On April 19, 2012, the U.K. Office of Fair Trading (OFT) announced its decision that British Airways (BA) and Virgin Atlantic Airways (VAA) engaged in anti-competitive practices relating to passenger fuel surcharges and fined BA £58.5 million. This case relates to coordination between the airlines on surcharge pricing for long-haul flights through the exchange of pricing and other competitively sensitive information.
In making the announcement, the OFT said:
“This decision brings an end to this investigation and sends out a strong message that coordinating pricing through the exchange of confidential information between competitors is unlawful. The size of the fine underlines that it is important for companies to take steps to ensure that they have an effective compliance culture. The fine would have been higher still but for the co-operation provided by BA throughout the OFT’s investigation. Without this, together with BA’s admission of the infringement, the case would have taken considerably longer to resolve.”
According to the OFT, VAA brought the matter to the OFT’s attention and was not fined under the OFT’s leniency policy.
In Canada, the Competition Bureau also has Immunity and Leniency Programs, which are both increasingly important tools for the Bureau for the detection of cartels and important options for parties participating in criminal conduct under the Competition Act to reduce liability.
The case is also interesting in highlighting the risk of information exchanges between competitors.
In Canada, while there is no express provision in the Competition Act exclusively governing information exchanges, the principal risk of such exchanges between competitors is that they can lead to agreements (e.g., price-fixing agreements) that violate the criminal conspiracy provisions of the Competition Act (under section 45).
Information exchanges can also be relevant in establishing the existence of an illegal agreement under section 45 (i.e., be used by the Bureau, a court or a private plaintiff to infer the existence of an agreement that contravenes section 45).
Following amendments to Canada’s Competition Act in 2009 and 2010, agreements to exchange competitively sensitive information may also raise issues under section 90.1 of the Act (the civil reviewable practice section for agreements among competitors) if their effect is to prevent or lessen competition substantially.
For a copy of the OFT’s news release see:
British Airways to pay 58.5 million penalty in OFT fuel surcharge
For more about Canada’s conspiracy laws see:
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