In November 2021, the Competition and Markets Authority (CMA) opened an investigation into an agreement between ferry companies P&O Ferries and DFDS A/S. This agreement – known as the ‘Capacity Sharing Agreement’ – provides a ‘get on and go’ facility for freight customers at the Ports of Dover and Calais, allowing them to catch the next available ferry, regardless the operator they booked with. The deal aims to reduce travel times and congestion at ports for freight customers, while delivering potential wider benefits for supply bottlenecks and the wider economy.
While the CMA recognizes the flexibility such an agreement allows, it is concerned that certain aspects of the companies’ arrangements could, if left unresolved, ultimately result in higher prices and fewer crossings.
For example, during the implementation of this agreement, P&O and DFDS created a single schedule to better space out company departures. However, as part of this, the companies have also cut some routes entirely from their schedules and documentation gathered by the CMA has shown that they plan to further reduce the number of departures in the future. Such behavior could result in higher prices and less frequent trips for both tourists and freight customers.
The CMA is also concerned that the agreement will encourage each company to cancel off-peak crossings at short notice, as this will allow them to retain customer revenue even if they are traveling on the other company’s ferry. Such cancellations would cause disruption to freight and tourist customers on the busy Dover-Calais route and could also result in higher prices.
Additionally, AMC believes the deal has the potential to fix the number of freight customers each company carries relative to the other. Setting amounts in this way would likely reduce companies’ incentives to win over customers by offering lower prices and better quality of service.
Following the intervention of the CMA, the companies offered to commit to:
- disagreeing on the number of crossings each company operates
- impose strict limits on the number of tee times they can cancel
- amend the agreement to clarify that it does not fix the amount of freight customers either company can carry
Michael Grenfell, Executive Director of Law Enforcement at CMA, said:
The “show up and go” feature offered by this agreement is undoubtedly a positive thing for customers. However, as the UK’s competition authority, it is essential that we review business coordination to ensure that it does not lessen competition.
We found that the deal between P&O Ferries and DFDS risked breaching competition law and could ultimately lead to higher prices and fewer crossings – which is why we intervened.
We have looked closely at the commitments offered by these companies and will also carefully consider any response to our consultation, to see if our concerns are addressed. If not, our investigation will continue.
The CMA will now consult on the commitments offered, which will provide an opportunity for third parties to express their thoughts or concerns. Any response must be made by 5 p.m. on July 4, 2022 and will be taken into account when the CMA considers the commitments offered by P&O and DFDS.
For more information, see Investigation into a capacity sharing agreement between P&O Ferries and DFDS.
Notes to Editors
- The competition law relevant to the CMA’s investigation is the Competition Act 1998. The prohibition in Chapter I of the Competition Act 1998 prohibits agreements, concerted practices and decisions of associations of undertakings which have as their object or effect the prevention, restriction or distortion of competition within of the United Kingdom or part of it and which may affect trade within the United Kingdom or part of it, unless excluded or exempted.
- The CMA can initiate an investigation under the Competition Act 1998 if it has reasonable grounds to believe that there has been a breach of competition law. If the CMA decides that a competition law violation has occurred, it can impose a fine of up to 10% of ESS’s worldwide turnover, as well as issue legally binding instructions to end the violation. offense.
- All journalists’ inquiries should be directed to the CMA Press Office by email at [email protected] or by telephone on 020 3738 6460.
- All inquiries from the general public should be directed to the CMA’s General Inquiries team at [email protected] or 020 3738 6000.