BAA Ltd v Competition Commission
[2012] EWCA Civ 1077
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
The Competition Commission's power to order divestiture of airports as a remedy for an adverse effect on competition is lawful and proportionate where the market investigation reveals structural competition concerns.
Facts
Following a market investigation, the Competition Commission found that BAA's common ownership of seven UK airports, including Heathrow, Gatwick, and Stansted, substantially lessened competition. The CC ordered BAA to sell Gatwick and Stansted. BAA challenged the divestiture order on grounds of procedural unfairness and irrationality.
Judgment Summary
The Court of Appeal dismissed BAA's appeal. It held that the CC had properly conducted its investigation and that the divestiture remedy was within its statutory powers and proportionate to the adverse effects on competition identified. The court confirmed broad deference to the CC's expert economic assessments.
Key Quotes
"It is inherent in such a statutory scheme that in order to secure the public interest, BAA will lose its freedom of choice as to whether and when to sell its asset. In that context, providing the timing of the compulsory sale is "calibrated", so as to ensure that BAA does have a proper opportunity to market its property and obtain a fair market price, the remedy will be proportionate."
— Sullivan LJ at [30](verbatim, verified against the judgment)
Subsequent Treatment
Confirmed the scope of the CMA's remedial powers in market investigations.
BAA subsequently divested Gatwick (2009) and Stansted (2013), demonstrating effective structural remedies in competition law.
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