UK: Apparent Bias

Last Updated: 2 March 2010
Article by Simon Holmes and Dr. Gordon Christian

The Competition Commission has a tough time over the BAA case

Just before Christmas, the Competition Commission found itself at the receiving end of the third Competition Appeal Tribunal judgment in the same year in which the CAT overturned or censured certain CC decisions. In both the groceries and the payment protection insurance judgments, in which Tesco (groceries) and Barclays Bank (payment protection insurance) had challenged certain aspects of the remedies packages, the CAT agreed with the claimants in relation to some of these aspects and required the CC to reconsider the relevant issues.

In the latest market investigation remedies challenge to come before the CAT, the CAT has accepted BAA Ltd's (BAA) challenge to the CC's findings in its BAA airports market investigation on the basis that one CC inquiry member was affected by "apparent bias".

This article sets out the factual background before analysing the key points to come out of the CAT's judgment.

Background: OFT investigation

There have been longstanding concerns that BAA's ownership of several airports in the south-east of England (Heathrow, Gatwick, Stansted and Southampton) and in Scotland (Glasgow, Edinburgh and Aberdeen) was bad for competition and had adverse effects on consumers. At the end of June 2006, the OFT launched a market study into UK airports, arguing that the decision to proceed to a market study reflected the importance of airports to consumers and businesses within the UK.

Background: CC market investigation

The result of the OFT's market study was that the OFT referred the market for the supply of airport services by BAA in the UK to the CC for a market investigation in March 2007. By the time the CC published its emerging thinking in April 2008, BAA's common ownership of the three main London airports (Heathrow, Gatwick and Stansted) as well as the two main Scottish airports (Edinburgh and Glasgow) had already been identified as a key feature of the market that gave rise to adverse effects on competition. At that time, the stage was already set for structural remedies as a possible outcome, and this was confirmed in the CC's final report published in March 2009.

In order to address the issues related to BAA's common ownership of London's Heathrow, Gatwick and Stansted airports, the CC required BAA to divest Gatwick and Stansted airports to separate purchasers within two years. In fact, following the CC's provisional findings, BAA had already announced its intention to sell Gatwick, and the sale to Global Infrastructure Partners was completed recently, following European Commission merger control approval. The Competition Commission also decided that BAA should sell either Edinburgh or Glasgow airport.

BAA's CAT challenge

On 18 May 2009, BAA filed with the CAT its appeal against the CC's final report and the divestment remedy. In this regard, BAA relied on two grounds. First, it alleged that the CC's report was flawed as one CC inquiry member was affected by apparent bias. Second, it challenged the divestment remedy on proportionality grounds, essentially similar to those which had been used successfully against the CC by Tesco and Barclays Bank in the groceries and payment protection insurance cases.

Apparent bias

The CC has a panel of members who are all highly experienced and well-regarded experts in their respective fields. The CC makes a selection from this panel and appoints a certain number (usually, between three and six) of such members to conduct and direct the inquiries that the CC is asked to undertake.

The BAA inquiry was led by a team of six CC members, including Professor Peter Moizer. It was Professor Moizer's participation in the market investigation that, in BAA's opinion, gave rise to apparent bias concerns. This was because Professor Moizer had, for a significant period of time, advised the Greater Manchester Pension Fund, which is governed by the 10 local authorities in Greater Manchester. The crux of the apparent bias allegation lay in the fact that these same local authorities also owned 100% of the shares in Manchester Airport Group, a key BAA competitor. In BAA's opinion, therefore, Professor Moizer was involved in determining whether BAA should be broken up on the one hand while, at the same time, advising a competing company that stood to benefit from such a possible BAA break-up imposed by the CC.

CC policy

Since July 2002, the CC has had a stringent policy in place to prevent conflicts of interest from arising, a copy of which can be found on the CC's website. The guidance requires members to disclose to the CC's chief executive any interests which may give rise to a conflict, and it goes on to say that such an interest may result in a member not being appointed for the purpose of a particular investigation. The guidance is also clear on why the conflicts policy is very important for the CC: "We are not only concerned with the possibility of one of our decisions being challenged in court on the grounds of conflict of interest, embarrassing as such a case would be to the Commission and the member involved. The [CC] must be seen to be above suspicion."

