(MENAFN- AFP) Britain's Competition Commission on Thursday banned Channel tunnel operator Eurotunnel from running ferry services at the port of Dover, after concluding that its purchase of three SeaFrance ferries could spark higher prices.
"It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 percent, moves into the ferry business -- particularly when it did so to stop a competitor from buying the ferries," said commission deputy chairman Alasdair Smith in a statement.
However, Eurotunnel immediately announced its intention to appeal, arguing that the "incomprehensible" decision by the watchdog would in fact lead to higher prices and deprive Dover and Calais of "significant" revenues.
The operator of the Channel tunnel between Britain and France agreed to purchase the ferries from bankrupt ferry firm SeaFrance last year, and rebranded the service as MyFerryLink.
But the CC watchdog found Thursday that Eurotunnel, which operates the Channel tunnel rail link between Britain and France, had purchased the ships in order to stop rival ferry operator DFDS/LD from buying them.
The CC however said that, before the ruling is implemented, Eurotunnel would be granted a limited period during which to sell its two largest ferries in order to resolve the issue.
However, Eurotunnel slammed the reasoning behind the decision.
"Groupe Eurotunnel will immediately appeal this decision which the group finds incomprehensible and seriously disproportionate," it said in a separate statement.
"In reality this decision ... is not based on any concrete facts, but solely upon a random association of virtual hypothesis."
Eurotunnel argued that the ruling would transform "maritime activity across the Straits of Dover into a duopoly, thereby disadvantaging consumers".
The decision would leave DFDS and P&O as the main cross-Channel ferry operators.
Eurotunnel added that the CC decision ignored the ruling of a Paris court and was in contradiction with the decision of the French Competition Authority".
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