The Competition and Markets Authority (CMA) is set to remove long-standing undertakings covering FirstGroup and local authority tendered bus services in the Greater Bristol area.
The undertakings had been put in place following the 1989 merger of local bus companies Badgerline and Midland Red West, which was investigated by the Monopolies and Mergers Commission (MMC), the CMA’s predecessor. The MMC ruled that the merger would remove competition for bus services contracted by the former Avon County Council.
Badgerline was subsequently renamed FirstGroup Holdings Limited (a subsidiary of FirstGroup plc) which then became subject to the restrictions, including a cap on the amount they could receive from the local authority for running a tendered service and a requirement to return any excess profit from such services.
The CMA has been reviewing the undertakings since January to see if there has been any change of circumstances which justifies their removal or variation.
The CMA found that FirstGroup’s share of tendered bus services in the region has reduced significantly since the MMC report and that in the most recent tender rounds, FirstGroup did not win any contracts at three of the four local transport authorities. The CMA engaged with local stakeholders, none of which said the undertakings were having a beneficial effect and should be retained.
The CMA has provisionally decided that there is no longer any need for the protection given by the undertakings. It is now consulting on this provisional decision and invites responses to be submitted at https://www.gov.uk/cma-cases/badgerline-merger-undertakings-review by June 30.
