Cardiff Bus: alleged abuse of a dominant position
| Case Outcome | CA98 - infringement Chapter II |
| Decision Date | 18 November 2008 |
| Date | 18 November 2008 |
| Court | Competition and Markets Authority (EW) |
Competition Act 1998
Decision of the Office of Fair Trading
No. CA98/01/2008
Abuse of a dominant position by Cardiff Bus
18 November 2008
(Case CE/5281/04)
Confidential information in the original version of this Decision has been
redacted from the published version on the public register. Redacted confidential
information in the text of the published version of the Decision is denoted by
[…][C].
CONTENTS
Page
1 INTRODUCTION
A Summary of the infringement 1
B Proposed action by the OFT 5
2 THE FACTS
A Introduction 6
B The regulatory background 7
C The two main parties 10
D Chronology of key developments 14
E The complaint 23
F The OFT's investigation 24
3 LEGAL BACKGROUND
A The Chapter II prohibition 28
B Application of section 60 - consistency with European Community law 29
C Application of Article 82 - effect on interstate trade 30
D Relevant case-law in relation to undertakings 30
E The concept of dominance 31
F The concept of abuse 32
G Effect on trade in the UK 34
H Burden and standard of proof 34
4 ASSESSMENT OF THE RELEVANT MARKETS
A Introduction 37
B A framework for establishing the market definition 37
C The focal products 48
D The relevant product market 57
E The relevant geographical market 80
F Conclusion on the relevant markets 83
5 DOMINANCE: ACTUAL COMPETITION
A Introduction 84
B Commercial and tendered bus operators 88
C Flow-by-flow analysis 93
D Network analysis 111
E Analysis of the potential for supply side substitution 117
F Conclusion on actual competition 118
6 POTENTIAL COMPETITION
A Introduction 120
B Potential competition from rail services 120
C Potential competition from bus operators 121
D Cardiff Bus' network 126
E Costs of entry 135
F Reputation for aggressive response to entry 143
G The history of entry and exit, and expansion plans 149
H Cardiff Bus' ownership and governance 152
I Conclusion on potential competition 155
J Overall conclusion on dominance 156
7 ABUSE
A Introduction 158
B Relevant conduct and legal framework 158
C The OFT's consideration of Cardiff Bus' conduct 162
D The rationale for Cardiff Bus' conduct 168
E Assessment of the evidence 173
F Analysis of costs and revenue 214
G Effect on competition 239
H Possibility of recouping losses 244
8 THE OFT'S PROPOSED ACTION
A Finding of infringement 249
B Directions 249
C Penalties 249
ANNEXES
1 Flow-by-flow analysis methodology 251
2 Supply side substitution 266
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