Heathrow Airport has been fined £1.6m for restricting competition on parking prices with the operator of the Sofitel hotel at Terminal 5.

The fine follows an investigation by the Competition and Markets Authority (CMA), which found that Heathrow and the hotel's operator, Arora Group, breached competition law.

Heathrow initially faced a £2 million penalty but was slapped with a smaller fine for agreeing to settle.

Arora Group will not be fined as it was granted immunity for coming forward under the CMA's leniency programme, designed to encourage companies to co-operate if they think they might be involved in wrong-doing.

The investigation centred on a clause in the lease for the hotel which restricted how parking prices should be set by Arora for non-hotel guests.

The CMA investigated whether the pricing restriction prevented the Arora Group from charging non-hotel guests cheaper prices than those offered at other car parks at the airport.

As part of its work, the CMA has sent letters to other airports and hotel operators warning against similar anti-competitive agreements.

It is the first time the CMA has taken competition law enforcement action in a case involving a land agreement.

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."

The CMA has a dedicated reporting hotline for cartels (020 3738 6888) and recently launched a campaign to encourage more people to come forward with information about suspected illegal behaviour.

The UK Civil Aviation Authority assisted the CMA in its investigation and will be issuing an Open Letter to airport operators and other relevant parties.

The CMA operates a rewards policy under which it may pay a financial reward of up to £100,000 in return for information which helps it to identify and take action against cartels.

Courtesy of Travelmole