Airport operators have been warned against sharing confidential commercial data with competitors.
A joint letter has been sent by the Competition and Markets Authority and the Civil Aviation Authority spelling out their responsibilities and obligations under competition law – outlining penalties including fines of up to 10% off turnover and director disqualifications.
It reveals that the competition watchdog recently received intelligence to suggest that some UK airport operators might not always be complying with competition law.
The CAA is aware of this intelligence and shares the CMA’s “serious concerns” about the possibility of competition law breaches in the sector, according to the open letter signed by CMA senior director, cartels competition, Juliette Enser, and the aviation regulator’s group director, consumers and markets, Paul Smith.
It says: “The CMA and the CAA acknowledge that the coronavirus pandemic and the impact of the conflict in Ukraine (including fuel costs, rerouting and macroeconomic environment) have resulted in extraordinary pressures and uncertainty for the aviation sector.
“In difficult times, it may seem tempting to reduce uncertainty by sharing confidential information with competitors.
“However, sharing and receiving such information may be illegal under competition law.
“Giving a competitor insight into your future commercial strategy may reduce competition, leading to increased prices and reduced service or choice.
“This is unfair to customers (both airlines and end consumers), many of whom have also faced and continue to face significant challenges due to the pandemic and other cost pressures.”
The letter goes on to point out the requirement for large airports to consult with their customers on proposed changes to charges.
It refers to the Airport Charges Regulations 2011 (ACRs), a framework requiring airports to provide transparency on key aspects of how charges are derived and to consult with customers in defined timescales.
“While it is appropriate to consult publicly before modifying your airport charges, you must not either share additional information or discuss with other airport operators your pricing or competitive strategies,” the joint letter adds.
“Even though the ACRs will not apply to many airports in 2023, we consider that it continues to be critical for airports to consult users and abide by the general behavioural principles included in the ACRs, particularly as the aviation industry recovers from the sharp traffic downturn seen during the pandemic.
“We are aware that many airports will have undergone significant staffing changes as a result of the extremely challenging circumstances of the last few years.
“With the recovery now well underway, it may be an opportune moment to review your competition compliance policy and ensure that all your current staff have received appropriate training.
“We should make clear, however, that neither the CMA nor the CAA consider changes in staff or lack of awareness to be mitigating factors for companies that breach competition law.
“It is your responsibility to ensure that your business complies with competition law. This includes ensuring that your staff know what they can and can’t do, including the types of issues that they should not discuss with competitors.”
Airports are warned: “If the CMA and the CAA receive further intelligence of suspected competition law breaches in this area, those involved may face formal enforcement action. As you will be aware, there can be serious consequences for businesses that break competition law.”
The letter concludes: “The aviation industry is hugely important to the UK economy, and healthy competition will ensure that it stays that way. Please take the time to review your practices and ensure that you and your employees are complying with competition law.”