Coach firm wins competition claim against airport
A coach firm has won a competition claim against an airport which abused its dominant position in the market for its own financial gain.
The coach firm had operated a transport service between the airport and London Victoria for 30 years. When the contract ran out the airport operator conducted a ‘tender’ process.
The firm claimed that in a meeting four months earlier, the airport operator hadn’t mentioned the intention to hold a tender. However, it did give the impression that the firm was no longer part of its plans.
The airport operator gave the contract to a rival coach company. The contract gave the new company a seven-year exclusive deal for all current routes and first refusal to operate any future routes. The airport received a percentage of the revenue from the new company.
The coach firm brought an action against the airport operator saying it had discriminated against it and had abused its dominant position in the market in contravention of the Competition Act 1998.
The airport operator said it was reasonable to offer exclusivity to the new company as there was limited space at the airport bus station.
However, the court ruled that as the airport received a percentage of the new company’s revenue it had a commercial and economic interest in the state of competition in that market.
The long term contract distorted the market, making other companies unable to compete. The airport hadn’t granted the new firm exclusivity in order to prevent congestion at the bus stop. It had been to protect the firm from competition and therefore maximise the airport operator’s own revenue.
There was no justification to restrict the competition in this way.
Please contact Thomas Nolan if you would like more information about the issues raised in this article.