The UK’s Competition and Markets Authority confirmed on Friday an earlier decision to ban Eurotunnel from running its cross-Channel ferry service MyFerryLink, that was formally Sea France.
Eurotunnel will have six months to stop service and will have to find a buyer for its MyFerryLink ferries so it becomes "completely independent" from the operator of the Channel Tunnel, Britain's competition authorities ruled.
The ban on operating the three MyFerryLink boats threatens around 600 jobs, 100 of which are in Dover.
French daily Le Parisien earlier described the ban, which will not be enforced immediately, as a "blow from Trafalgar".
Eurotunnel bought the boats after SeaFrance went into administration in 2012, before re-launching the service under the name MyFerryLink.
Their grounds for taking the action is that they believe Eurotunnel has gained too big a share of the cross-Channel market, mainly due to the fact it owns the Channel Tunnel roll-on/roll-off rail service.
The UK’s Competition Commission says Eurotunnel's purchase of the Sea France boats, was more a takeover deal for a company, rather than just assets and was made to prevent rival company DFDS from buying the ferries.
The commission believes the likely outcome of Eurotunnel’s takeover of the SeaFrance boats would be price rises for passengers and freight customers on the route.
MyFerryLink on Friday said it would appeal the ruling and told its customers it would continue running the services during the busy summer season.
"We continue fundamentally to disagree with the CMA on a number of critical points. First and foremost we do not consider that the CMA has jurisdiction to review the transaction as a matter of UK merger law," MyFerryLink said in a statement.
"It is also manifestly the case that the CMA's decision, which will reduce choice, is bad for consumers, bad for competition and bad for all those involved in cross-Channel operations."
An initial decision to ban MyFerryLink was taken in June last year but it was then overturned on appeal. However Friday's verdict turned the tide once more and will mean Eurotunnel likely having to sell off at least two of the ferries.
However that would need clearance from the French commercial court, which previously banned the sale of ferries.
“Since we don’t have the right to sell the ferries, they will simply be taken out of circulation and dry docked,” a Eurotunnel spokesman has said in the past.
Eurotunnel argues that the UK authorities had not taken into account changes in the market since it launched the service.
“Two years after the acquisition of three ferries and following the decision of the Appeal Tribunal, which rejected the original decision by the Competition Commission, Groupe Eurotunnel submitted to the Competition and Markets Authority (CMA) that a material change of market had occurred, based upon the 12% growth since SeaFrance ceased its operations,” a statement from the company read.
"DFDS continues to operate successfully in the market, whereas the Competition Commission's original decision was based on the premise that DFDS would rapidly be forced to exit the market," the statement added.