OFT Imposes Largest Ever Fine For Breaching Competition Law

On 1 August 2007 the Office of Fair Trading (OFT) announced it has imposed a fine of 121.5 million on British Airways (BA) for price fixing, contrary to UK competition law. BA has admitted colluding with Virgin Atlantic on the level of fuel surcharges for long haul passenger flights. Virgin escaped fines as it blew the whistle on the collusion to the OFT. This is the largest fine ever imposed by the OFT for breach of competition law.

The United States' Department of Justice (DOJ) has also been investigating this matter and is also expected to impose fines dealing with the US aspects of the collusion.

The OFT has confirmed that it is continuing its criminal investigation into whether any individuals are guilty under the UK's criminal cartel offence. This carries possible jail terms of up to five years and/or unlimited fines. No-one has yet been brought to trial for the criminal cartel offence, although the OFT has confirmed it has opened a number of investigations which may or may not lead to prosecutions. Individual criminal penalties are also available for breach of US anti-trust law. BA's admission of collusion is not relevant to possible charges against individuals.

This case shows that the OFT is serious about cracking down on cartels and underlines the importance of competition law compliance for businesses large and small. It also highlights the value of the OFT's policy of allowing whistleblowers to escape fines in return for co-operation and detailed information about potential competition law infringements. It remains to be seen whether this case will also make history by giving rise...