Case T‑430/18
American Airlines, Inc.
v
European Commission
Judgment of the General Court (First Chamber, Extended Composition), 16 December 2020
(Competition – Concentrations – Air transport market – Decision declaring a concentration compatible with the internal market and the EEA Agreement – Commitments – Decision granting Grandfathering rights – Error of law – Concept of appropriate use)
EU law – Interpretation – Methods – Literal, systematic and teleological interpretation
(see paragraphs 103-112, 204-249, 255-292)
Concentrations between undertakings – Examination by the Commission – Adoption of a decision finding a concentration operation compatible with the internal market without opening Phase II – Condition – No serious doubts – Need to obtain commitments from the companies concerned – Discretion
(Council Regulation No 139/2004, Arts 2(2), 6 and 8(2))
(see paragraphs 114-116, 119, 120)
Concentrations between undertakings – Examination by the Commission – Commitments of the undertakings concerned capable of rendering the notified operation compatible with the internal market – Criteria
(Council Regulation No 139/2004, Arts 2(2), 6(2) and 8(2))
(see paragraphs 117, 118, 260)
Concentrations between undertakings – Examination by the Commission – Commitments of the undertakings concerned capable of rendering the notified operation compatible with the internal market – Interpretation of commitments in the light of the Clearance Decision, the Merger Regulation and the Remedies Notice – Interpretation in the light of the Form RM
(Council Regulation No 139/2004, Arts 6(2) and 23(1)(c); Commission Regulation No 802/2004, Art. 20(1a)
(see paragraphs 121-123, 129-200, 254)
Judicial proceedings – Measures of organisation of procedure – Request for production of documents – Discretion of the EU judicature
(Rules of Procedure of the General Court, Art. 90(1))
(see paragraphs 308-311)
Action for annulment – Jurisdiction of the EU judicature – Claim seeking that directions be issued to an institution – Inadmissibility
(Arts 263 and 266 TFEU)
(see paragraph 312)
Résumé
By Clearance Decision of 5 August 2013, ( 1 ) the Commission approved, subject to conditions and obligations, a concentration between US Airways Group and AMR Corporation (together, the parties to the merger, ‘the Parties’), the latter being the parent company of the airline company American Airlines.
In order to respond to serious doubts expressed during the preliminary enquiry stage by the Commission regarding the compatibility of that transaction with the internal market, the Parties had proposed a series of commitments aimed at reducing entry barriers to London Heathrow Airport (‘LHR’) and at facilitating the entry of a competitor on the London-Philadelphia route. Thus, they undertook to make LHR airline slots available to a new entrant on the London-Philadelphia route. Those commitments (‘airline slot commitments’) were annexed to the Clearance Decision.
Although the LHR airline slots to be released were, in principle, to be used on the London-Philadelphia route, the airline slot commitments provided for the possibility for the new entrant to obtain Grandfathering rights allowing it to use those slots on any route to and from LHR. The new entrant could only acquire those Grandfathering rights, however, subject to an obligation that it would make ‘appropriate use’ of the slots for six consecutive International Air Transport Association (IATA) seasons (the ‘utilisation period’).
In implementing those commitments, a Slot Release Agreement was concluded between American Airlines and Delta Air Lines, which began operating the London-Philadelphia route in early summer 2015.
Taking the view that Delta Air Lines had made appropriate use of the slots during the utilisation period, the Commission granted it Grandfathering rights by a decision of 30 April 2018 (‘the Contested Decision’). ( 2 ) In support of the assertion that the released slots had been appropriately used, the Commission found that Delta Air Lines had not misused those slots during the utilisation period.
American Airlines brought an action before the General Court for annulment of that decision, invoking, inter alia, errors of law committed by the Commission in interpreting Delta Air Lines’ obligation to make ‘appropriate use’ of the slots released. According to American Airlines, ‘appropriate use’ must be understood as ‘use in accordance with the bid’ and not as an absence of ‘misuse’ of the slots released, as alleged by the Commission.
This action for annulment is, however, dismissed by the First Chamber, Extended Composition, of the Court.
Findings of the Court
In its judgment, the General Court adopts a literal and systematic interpretation of Delta Air Lines’ obligation to make ‘appropriate use’ of the LHR airline slots released by American Airlines, while taking into account its purpose and context.
