Keywords
Summary

Keywords

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1 . Competition - Agreements, decisions and concerted practices - Bilateral or multilateral agreements regarding airline tariffs between airlines - Void - Conditions

( EEC Treaty, Arts 85, 88 and 89; Council Regulation No 3975/87, Art . 5 )

2 . Competition - Dominant position - Abuse - Absolute prohibition - Application of the transitional rules laid down in Articles 88 and 89 of the Treaty - No impact

( EEC Treaty, Arts 85 to 89 )

3 . Competition - Agreements, decisions and concerted practices - Agreements between undertakings - Concept - Agreements between parent company and subsidiaries having no real commercial independence - Exclusion

( EEC Treaty, Art . 85 )

4 . Competition - Community rules - Simultaneous application of Articles 85 and 86 of the Treaty - Permissibility - Tariff agreements imposed by an undertaking holding a dominant position

( EEC Treaty, Arts 85 and 86 )

5 . Competition - Dominant position - Abuse - Application of air tariffs adopted by agreements between undertakings - Criteria for assessment

( EEC Treaty, Art . 86 )

6 . Competition - Community rules - Obligations of the Member States - Approval of tariff agreements contrary to the rules of the Treaty - Incompatibility

( EEC Treaty, Arts 5, 85, 86 and 90(1 ) )

7 . Competition - Undertakings entrusted with the operation of services of general economic interest - Limitation of the effects of the rules of competition - Permissibility - Conditions

( EEC Treaty, Art . 90(2 ) )

Summary

1 . Bilateral or multilateral agreements regarding airline tariffs applicable to scheduled flights are automatically void under Article 85(2 ) of the Treaty :

( i ) in the case of tariffs applicable to flights between airports in a given Member State or between such an airport and an airport in a non-member country : where either the authorities of the Member State in which the registered office of one of the airlines concerned is situated or the Commission, acting under Article 88 and Article 89 respectively, having ruled or recorded that the agreement is incompatible with Article 85;

( ii ) in the case of tariffs applicable to international flights between airports in the Community : where no application for exemption of the agreement from the prohibition set out in Article 85(1 ) has been submitted to the Commission under Article 5 of Regulation No 3975/87; or where such an application has been made but received a negative response on the part of the Commission within 90 days of the publication of the application in the Official Journal; or again where the 90-day time-limit expired without any response on the part of the Commission but the period of validity of the exemption of six years laid down in the aforesaid Article 5 has expired or the Commission withdrew the exemption during that period .

2 . The sole justification for the continued application of the transitional rules set out in Articles 88 and 89 is that the agreements, decisions and concerted practices covered by Article 85(1 ) may qualify for exemption under Article 85(3 ) and that it is through the decisions taken by the institutions which have been given jurisdiction, under the implementing rules adopted pursuant to Article 87, to grant or refuse such exemption that competition policy develops . In contrast, no exemption may be granted, in any manner whatsoever, in respect of abuse of a dominant position; such abuse is simply prohibited by the Treaty and it is for the competent national authorities or the Commission, as the case may be, to act on that prohibition within the limits of their powers . The prohibition laid down in Article 86 of the Treaty is fully applicable to the whole of the air transport sector .

3 . Article 85 of the Treaty does not apply where the concerted practice in question is between undertakings belonging to a single group as parent company and subsidiary if those undertakings form an economic unit within which the subsidiary has no real freedom to determine its course of action on the market .

4 . The simultaneous application of Articles 85 and 86 of the Treaty cannot be ruled out where a tariff agreement between two or more undertakings simply constitutes the formal measure setting the seal on an economic reality characterized by the fact that an undertaking in a dominant position has succeeded in having the tariffs in question applied by the other undertakings .

5 . The application of tariffs for scheduled flights on the basis of bilateral or multilateral agreements may, in certain circumstances, constitute an abuse of a dominant position on the market in question, in particular where an undertaking in a dominant position has succeeded in imposing on other carriers the application of excessively high or excessively low tariffs or the exclusive application of only one tariff on a given route .

6 . While it is true that the competition rules set out in Articles 85 and 86 concern the conduct of undertakings and not measures of the authorities in the Member States, Article 5 of the Treaty nevertheless imposes a duty on those authorities not to adopt or maintain in force any measure which could deprive those competition rules of their effectiveness . That would be the case, in particular, if a Member State were to require or favour the adoption of agreements, decisions or concerted practices contrary to Article 85 or reinforce their effects .

It follows that the approval by the aeronautical authorities of tariff agreements contrary to Article 85(1 ) or, as the case may be, Article 86, is not compatible with Community law and in particular with Article 5 of the Treaty and that both the aeronautical authorities and the Community institutions must refrain from taking any measure which might be construed as encouraging airlines to conclude such agreements .

In the specific case of tariffs for scheduled fights that interpretation of the Treaty is borne out by Article 90(1 ) according to which national authorities must not, in the case of undertakings to which they grant special or exclusive rights - such as rights to operate on an air route alone or with one or two other undertakings - enact or maintain in force any measures contrary to the competition rules laid down in Articles 85 and 86 .

7 . Article 90(2 ) of the Treaty may be appicable to air carriers who are obliged, by the public authorities, to operate on routes which are not commercially viable but which it is necessary to operate for reasons of the general interest . However, for it to be possible for the effect of the competition rules to be restricted pursuant to Article 90(2 ) by needs arising from performance of a task of general interest, the national authorities responsible for the approval of tariffs and the courts to which disputes relating thereto are submitted must be able to determine the exact nature of the needs in question and their impact on the structure of the tariffs applied by the airlines in question .