On 14 December, the Office of Fair Trading (OFT) announced that it had no grounds for action in relation to allegations of fixing of passenger fares by Cathay Pacific and Virgin Atlantic on routes between London and Hong Kong.
The OFT started an investigation into the allegations in November 2007 after Cathay Pacific applied for leniency. The OFT went as far as issuing a Statement of Objections (SO) in April 2010. However, after hearing representations from Virgin Atlantic, it decided to investigate the allegations further, eventually concluding that there were a number of factors which cast doubt on the reliability of evidence set out in the SO.
Interestingly, Virgin Atlantic did accept that contacts between Virgin Atlantic and Cathay Pacific employees took place. However, it denied that the contacts had been anti-competitive or that commercially sensitive information had been exchanged. The OFT cannot, under EU law, conclude that there has been no infringement, but did conclude that it had no grounds for action and has closed its case without penalties.
The time taken by the OFT to conclude that the evidence did not support an infringement decision demonstrates how difficult the distinction between legitimate and illegitimate information exchanges can be in an industry where competitors legitimately exchange information all the time. The European Commission similarly investigated the fixing of passenger fares with dawn raids taking place in 2008, but closed its file at the end of 2011 with no charges.
Other articles related to the EU & Competition Law Bulletin for February 2013:
> European Commission imposes biggest ever fine on members of screen component cartel
> Court of Justice upholds AstraZeneca abuse of dominance decision
> Statement of Objections in Samsung standard-essential patent case
> Commission conditionally approves acquisition of Orange Austria by Hutchison 3G
> NCAs may take action against anti-competitive agreements which do not meet the thresholds in the Commission’s de minimis notice
> New guidelines in place for assessing State aid for the deployment of broadband
> European Commission accepts commitments in three investigations: Thomas Reuters, RioTinto Alcan, e-book publishers (and Apple)
> German Parliament Adopts Amendment to German Competition Law
> Federal Cartel Office prohibits chemicals traders joint venture previously cleared in merger control
> OFT issues guidance on Competition Act procedures and extends trial of Procedural Adjudicator role
> OFT clears Vodafone/Telefonica site sharing agreement
> Health and Social Care Act: Competition Law Regime