London Heathrow Airport will have to pay a fine of £1.6m for limiting competition on parking prices in a lease with a hotel operator at Terminal 5.

This penalty, to be imposed by the Competition and Markets Authority (CMA), comes following a probe into the airport’s agreement with the Arora Group for the lease of Arora’s Sofitel hotel at the terminal.

This agreement consisted of a clause that limits how parking prices should be set by Arora for its non-hotel guests.

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

“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.”

After the probe, the CMA found that Heathrow and the Arora Group violated competition law. The two entities have accepted the breach and removed the pricing restriction.

Heathrow agreed to settle the case and pay the fine. However, the Arora Group will not be imposed a fine, as it was granted immunity for coming forward under the CMA’s leniency programme.

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By GlobalData

This programme is intended to encourage companies to co-operate if they are found to be involved in wrong-doing.

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

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.”