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24/09 5 March 2009
The OFT has today launched a market study into the supply of local bus services.
This sector has become increasingly concentrated by takeovers, with nearly two-thirds of services now controlled by five large operators. The study will consider whether concentration in the market has a positive or negative impact on the prices consumers pay and the services they receive, and whether or not there is competition between operators bidding for tendered services.
John Fingleton, OFT Chief Executive, said: 'The OFT receives regular complaints about bus prices, service levels and a perceived lack of competition between companies bidding for tenders. At the same time many claim that even where there is competition it has failed to deliver improvements in local bus services. The study will test these issues against the available evidence.'
Initially the market study will focus on gathering and analysing data to help build a picture of how competition in the local bus sector works. The OFT will work with local authorities, bus operators and central and devolved government to collect information on the different models of competition in operation in local areas. The final duration and scope of the study will depend on the results of this initial phase.
The OFT will be contacting key parties directly. Other interested parties can submit written views, by 8 May 2009 to: email@example.com
or by post to:
Local bus services market study
Office of Fair Trading
2C/3, Fleetbank House
1. A decision may be taken to end the study after the initial phase, with the findings being used to inform the OFT's mergers programme and by local authorities when tendering for local bus services. The OFT could also continue with further work including, for example, more in-depth analysis of the state of competition and the drawing-up of detailed recommendations. If the study does proceed to a second phase, the OFT intends to complete it before the end of 2009.
2. Updates to the timetable for the study will be published on the market study page.
3. OFT market studies are carried out under Section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.
4. Market studies involve an analysis of a particular market with the aim of identifying and addressing any aspects of market failure from competition issues to consumer detriment and the effect of government regulations. Possible results of market studies include: enforcement action by the OFT; a reference of the market to the Competition Commission; recommendations for changes in laws and regulations; recommendations to regulators, self-regulatory bodies and others to consider changes to their rules; campaigns to promote consumer education and awareness; 'a clean bill of health' for the industry.
5. The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers can seek advice from the Consumer Direct website (tel: 08454 04 05 06).
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