South West Trains price cap agreed to keep ticket prices 'in line with market'
A price cap will be put in place on the South West Trains rail franchise as part of measures to spare passengers potentially higher fares and a worse service.
The Competition and Markets Authority (CMA) warned in July the operation of the London-Exeter route by First Group and MTR raised antitrust concerns as First Group already operates Great Western Railway, which runs the only other train service between the cities.
The CMA said, without intervention, the firms may have been able to increase fares for passengers.
However, on Friday the CMA accepted proposals by the duo that involve a price cap.
The watchdog said: "The offer made by the two companies involves a price cap on unregulated fares between London and Exeter on both South Western and GWR services.
"Ticket prices on the route will be linked to those on a number of other comparable services to ensure they are kept in line with the market.
"The companies have also offered to maintain the availability of cheaper advance fares on both services, again by linking them with similar routes."
In addition, FirstGroup and MTR will be required to submit regular reports to the CMA to show they are complying with the agreement.
The CMA's acceptance of the proposals means the award of the franchise will go ahead without the deal being referred for a more in-depth phase two investigation.
Rachel Merelie, executive director of markets and mergers said: "We examined the proposals very thoroughly during the consultation period to ensure that they addressed all of our concerns.
"We believe that they will protect passengers from fares being pushed up due to lack of competition on this key route between London and Exeter."