ORR's approach to complaints about excessive pricing

Office of Rail Regulation paper (15 pages, PDF) on its approach to analysing allegations of excessive pricing under the Competition Act 1998 or Article 82. This complements the plain English guide on complaints about rail fares and car park charges.

Comment. The paper rests in significant part on the assertion that:

22 ... high prices could not be illegal when the [train operating company] had competed away any supernormal profit by means of high premium/low subsidy payments at franchise let.

According to paragraph 13, this is consistent with the United Brands characterisation of exploitative abuse as behaviour to “reap trading benefits which it would not have reaped if there had been normal and sufficiently effective competition”. ORR appears to take the view that, whatever price is charged, if the money is passed on to Government then this guarantees that there has been no "reaping" by the train company in the United Brands sense. I am not so sure. Would this argument work for any commercial franchise operator passing on its abusive profits to its franchisor, or is it dependent on the fact that the franchisor is the Government? Franck

For further information or advice please contact Franck Latrémolière.

Filed under Article 82, ORR, Public transport.

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