OFT issues statement of objections against Cathay Pacific Airways and Virgin Atlantic
22-Apr-2010 The Office of Fair Trading has today issued a statement of objections alleging that Cathay Pacific Airways and Virgin Atlantic have infringed competition law in relation to passenger services on the London to Hong Kong route.
The case concerns a number of alleged contacts between employees of the two airlines over a number of years which it is 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.
The matter was brought to the OFT's attention by Cathay Pacific 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. Provided it continues to cooperate, Cathay will be immune from any penalty imposed in this case.
Ali Nikpay, Senior Director of Cartels and Criminal Enforcement said:
'For a market economy to work effectively it is vital that competing companies determine their pricing strategies independently of each other and do not seek to avoid the rigours of competition through unlawful coordination. The parties will now have an opportunity to respond to our proposed findings before we decide whether competition law has in fact been infringed.'
At this stage it should not be assumed that the parties involved have broken the law. The OFT will decide if the law has been breached after it has reviewed any responses to the statement of objections.