Heathrow to pay £1.5m over car park price probe

Hayes & Harlington Gazette - - News - By QASIM PERACHA qasim.peracha@trin­i­tymir­ror.com Twit­ter: @qasim­per­acha

HEATHROW Air­port has been or­dered to pay a £1.6 mil­lion set­tle­ment over a car park pric­ing scan­dal at Sof­i­tel Ter­mi­nal 5.

The Com­pe­ti­tion and Mar­kets Au­thor­ity (CMA) im­posed the hefty fine on the air­port, af­ter an in­ves­ti­ga­tion into its agree­ment with Arora Group over park­ing at the Sof­i­tel.

Un­der the agree­ment, Arora Group could not charge non-ho­tel guests less for park­ing than other car parks on the air­port’s grounds.

Both Heathrow and Arora Group were pro­vi­sion­ally found to have breached com­pe­ti­tion laws and ac­cepted re­spon­si­bil­ity, with Heathrow agree­ing a £1.6m set­tle­ment on Tues­day Septem­ber 18.

The set­tle­ment could have been as high as £2m, but a dis­count of 20% was granted as the air­port vol­un­tar­ily en­tered into the set­tle­ment.

Heathrow Air­port Ltd and Arora Group have re­moved the clause and other air­ports have been warned to avoid sim­i­lar agree­ments with lease­hold­ers.

A spokes­woman for Heathrow Air­port Ltd said: “To­day it has been an­nounced that we have agreed to set­tle a case with the Com­pe­ti­tion and Mar­kets Au­thor­ity (the CMA) in re­la­tion to a breach of com­pe­ti­tion law. We have co­op­er­ated fully with the CMA through­out its in­ves­ti­ga­tion, re­flect­ing our clear and un­equiv­o­cal com­mit­ment to com­pe­ti­tion law com­pli­ance.

“The CMA has found that the Arora Group and the com­pany were par­ties to an anti-com­pet­i­tive agree­ment con­cluded in 2005. This re­volved around a his­tor­i­cally ne­go­ti­ated pro­vi­sion which pre-dates our cur­rent man­age­ment and share­hold­ers.

“The mat­ter re­lates to the price that Sof­i­tel could charge for a very small pro­por­tion of the car park­ing of­fered at that ho­tel.

“We be­lieve that the pro­vi­sion was never mon­i­tored or en­forced and, as such, there would have been no im­pact on Heathrow’s cus­tomers or the Sof­i­tel.

“How­ever, we recog­nise that the com­pany and the Arora Group should not have agreed the pro­vi­sion back in 2005 and we ac­cept the CMA’s set­tle­ment fine of £1.6m.”

The Sof­i­tel is at­tached to Ter­mi­nal 5 and was the Arora Group’s first ho­tel built on Heathrow Air­port grounds. The group also owns The Re­nais­sance Lon­don Heathrow and Hol­i­day Inn Lon­don Heathrow T5.

The group is also con­struct­ing a Crowne Plaza and Hol­i­day Inn Ex­press at Ter­mi­nal 4, due to open later this year, and a ho­tel con­nected to Ter­mi­nal 2.

The group’s owner Surinder Arora started at the age of 16 as a bag­gage han­dler at Heathrow be­fore work­ing his way to an es­ti­mated £800m ho­tel and prop­erty em­pire by the age of 60.

The ty­coon has even de­vel­oped mul­ti­ple al­ter­na­tive plans for air­port ex­pan­sion, which he claims will come in cheaper, quicker and are backed by the air­lines work­ing at Heathrow. Ann Pope, the CMA’s se­nior direc­tor for an­titrust, said: “Air­port car park­ing charges are paid by mil­lions of peo­ple and any agree­ments to re­strict price com­pe­ti­tion are not ac­cept­able. “Com­pe­ti­tion law ap­plies to land agree­ments at air­port car parks in the same way as any other type of busi­ness ar­range­ment.

“This fine should act as a strong warn­ing to all com­pa­nies that the CMA will take ac­tion to make sure busi­nesses are free to com­pete on price.”

A spokes­woman for the Arora Group com­mented: “Hav­ing brought this mat­ter for­ward to the CMA, and co-op­er­ated with them through­out, the Arora Group is pleased that this in­ves­ti­ga­tion is en­ter­ing its fi­nal stages.

“The Arora Group takes com­pli­ance with all laws and reg­u­la­tions very se­ri­ously and re­spects the CMA and the process it fol­lowed.

“Arora wel­comes all in­creases in open, fair and trans­par­ent com­pe­ti­tion at Heathrow, par­tic­u­larly in terms of pric­ing at the air­port, not only be­cause it’s good for lo­cal busi­nesses and op­er­a­tors, but also be­cause we feel it is more likely to lead to a bet­ter ex­pe­ri­ence for pas­sen­gers.”

This fine should act as a strong warn­ing to all com­pa­nies that the CMA will take ac­tion

Ann Pope, se­nior direc­tor for anti-trust at CMA

Sof­i­tel is linked to Ter­mi­nal 5 at Heathrow, but was un­able to charge less for car park­ing than other air­ports at Heathrow

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.