Anti-trust experts have questioned whether the collapse of the British Airways price-fixing trial might prompt the Office of Fair Trading to review the £121.5 million fine imposed on the airline.
BA was fined the record amount in 2007 for breaching civil competition laws ahead of the criminal investigation into whether any individuals dishonestly fixed the level of surcharges.
Although BA admitted to the OFT that it colluded with Virgin Atlantic, the criminal trial against four former executives collapsed today after the prosecution decided to offer no evidence.
Emails had emerged indicating that during a period crucial to the allegations, Virgin had decided to raise its fuel surcharge to £6 without having spoken to BA.
Simon Barnes, of Hogan Lovells’ Antitrust, Competition and Economic Regulation team, said the collapse of the case risked undermining offences against cartel law.
He said: “This development will be a huge blow to the OFT. The BA criminal cartel case has been seen as an important test of the OFT’s ability to secure prosecutions under the relatively new cartel offence.
“Indeed, this was the first case in which the defendants had pleaded ‘not guilty’ and in which the issue was being put to a jury.
“There has also been significant media interest in the case. The potential upside for the OFT was that the case presented an important opportunity to drive home the message that individuals put themselves at risk if they engage in cartels; the downside is that a failure to convict might damage the credibility of the cartel offence.
“This development might make it more difficult for customers to bring damages claims for losses suffered as a result of the alleged cartel.
“It will also be interesting to see whether it causes the OFT to revisit the £121.5 million fine that it has already indicated that it will impose on BA for infringing the civil competition law rules.”
BA’s former commercial director Martin George, sales and marketing director Andrew Crawley, former head of communications Iain Burns and the now retired former head of UK sales Allan Burnett all denied cartel offences under the Enterprise Act 2002.
The court will reconvene tomorrow as the sides discuss who is to pay legal costs. The OFT was accused of incompetence by defence lawyers.
So far it has refused to comment but said it would respond when the court proceedings resume tomorrow.
After the case collapsed, the defendants expressed their delight that their names had been cleared after the four-year investigation.
Burnett said: “I worked for British Airways for 39 years and left with an unblemished record, in the same way I leave court with an unblemished record today.”