THE Competition Commission in the UK has said that Eurotunnel's MyFerryLink cross-Channel service should be blocked from operating out of Dover.
The Commission said that Eurotunnel already enjoyed a large market share and its presence would lead to price rises for passengers and freight customers.
Eurotunnel has been given six months to divest its ships on the crossing between Dover and Calais, but has said it will appeal the decision.
Jacques Gounon, chairman and chief executive officer of Eurotunnel, said: "This decision by the Competition Commission will reduce the choice of services across the Straits of Dover to the detriment of the consumer. It will inevitably lead to an increase in the price of a crossing."
Eurotunnel bought three ferries and other assets from bankrupt SeaFrance in a €65 million deal and leased them back to a cooperative of former SeaFrance under the MyFerryLink brand to sail under the French flag.
The Competition Commission (CC) believes that Eurotunnel decided to acquire the SeaFrance ferries in order to prevent ferry operator DFDS/LD from buying them.
Eurotunnel was concerned that if DFDS/LD obtained the assets cheaply, it could drive down prices for customers. The CC also found that one of the three current ferry operators on the Dover–Calais route was likely to exit in the short term, if the CC took no action, in which case Eurotunnel could gain an even larger share of the cross-Channel market.
Chairman of the Eurotunnel/SeaFrance Inquiry Group and CC deputy chairman, Alasdair Smith, said: "It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 per cent, moves into the ferry business—particularly when it did so to stop a competitor from buying the ferries.
"Customers would lose out from Eurotunnel increasing its share even further and being able to raise prices on the tunnel services."