If you thought that tough punishments handed out by the OFT were immovable, think again. Today the body announced that it would be halving the amount British Airways (BA) owes it in fines from 2007 for price-fixing to £58.5m.
The original fine was issued at £121.5m, when BA was found to be colluding over fuel surcharges with long-time competitor Virgin Atlantic between 2004 and 2006. The OFT says the fine has been reduced because the ‘overall value added to the OFT's investigation by BA's co-operation was greater than had been anticipated at the time of the original agreement.’ We think that sounds like it has been let off for good behaviour.
In addition, Virgin Atlantic got off scot-free, because the regulator has a leniency policy that it follows if companies bring anti-competitive behaviour to its attention. £58.5m is still a large sum, but compared with the original fine is more of a slap on the wrist.
BA will be riled that Virgin didn’t have to face the music, claiming that on three out of the six occasions on which the firms compared notes, it was actually Virgin who made the approach. But then, there has never been much love lost between these two arch-rivals…