Judgment

Neutral citation:

[2009] CAT 35

Published:

21 Dec 2009

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Summary:

Judgment of the Tribunal on an application by BAA Limited (“BAA”) for a review under section 179 of the Enterprise Act 2002 (“the Act”) of the decision of the Competition Commission (“the Commission”) contained in a report entitled “BAA airports markets investigation: A report on the supply of airport services by BAA in the UK” dated 19 March 2009 (“the Report”). In the Report the Commission found that BAA’s common ownership of airports in southeast England and lowland Scotland gave rise to adverse effects on competition (“AECs”) within the meaning of section 134(2) of the Act in connection with the supply of airport services by BAA. In order to remedy the AECs, the Commission concluded, inter alia, that BAA should divest both Gatwick airport and Stansted airport and also one of either Edinburgh airport or Glasgow airport.

BAA applied to the Tribunal for a review of the Report pursuant to section 179 of the Act, relying on two grounds of challenge: apparent bias and proportionality. In relation to the first ground, BAA submitted that the participation of Professor Peter Moizer as a member of the group within the Commission who conducted the investigation was subject to apparent bias by reason of his role as a long-standing fee-paid advisor to the Greater Manchester Pension Fund (“the Fund”). The Fund sits within the ten local authorities of Greater Manchester and is administered by one of those authorities. The same authorities hold 100% of the shares in the Manchester Airport Group (“MAG”) and play an active role in its business strategy. MAG is a potential purchaser of the airport assets to be divested by BAA and participated in the Commission’s investigation. In relation to the second ground, BAA submitted that, in assessing the proportionality of the divestiture remedies, and in particular with regard to the timetable for sale, the Commission failed to take account of material considerations relating to the impact of the divestiture on BAA.

On the first ground, apparent bias, the Tribunal unanimously concluded that in the light of the material facts a fair-minded and informed observer would conclude that there was a real possibility of bias affecting the deliberations, thinking and ultimate outcome of the Investigation. The Tribunal also concluded that BAA had not waived its right to object to the apparent bias. The Tribunal indicated that it would hear further argument from the parties on the form of relief in relation to the first ground, unless the parties were able to reach agreement on it.

On the second ground, proportionality, the Tribunal unanimously concluded that the challenge on that ground failed. BAA had not demonstrated that the Commission had failed to take account of relevant considerations when deciding upon the timescale for the divestments in question.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.