OFT halves BA's record-breaking £121m fine for price-fixing

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The Independent Online

The record £121.5m fine slapped on British Airways for colluding with Virgin Atlantic to fix prices was more than halved yesterday, when the Office of Fair Trading finally brought a dramatic five-year investigation to a close.

The OFT said it had cut the fine to £58.5m because of recent case law in calculating fines and in light of BA's co-operation with investigators since 2007, when the flag-bearer first admitted colluding with Virgin over fuel surcharges on long-haul flights between August 2004 and January 2006.

Virgin, which tipped off the OFT about the price-fixing, escaped without punishment.

The case led the OFT to launch criminal lawsuits against a number of former BA executives. But the trial collapsed three weeks into a planned six-month legal battle after prosecutors failed to disclose key evidence to the defence, which included 70,000 documents from Virgin's computer database.

A later official review found that "management oversight" and "weakness in investigation processes" caused the collapse of the case, at a cost to the taxpayer of £1m.

Today the OFT claimed the fine had sent a "strong message" on price-fixing to the aviation industry. A BA spokesman said it was "pleased that this matter has been settled".

Virgin said it "regretted" its involvement in the matter but was pleased that a final determination was reached. "[We] reported this matter to the OFT in 2006 and [have] retained full immunity since then," added a spokesman.