CHANNEL TUNNEL operator Eurotunnel is to appeal against a ruling which will prevent its operation of ferry services to Dover. The Competition Commission has stepped in after Eurotunnel took over the failing ferry company SeaFrance, but Eurotunnel is claiming that Cross-Channel prices are now set to rise.

The Commission said Eurotunnel's acquisition of three ferries and other assets could mean higher prices for cross-Channel passengers and freight customers. It added that by adding ferry services to its existing Channel Tunnel business, Eurotunnel was increasing its market share to more than half.

Eurotunnel said it found the ruling 'incomprehensible and seriously disproportionate', and that the decision was 'not based on any concrete facts, but solely upon a random association of virtual hypothesis'.

It also accused the Commission of creating a 'duopoly' across the Straits of Dover, reducing customer choice, and prohibiting access to a port 'in total contradiction with the freedom of movement incarnate in Europe'.

The company added that the Commission was ignoring a ruling of the Paris Commercial Court which had linked the sale of SeaFrance with a requirement not to resell its assets within five years, and that a decision of the French Competition Authority was being contradicted.

Eurotunnel's chairman and chief executive Jacques Gounon 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."

The Commission's deputy chairman Alasdair Smith led the inquiry into Eurotunnel's ferry service.

He 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.

"In view of the current excess capacity on the Dover–Calais route, it also seems likely that one of the current ferry operators will exit in the short term if we don’t take action. Customers will be better off if there are two independent ferry companies competing with the tunnel.

"We did consider ordering Eurotunnel to sell the ferries but we were conscious of the uncertainties and possible delays affecting a sale. We can achieve the same outcome this way and it should be clear that we will not be diverted from ensuring the best result for customers."

The Commission added that Eurotunnel now has a 'limited period' in which to sell its two largest ferries to one or more purchasers approved by the Commission, as a way of solving the competition problem