Airtours plc v Commission
To prohibit a merger on the ground of collective dominance, the Commission must prove that the market is transparent, that there is a mechanism to deter deviation, and that the reactions of competitors and customers would not jeopardise the common policy.
Facts
Airtours, a British tour operator, proposed to acquire First Choice, another tour operator. The European Commission prohibited the acquisition, on the ground that it would create a collective dominant position among the three largest remaining tour operators in the market for short haul foreign package holidays in the United Kingdom, which would have an incentive to restrict capacity. Airtours challenged the decision.
Legal principle
The General Court annulled the decision. The court said that three conditions are necessary for a finding of collective dominance: each member of the dominant oligopoly must have the ability to know how the other members are behaving, so that the market must be sufficiently transparent; the situation of tacit coordination must be sustainable over time, which requires an incentive not to depart from the common policy, such as the threat of retaliation; and the foreseeable reaction of current and future competitors, and of consumers, must not jeopardise the results expected from the common policy. The Commission had failed to prove these conditions to the requisite standard, and its analysis was vitiated by errors. The decision was a serious blow to the Commission's merger control.
Related cases on merger control
- Bertelsmann AG and Sony Corp of America v Independent Music Publishers and Labels Association (Impala) Case C-413/06 P, [2008] ECR I-4951
- British Sky Broadcasting Group plc v Competition Commission [2010] EWCA Civ 2
- CK Telecoms UK Investments Ltd v Commission Case T-399/16, EU:T:2020:217
- Commission v Tetra Laval BV Case C-12/03 P, [2005] ECR I-987
- Gencor Ltd v Commission Case T-102/96, [1999] ECR II-753
- IBA Health Ltd v Office of Fair Trading [2004] EWCA Civ 142
- Illumina Inc v Commission Joined Cases C-611/22 P and C-625/22 P, EU:C:2024:677
- Meta Platforms Inc v Competition and Markets Authority [2022] CAT 26
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