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OFT publishes updated ticketing schemes block exemption guidelines

169/06    30 November 2006

Following consultation with transport operators and groups representing operators and local authorities, the OFT has today published updated competition law guidelines on the public transport ticketing schemes block exemption.

Download the report Public transport ticketing schemes block exemption (pdf 299 kb)

Download responses to the consultation (pdf 111 kb)
 
The block exemption allows companies to offer travelcards and similar tickets (subject to certain conditions) when normally agreements between companies, which appreciably restrict competition, are prohibited by the Competition Act. Ticketing schemes meet the conditions for exemption because they save passengers time buying separate tickets and provide benefits including flexibility of choice, while helping passengers in small communities get through tickets to several towns.

The guidelines have been updated to take account of the amendments to the block exemption which came into force on 23 January 2006 and, secondly, to provide some further clarification as to how the OFT will apply the block exemption to public transport ticketing schemes.

The key changes and points addressed by the updated guideline published today include:

• updated guidance on how the OFT will apply Article 11 of the block exemption, which relates to the distribution of revenue from a multi-operator travelcard
• amended guidance to reflect the removal of the requirement, in relation to multi-operator individual tickets, for operators to offer both their own single and return tickets, and
• more detailed guidance on how operators can set the price of multi-operator travelcards.

The guidelines have been the subject of extensive consultation that began in May 2006, and the OFT envisages that it will review the operation of the block exemption before it expires in 2011. The guidelines relate to travel on UK bus, train, tram or inland ferry routes.

NOTES

1. The Competition Act 1998 (Public Transport Ticketing Schemes Block Exemption) Order came into force on 1 March 2001 and was amended by the Competition Act 1998 (Public Transport Ticketing Schemes Block Exemption) (Amendment) Order 2005 (SI 2005 No 3347). It covers ticketing schemes that provide multi-operator travelcards, multi-operator individual tickets, through tickets and add-on tickets for local travel on buses, trains, trams and domestic ferry services.

2. The Chapter I prohibition of the Competition Act 1998 prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition within the UK (or any part of it) and which may affect trade within the UK (or any part of it).

3. An agreement that falls within the Chapter I prohibition, but which satisfies the conditions set out in section 9(1) of the Competition Act 1998 can be exempted from the prohibitions. To satisfy the conditions set out in section 9(1) an agreement must contribute to improving production or distribution or promoting technical or economic progress and allow consumers a fair share of the resulting benefit; contain only restrictions which are indispensable to the attainment of those objectives, and not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products or services in question.

4. The block exemption sets out a number of conditions which a ticketing scheme must satisfy in order to benefit from it.

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