there are reasonable grounds for suspecting that some features of the market restrict, distort or prevent competition (the statutory test for referral to the CC) the OFT will now discuss with interested bodies whether, in practice, potential remedies exist before making a final decision on referral to the CC later this year. 59/11, 17 May 2011