CC disclosure

So what did the CC disclose to BAA about Professor Moizer's (indirect) link to the Manchester Airport Group? At the start of the market investigation, the CC sent an email (the 2007 email) to BAA in which it noted that Professor Moizer had given strategic advice to the Greater Manchester Pension Fund on how to structure investments. The CC followed this up with a more formal letter (the 2007 letter), in which it reiterated its previous statement, and noted that Professor Moizer had no influence on (and did not even know) which investments the Greater Manchester Pension Fund in fact made. The CC did note, however, that the Greater Manchester Pension Fund investments may include some whose value could be affected by the outcome of the inquiry – a very indirect and vague reference to the link between the Greater Manchester Pension Fund and the Manchester Airport Group.

Professor Moizer's involvement

However, as counsel for BAA explained in detail to the CAT during the hearing, there had been a conflict issue concerning Professor Moizer and an airports investigation on a previous occasion. Every five years, the CC is involved in reviews concerning regulated airports, relating in particular to the maximum level of charges that the regulated airports can charge airlines and other airport users. In 2002, the CC was considering two quinquennial reviews in parallel, one related to Manchester Airport and the other related to London Heathrow, Gatwick and Stansted. Professor Moizer was a member of the Manchester Airport inquiry, but not of the other one. However, as there were certain common issues to the reviews, a joint meeting of both inquiry groups was suggested, and at that stage Professor Moizer notified the CC of the potential conflict and took no part in the joint meetings. In addition, several interested parties (but not BAA) were notified about Professor Moizer's link to the Greater Manchester Pension Fund and the Manchester Airport Group in a letter which was significantly more detailed than the 2007 email and letter to BAA referred to above.

Another key point that was relevant to the CAT's considerations on the bias point was that Manchester Airport Group had informed the CC at a hearing in October 2007 that it would be interested in acquiring BAA airports if a suitable opportunity arose.

Issues came to a head in January 2009, when Professor Moizer first became aware of the Greater Manchester Pension Fund's participation in a consortium interested in acquiring Gatwick (which BAA had put on the market after the CC's provisional findings). Given that a conflict of interest could no longer be ruled out, the CC took the decision that Professor Moizer should stand down, which he duly did – but only a matter of weeks before the CC's final report was published.

Legal test

According to the relevant legal test, the CAT had to decide whether a "fair-minded and reasonable" observer would conclude, on the facts of the case, that there was a real possibility that Professor Moizer was biased in favour of the Greater Manchester Pension Fund and/or Manchester Airport Group. "With the greatest reluctance" – and emphasising that the CAT considered this to be a case of apparent (rather than actual) bias – the CAT concluded that a fair-minded and reasonable observer would so conclude. At the same time, the CAT dismissed the CC's arguments (1) that BAA should have done further background checks on Professor Moizer after the CC's disclosure in 2007; (2) that BAA had waived its rights to allege bias as the 2002 disclosure was in the public domain and BAA had not acted on it; and (3) that even if Professor Moizer was affected by bias, he was only one of six members and could therefore not have had decisive influence on the results of the CC's inquiry.

The CAT's dilemma

As the CAT dismissed BAA's substantive arguments concerning the alleged lack of proportionality of the divestment remedy, the CAT found itself in difficult territory concerning the possible effects of its judgment. Unlike the groceries and payment protection insurance judgments, in which Tesco and Barclays Bank respectively succeeded with some of their substantive arguments (and it was therefore relatively straightforward to direct the CC to reconsider the relevant substantive issues), BAA had "only" succeeded on a procedural point. However, this risked the CAT having to overturn the entire report, and the CAT noted that it had been conscious throughout of the implications of this finding on a CC report prepared "at great effort and expense to all concerned". The CAT's judgment also left up in the air the ongoing airport disposal process concerning Stansted and Edinburgh or Glasgow. At BAA's suggestion during the hearing, the CAT has ordered that it will hear further arguments on the matter of appropriate relief unless BAA and the CC can agree a way forward.

At this point, it appears that talks between BAA and the CC are ongoing, and it will be interesting to see how long the CAT gives the parties before intervening to make a final decision on appropriate relief.


It is clear that as the severity of the CC's decisions increase – particularly in relation to outcomes in market investigations which have significant repercussions for both market participants and consumers generally – the CC's handling of all aspects of such cases must be beyond reproach. Justice must not only be done but be clearly seen to be done.

Furthermore, some commentators have gone as far as to label 2009 as an annus horribilis for the CC - a year in which it suffered three high-profile defeats at the CAT.

Against this background, the CC will no doubt be considering putting additional procedures in place to ensure that the significant benefits of its market investigations are not jeopardised by failings on the procedural side and are less vulnerable to challenge.

As always, such procedures will probably come at a price, with more complex procedures, greater pressures on time and, no doubt, ever longer reports.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.