Investigation into alleged infringement of Chapter I and Article 101 in relation to passenger services on the London to Hong Kong route.
Case reference: CE/8882-07
Whether Cathay Pacific Airways ('Cathay') and Virgin Atlantic had
infringed competition law in relation to passenger services on the
London to Hong Kong route in the period 2002 to 2006.
Summary of work
- The case concerned a number of alleged contacts between senior
employees of the two airlines over a number of years which it was
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
- During its investigation the OFT gathered and conducted a thorough
review of a significant body of evidence including documentary and
- The matter was brought to the OFT's attention by Cathay under the
OFT's leniency policy, which provides that a company which is the
first to report its participation in cartel conduct may qualify for
immunity from penalties.
- In April 2010 the OFT issued a Statement of Objections giving the
parties notice of its reasons for believing an infringement of the
competition laws had taken place and inviting the parties'
representations on the alleged case.
- The OFT received representations from the parties, including written
representations from Virgin Atlantic in November 2010 and oral
representations from Virgin Atlantic in February 2011. Virgin
Atlantic provided additional witness and other evidence in support
of its representations.
- In its representations Virgin Atlantic accepted that there had been
contacts between the Virgin Atlantic and Cathay employees in
question but disputed the allegation that the contacts had been
anti-competitive and, in particular, that commercially sensitive
information had been exchanged during them.
- Following the receipt of representations and additional evidence
from Virgin Atlantic, the OFT took a number of additional
investigative steps between March 2011 and September 2012. These
included including seeking further witness evidence and obtaining
additional data from Cathay and third parties, with a view to
assessing the strength of those representations.
- Having completed these additional investigative steps the OFT
concluded in December 2012 that there were a number of factors that
cast doubt on the reliability of the evidence in support of the
allegations as set out in the Statement of Objections. Most
importantly, certain key documentary evidence which appeared to
support the allegations had been undermined by inconsistencies with
other evidence obtained from Cathay, Virgin Atlantic and third
- In the circumstances, the OFT concluded that, following a thorough
investigation, it had no grounds for action in relation to the
allegations set out in the Statement of Objections and therefore
decided to close its case.
|Initial investigation: information gathering, including formal inspections, interviews of key witnesses, issuance of formal or informal information requests and parties' responses to requests.
||November 2007 to June 2009
|Further investigation: further information gathering including further interview of key witness and review of evidence.
||July 2009 - March 2010
|Investigation outcome (issue of Statement of Objections; case closure)
||Statement of Objections issued in April 2010
|Receipt of parties' written representations on the Statement of Objections
||October and November 2010
|Oral hearings with parties on written representations on Statement of Objections.
|OFT consideration of parties' written and oral representations on the Statement of Objections; further investigation; further assessment of evidence.
||November 2010 to October 2012
|OFT decision to close the case.
Published 14 December 2012