The UK competition regulator has launched an investigation into a capacity sharing agreement between P&O Ferries and DFDS.
In May, the two ferry operators entered a mutual space charter agreement on the Dover-Calais route in an effort to shorten freight customers’ waiting times.
The agreement was also intended to help improve the flow of traffic on the trade route between the UK and EU.
However, the Competition and Markets Authority (CMA) confirmed on Friday morning that it will now launch a probe into the move.
We’re investigating whether an agreement between ferry operators P&O and DFDS could affect competition within the UK.
This is just the beginning of our work, which will allow us to establish whether or not the law has been broken.
— Competition & Markets Authority (@CMAgovUK) November 12, 2021
The CMA said it is investigating whether the agreement “has potential to prevent, restrict or distort competition within the UK.”
P&O Ferries operates five vessels on the Dover-Calais route while Denmark-based operator DFDS runs three.
In May, the firms said the agreement would be limited to freight traffic between Dover and Calais and would not extend to the Dover-Dunkirk route operated by DFDS.
Together, the two lines carry more than 2.5 million lorries across the English Channel every year, making it by far the busiest trade route between the UK and Europe, the firms said.
A DFDS spokeswoman said: “The CMA is investigating whether a capacity sharing agreement between two ferry operators, P&O Ferries Holdings Limited and DFDS A/S, on the Dover-Calais route has potential to prevent, restrict or distort competition within the UK.
“A cooperation between two competitors may always attract attention.
“We believe that the agreement will cut down waiting times for our customers and reduce queues in the ports.
“The CMA has not reached any conclusions at this stage as to whether or not competition law has been infringed and has an open mind at this point.
“We will of course cooperate with the CMA and provide all required documentation.”
P&O Ferries declined to comment.