With respect to the literal interpretation of the term ‘appropriate use’, the Court notes that, in the original language of the airline slot commitments, namely English, the notion of ‘misuse’ does not necessarily have a negative connotation. The Commission, therefore, had not erred in taking the view that the term ‘misuse’ can be defined as ‘an occasion when something is used in an unsuitable way or in a way that was not intended’. According to the Court, equating ‘appropriate use’ with ‘absence of misuse’ in the Contested Decision is, therefore, reconcilable with the wording of the provisions in question.
However, the interpretation advanced by American Airlines, according to which appropriate use is to be understood, in principle, as use ‘in accordance with the bid’, while reserving a certain margin of appreciation for the Commission in that respect, is, according to the Court, also reconcilable with the terms ‘appropriate use’.
Since a mere literal interpretation of the airline slot commitments is not conclusive, the Court recalls that, to interpret a provision of EU law, account must be taken not only of the terms of that provision but also of its context and the objectives pursued by the legislation of which it forms part. Since the airline slot commitments form an integral part of the Clearance Decision, those principles are relevant when interpreting them. Thus, the Court states that the airline slot commitments must be interpreted in the light of the Clearance Decision, within the general framework of EU law, in particular in the light of the Merger Regulation, ( 3 ) and by reference to the Commission Notice on remedies acceptable under the Merger Regulation and the Implementing Regulation. ( 4 )
In that respect, the Court highlights the importance of the indications in the ‘Form RM’, which the Parties had provided to the Commission together with their proposals for the airline slot commitments. In accordance with the Implementing Regulation, ( 5 ) that Form RM contains the information and documents necessary to enable the Commission to examine whether the commitments submitted by the Parties are such as to render the concentration compatible with the internal market. To the extent that that Form RM derives from the Merger Regulation, the airline slot commitments, as annexed to the Clearance Decision, must also be interpreted in the light of the Form RM.
With regard to the Grandfathering rights over the LHR airline slots to be released, it follows from the Form RM provided by the Parties that the commitments proposed by the Parties are broadly similar to those provided for in the IAG/bmi case. ( 6 ) However, unlike the IAG/bmi Case Commitments, the LHR airline slot commitments require that the released slots be used during the utilisation period ‘in accordance with the bid’. Thus, American Airlines advanced a series of arguments aimed at demonstrating the relevance of the wording ‘in accordance with the bid’ in the airline slot commitments in interpreting the term ‘appropriate use’ and, therefore, in granting the Grandfathering rights.
Its arguments are, however, all dismissed by the Court, for whom the reference to the use of the slots ‘in accordance with the offer’ in the airline slot commitments only constitutes a minor linguistic change as compared to the IAG/bmi Case Commitments and does not result in any change in the requirements for Grandfathering in relation to that case. According to the Court, that interpretation could only be called into question if the Parties had brought it to the attention of the Commission that the deviation in wording from the proposed commitments constituted a substantial change from the IAG/bmi Commitments enshrined in the IAG/bmi case. The Form RM did not, however, address that point. Moreover, American Airlines had not presented any other useful evidence to demonstrate that the Parties had brought that deviation to the attention of the Commission.
Finally, the Court confirms that the Commission’s interpretation in the Contested Decision that ‘appropriate use’ is to be understood as the absence of ‘misuse’ is supported both by the systematic interpretation of the airline slot commitments and by their objective and context.
In the light of the foregoing, the Court dismisses the action for annulment in its entirety.
( 1 ) Decision C(2013) 5232, final of 5 August 2013 (Case COMP/M.6607 – US Airways/American Airlines) (OJ 2013 C 279, p. 6, ‘the Clearance Decision’).
( 2 ) Decision C(2018) 2788, final of 30 April 2018 (Case M.6607 US Airways/American Airlines).
( 3 ) Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1).
( 4 ) Commission notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 (OJ 2008 C 267, p. 1), point 6.
( 5 ) Annex 4 to Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (OJ 2004 L 133, p. 1, corrigendum OJ 2004 L 172, p. 9, ‘the Implementing Regulation’).
( 6 ) Case COMP/M.6447 – IAG/bmi (‘the IAG/bmi Case’), which gave rise to Commission Decision C(2012) 2320 of 30 March 2012 (OJ 2012 C 161, p. 2).