The UK’s Competition and Markets Authority (CMA) has won its appeal to the Supreme Court in the long-running legal battle over its ruling against Eurotunnel and cross-channel ferry service MyFerryLink.
In a judgment handed down yesterday, the Supreme Court ruled the CMA acted correctly in treating Eurotunnel’s acquisition of three former SeaFrance ferries as a merger under UK merger-control rules.
Dover-Calais ferry operator SeaFrance folded at the end of 2011 and Eurotunnel and a group of former SeaFrance workers organised as a co-operative, SCOP, acquired the company’s assets – including three ferries – in July 2012.
Eurotunnel and SCOP then restarted Dover-Calais ferry services in August 2012 using a Eurotunnel subsidiary, MyFerryLink.
The Competition Commission – forerunner of the CMA – imposed restrictions on this service, including a 10-year ban on former-SeaFrance ships operating from Dover.
That decision was referred to the Competition Appeal Tribunal and then remitted back to the CMA which confirmed the original ruling and restrictions on MyFerryLink.
Eurotunnel went to the Court of Appeal, which held in May that the CMA was not empowered to consider the acquisition under UK merger-control regulations. In a majority judgment, the Court of Appeal found the MyFerryLink partners had not acquired an “enterprise”, in the sense of a ‘going concern’.
The CMA appealed to the Supreme Court, which heard the appeal in October.
It ruled yesterday that UK merger-control provisions, enshrined in the Enterprise Act 2002, are not limited to the acquisition of a business that is a “going concern” but depend on whether there is ‘economic continuity’.
The CMA said it would consult and “seek to work constructively” with Eurotunnel to determine its next steps, given that Eurotunnel has now leased two of the former SeaFrance ferries to rival DFDS.