Heathrow airport will pay a £1.6 million fine after admitting to restricting car parking prices in a lease agreement with the Arora Group.
Under the agreement, Heathrow restricted how Arora charged non-hotel guests for parking at its Sofitel Terminal 5 property (pictured), according to the Competition and Markets Authority (CMA).
The CMA investigated the restriction to determine whether it prevented the Arora Group from competing with Heathrow on parking prices for non-hotel guests.
The organisation has determined the move was in breach of competition law, and both Heathrow and Arora have accepted the judgement and removed the clause in the contract.
The Arora Group won’t face any fines because it was granted immunity for coming forward under the CMA’s leniency programme, which was designed to encourage companies to come forward if they think they have been involved in wrong-doing.
However, Heathrow will settle the case and pay £1.6 million, while the CMA has written letters to other airports and hotel operators warning against similar anti-competitive agreements.
The CMA says it was assisted in the investigation by the Civil Aviation Authority (CAA), the competition authority focused on airport operations and air traffic services. It says this is the first time it has taken action in a case involving a land agreement.
Ann Pope, senior director for antitrust at the CMA, commented: “Airport car parking charges are paid by millions of people and any agreements to restrict price competition are not acceptable. Competition law applies to land agreements at airport car parks in the same way as any other type of business arrangement.
“This fine should act as a strong warning to all companies that the CMA will take action to make sure businesses are free to compete on price.”
Competition at Heathrow has been a hot topic in recent months, with Arora Group founder Surinder Arora himself saying the airport should have to seek out partners to deliver each element of its third runway to keep costs down.
IAG chief Willie Walsh wrote to the CAA asking it to ensure there would be greater competition on the operation of Heathrow’s facilities to keep passenger fees down, but Virgin Atlantic said IAG must also be willing to allow other airlines to take on more take-off and landing slots at the airport to promote competition among airlines.
Heathrow has sought out independent partners to develop plans for facilities to support a thid runway since the plans were approved by Parliament in June.