Purple Parking Ltd & Anor v Heathrow Airport Ltd

Section 18 of the Competition Act 1998 states the basic prohibition against abuse of a dominant position. The examples in section 18(2) are not rigid legal pigeon-holes or an exhaustive code of requirements. A claim may therefore be assessed by reference to the substance and anti-competitive effect of the conduct.

Applying dissimilar conditions to equivalent transactions may constitute an abuse where the conduct places competitors at a competitive disadvantage felt by consumers. Objective justification requires more than showing that the measure addresses a problem. Where less restrictive and effective alternatives exist, exclusionary conduct is not justified. The use of byelaws to control access does not exempt the conduct from competition law.

Purple Parking Limited and Meteor Parking Limited operated off-airport meet-and-greet parking services at Heathrow. Heathrow Airport Limited operated its own valet service and controlled access to the terminal forecourts.

The claimants challenged proposed arrangements requiring them to conduct their operations from short-stay car parks while Heathrow’s service remained on, or effectively on, the forecourts. The trial proceeded on the assumption that Heathrow was dominant in the market for access to Heathrow’s facilities. The issues included the relevant downstream market, equivalence of the transactions, dissimilarity of conditions, competitive disadvantage, the significance of Heathrow’s own facilities, and objective justification.

1. The claim succeeded. Heathrow’s proposed exclusion of the off-airport operators from the Terminal 1 and Terminal 3 forecourts, while retaining its own forecourt operation, contravened section 18 of the Competition Act 1998.

2. The statutory examples in section 18(2) are examples of conduct capable of amounting to abuse. They do not require a case to be forced into a single category with rigid additional requirements. The authorities, including Bronner, did not establish that an essential-facilities case always requires proof that all effective competition would be eliminated.

3. The relevant downstream market was the Heathrow meet-and-greet market. Customers seeking the convenience of handing over and receiving their cars at the forecourt would not regard the short-stay car parks as substitutes in response to a 5–10 per cent price increase.

4. The relevant transactions were access to Heathrow’s facilities for conducting meet-and-greet activities. Heathrow’s different business model and use of its own car parks did not make the transactions incomparable. The claimants and Heathrow were subject to materially dissimilar conditions: Heathrow retained access to the forecourts without charge, while the claimants would be confined to inferior car-park locations and charged for their use.

5. The proposed arrangements would leave Heathrow as the only meaningful forecourt meet-and-greet supplier. The resulting loss of quality competition and likely increase in unconstrained prices would be an anti-competitive effect to the detriment of consumers.

6. Heathrow’s property rights and use of its own facilities were relevant but carried limited weight. The forecourts were ancillary airport facilities, not property created principally for Heathrow’s own meet-and-greet business. The proposed exclusion was not objectively justified by congestion, safety, security, environmental concerns or a user-pays principle. In particular, less restrictive measures, including improved enforcement and traffic management, could address congestion. The anti-competitive commercial motivation also undermined the asserted justification.

7. The fact that access was controlled through byelaws did not exempt Heathrow’s decisions about enforcement from competition law. The court would prohibit the anti-competitive exclusion; the parties remained free to negotiate, or Heathrow could impose a lawful arrangement.