The OFT found that Fife Scottish Omnibuses tried to get rid of a competitor through predatory pricing and anti-competitive practices. It faced a reference to the Monopolies and Mergers Commission unless it gave undertakings.
Jim Moffat, managing director of Fife Scottish, had accused the OFT of half-truths and misrepresentation. Yesterday he continued to maintain that the OFT's report was inaccurate but said going before the Monopolies Commission would be a waste of resources.
The OFT found that Fife Scottish had run loss-making commercial services on routes already served under subsidy by Moffat & Williamson on behalf of the regional council.
Fife Scottish has agreed that for three years it will not increase the average fare on the routes investigated by the OFT by more than inflation, will not reduce frequencies on those routes without the OFT's prior consent, will tell the OFT about fare rises and service changes on the routes within seven days of the change having been made, and will not register new commercial services in competition with other operators' tendered services.
Sir Bryan said: 'While it must normally be to the benefit of all if bus services are operated commercially rather than with a subsidy from the local authority, in this case my investigation found that the services operated by Fife Scottish were not commercially viable and were operated with the intention of removing Moffat & Williamson from the market.'
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