Th e Competition Appeal Tribunal (CAT) has given its ruling on the appeal by Stagecoach against the Competition Commission’s (CC) final report blocking the Stagecoach/Preston Bus Limited (PBL) merger. Stagecoach brought its appeal on a number of different grounds. The CAT concluded that the CC had applied the correct legal test in considering the counterfactual (i.e. what would have happened had the merger not occurred). However, the CAT concluded that the CC had acted irrationally in its choice of the counterfactual, and there was no factual support for the CC’s assertion that Stagecoach’s management were not concerned whether the new routes would be profitable. The Judgment is particularly important as it is the first time that the CAT has  upheld an appeal against the CC’s substantive competition assessment. The CAT will now hear submissions from the parties regarding an appropriate remedy.

Stagecoach’s grounds for appeal

Stagecoach challenged the CC’s decision to block the acquisition on four grounds:

  1. the CC erred in its assessment of the effects of the merger under s35 of the Enterprise Act;
  2. the CC acted unreasonably in making findings of fact which were unsupported by evidence;
  3. the CC acted in a procedurally unfair manner; and
  4. the remedy imposed by the CC was disproportionate