On 15 April, through the judgment of Mr Justice Mann in Purple Parking Limited and Meteor Parking Limited v Heathrow Airport Limited,1 the High Court found that Heathrow Airport Limited ("HAL") had abused its dominant market position, contrary to section 18 of the UK Competition Act 1998 (the "Act"),2 by denying the claimants, Purple and Meteor, access to the forecourts of Heathrow Airport's Terminals 1 and 3 to enable them to carry out valet parking activities. The High Court upheld Purple and Meteor's claims that, by allowing its own valet parking division, Heathrow Valet Parking ("HVP"), to have continued access to its forecourts, at no charge, HAL's conduct was clearly discriminatory. Since HAL was dominant on a relevant market and its conduct was not objectively justifiable, it was therefore unlawful.
Valet Parking at Heathrow Terminals 1, 3 and 5
The claimants conduct valet parking operations at Terminals 1, 3 and 5 of Heathrow Airport. Valet parking (also described by the claimants as 'meet and greet parking') involves a departing passenger handing over her car to an attendant at the terminal, the car being parked at a car park away from the terminal and the car being handed back to the passenger at the terminal when she returns from her journey. Until 2010, the claimants collected and handed back travellers' cars on the forecourts immediately in front of each terminal, to which HAL provided access for Purple and Meteor's attendants free of charge.
In mid-2010, however, HAL changed these arrangements by requiring all third party valet parking operators to conduct their activities from the short stay car parks of each terminal, for which they would pay an access charge of £1.50 or £2.50 per visit, provided the pick up or drop off took place within a specific amount of time. Crucially, these new arrangements would not apply to HAL's own valet parking service, HVP, which would continue to operate from designated areas on or adjacent to each terminal forecourt. Purple and Meteor refused to accept the changes and commenced proceedings in June 2010 seeking an injunction to prevent HAL from implementing its proposals.
Purple and Meteor claimed that HAL's conduct amounted to an unlawful abuse of its dominant position on the market for the provision of access to Heathrow Airport's facilities, including its roads and forecourts. They claimed that the abuse arose from the unjustified discrimination in favour of its in-house operator HVP, which placed them at a competitive disadvantage to HVP in the downstream valet parking market.
In August 2010, Mr Justice Roth granted an order for an expedited trial, to take place on the assumption that HAL was dominant in the upstream facilities market.3 As the case started from this common ground, the High Court only had to decide whether HAL's proposals amounted to an abuse of its dominant position. Since the parties subsequently reached an agreement in respect of the arrangements for access to Terminal 5, the judgment dealt with Terminals 1 and 3 only.
Discrimination between HVP and the Claimants
Section 18(2)(c) of the Act provides that abuse includes "applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage". The claimants argued that the abuse arose in this case from HAL giving its own downstream valet parking operation more favourable treatment, by enabling it to have continued access to terminal forecourts at no charge.
The court found that, if HAL's proposals were implemented, there would be a material dissimilarity between the conditions applied to HVP and the claimants. HVP would continue to use the forecourts (or an area close to and virtually the same as the forecourt, in the case of Terminal 1) at no charge, while the claimants were required to use the car parks and pay for each transaction. The judge held that passengers forced to use a car park for handover would face a longer walk and greater inconvenience than those using the forecourt. Furthermore, using a car park, especially that of Terminal 1 which the judge described as "a tight, somewhat gloomy, functional concrete car park", was not a comparable experience to using the forecourt "with its open air aspect and appearance of just being 'over the road'".
Anti-competitive effect on the consumer
The judge held that HAL's decision to exclude rival valet parking operators was commercially driven, with a view of placing them at a competitive disadvantage so that HVP could gain more business. In addition, he found that if the proposals were implemented, HVP would be the only supplier of valet parking on the forecourts and the rival operators would not be able to compete on quality from the car parks. Therefore, HVP would have an effective monopoly for the provision of valet parking to the "real meet and greet customer" and would be in a position to charge higher prices, to the detriment of the consumer.
Objective justification for the proposals
Since the judge had held that the proposals to exclude the competing operators from the forecourts was predominantly commercially motivated, it was no surprise that he also found that the proposals could not be objectively justified by considerations of congestion. Evidence was produced which showed that there had not been a congestion problem at Terminal 1 for 18 months. Although there had been a congestion problem at Terminal 3, the evidence showed that removal of third party valet parking operators from the forecourts would not alleviate the problem to such an extent as to justify the anti-competitive conduct.
Therefore, the judge found that HAL had contravened section 18 of the Act and granted an order preventing HAL from excluding the claimants from the terminal forecourts. It is understood that HAL is considering appealing the judgment to the Court of Appeal.
This case is interesting for a number of reasons. Most notably, as a rare instance of a domestic court finding that a company has infringed competition law, it is a good example of a relatively small company obtaining rapid redress against anti-competitive behaviour from the courts, rather than from a competition authority. It is remarkable that the judgment was handed down only 14 months after HAL first proposed to change the arrangements with third party valet parking operators. Had Purple and Meteor instead complained to the UK competition authority, the Office of Fair Trading (“OFT”), the OFT may well have declined to investigate the case and, even if it had taken it up, the investigation would almost certainly still be underway and the complainants would be facing a further wait of about two years before they might hope to see a decision against HAL.4 At a time when the OFT's budgets are under pressure, and there is significant interest at the European level in facilitating private competition law claims, this case is a timely reminder that the English courts are an attractive forum for such actions.
As far as the abuse itself is concerned, this judgment is a reminder that both UK and EU competition law impose a 'special responsibility' on a dominant business to moderate its behaviour towards its competitors. Put simply, while even a dominant company should be free to compete 'on the merits', it may find itself in difficulties if it cannot give a good explanation for conduct that harms a competitor, even if the conduct concerns it controlling access to its own land. It was a critical factor in this case that HAL had its own (albeit small) downstream valet parking operation, since the discrimination finding rested on this fact. If HAL had been active only on the upstream facilities market, the claimants would have faced a harder challenge in proving that the attempt to move them to the car parks was abusive.
The judgment is also a reminder that, in competition cases just as in other types of litigation, facts and the way in which they are conveyed really matter.5 The judge in this case was clearly influenced by the fact that, even though there was no clear evidence of anticompetitive intent behind its change in policy on access to forecourts, HAL was unable to present any cogent evidence that supported an alternative explanation. It is also notable that, whereas the judge found the claimants' witnesses to have been variously "convincing", "reliable", "careful" and "honest", he found that HAL's witnesses were "evasive", "defensive beyond the natural instincts of a cross-examined witness", "overly reluctant to accept that which [the judge found] he believed", "guarded and cagey", not always reliable, "superficial" and not convincing. In light of this, as well as his evident dislike of the ambience of Heathrow car parks, it is perhaps unsurprising that Mr Justice Mann reached the conclusion he did in this case.