OFT Issues no grounds for action decision in Hong Kong passenger services case

119/12 14 December 2012

The OFT has today decided to close its investigation into whether Cathay Pacific Airways and Virgin Atlantic infringed competition law on the London to Hong Kong route.

The case concerned a number of alleged contacts between employees of the two airlines between 2002 and 2006 which it was alleged had the object of coordinating the parties' respective pricing strategies regarding passenger fares through the exchange of commercially sensitive information on pricing and other commercial matters.

During this investigation the OFT gathered and conducted a thorough review of a significant body of evidence. In 2010 the OFT sent the parties a Statement of Objections setting out the allegations and invited their representations. In light of the parties' representations, which included additional evidence, and having carried out a number of further investigative steps, the OFT has concluded that there are no longer grounds for action in this case.

See a fuller summary of the case.

NOTES

The matter was brought to the OFT's attention by Cathay Pacific Airways under the OFT's leniency policy, where a company which is the first to report its participation in cartel conduct may qualify for immunity from penalties.
The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. More specifically, the Chapter I prohibition covers anti-competitive agreements and concerted practices, among other matters, that have the object or effect of preventing, restricting or distorting competition in the UK or a part of it and which may affect trade in the UK or a part of it. Its European counterpart, Article 101 of the Treaty on the Functioning of the European Union (TFEU), covers equivalent agreements or practices which may affect trade between EU Member States.
A Statement of Objections gives notice of a proposed infringement decision under the Competition Act 1998 to the parties involved. It sets out the facts on which the OFT relies, the objections raised by the OFT, the action it proposes to take and the reasons for it. A Statement of Objections is not a decision document and the parties have the opportunity to make written and oral representations in response to the allegations before any final decision is made.
Under EU law, the OFT is precluded from making a finding that there has been no breach of the EU competition rules. Such a finding may only be made by the European Commission and the European Courts. The OFT may, however, close a case on the basis that there are no grounds for action on its part where on the basis of the information in its possession the conditions for the application of Article 101 TFEU are not met.

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