A COMPANY owned by Lothian Buses is under investigation by a business watchdog after a rescue package saw it take over bus services in East Lothian.
East Coast Buses took on the area’s services last month after they were threatened with closure by previous operator First Scotland East.
But now the Competitions and Markets Authority (CMA) is probing the move due to fears it could make the Lothian Buses subsidiary too dominant in the market.
An initial enforcement order said the CMA is considering “whether it is or may be the case that a relevant merger situation has been created and whether the creation of that situation has resulted or may be expected to result in a substantial lessening of competition in any market or markets”.
It orders the two businesses to remain separate while the investigation is being carried out.
Richard Hall, managing director of Lothian Buses, said the step was “standard practice” and “wholly anticipated”, adding: “We will offer the CMA our full co-operation.”