Airports warned over ‘price-fixing’

By Neal Baldwin
Home » Airports warned over ‘price-fixing’

UK airport operators have been warned that regulators are keeping a close eye on their charges to airlines following suspicions they could be price-fixing.

In a joint letter, the Civil Aviation Authority and the Competition and Markets Authority said they were “remind[ing] airport operators of their responsibilities and obligations under competition law” after receiving intelligence that they might be tipping each other off about future plans.

Acknowledging that airport operators have had a tough time recently, with COVID pressures and then the war in Ukraine hitting business and forcing up costs, the CMA and CAA did not make any specific allegations against airports. However, the letter is highly unusual and can be considered a warning shot over their future behaviour.

“In difficult times, it may seem tempting to reduce uncertainty by sharing confidential information with competitors. However, sharing and receiving such information may be illegal under competition law,” said the letter, which was jointly signed by CMA Senior Director, Cartels Competition, Juliette Enser, and the CAA’s Group Director, Consumers and Markets, Paul Smith.

“Giving a competitor insight into your future commercial strategy may reduce competition, leading to increased prices and reduced service or choice. This is unfair to customers (both airlines and end consumers), many of whom have also faced and continue to face significant challenges due to the pandemic and other cost pressures.”

It goes on to explain how charges must be derived in a transparent way and in consultation with airlines, and warned of the harsh penalties around breaking competition law, including huge fines and potential criminal prosecution of those involved.

Airports were also told to ensure that all staff were aware of the law.

“We should make clear that neither the CMA nor the CAA consider changes in staff or lack of awareness to be mitigating factors for companies that breach competition law” they warned. “It is your responsibility to ensure that your business complies with competition law. This includes ensuring that your staff know what they can and can’t do, including the types of issues that they should not discuss with competitors.”

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