Proposal for a Council Regulation (EC) on the application of Article 85 (3) of the Treaty to certain categories of agreements and concerted practices in the sector of air transport between the Community and third countries (97/C 165/08) (Text with EEA relevance) COM(97) 218 final - 97/0138(CNS)

(Submitted by the Commission on 20 May 1997)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 87 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

Whereas Council Regulation (EEC) No 3975/87 (1), as last amended by Regulation (EEC) No 2410/92 (2), lays down the procedure for the application of the rules on competition to undertakings in the air transport sector;

Whereas international air transport between the Community and third countries is at present governed by a network of international and bilateral agreements between Member States and third countries; whereas many of these agreements encourage or allow air carriers to cooperate in matters of commercial importance; whereas in observing these agreements air carriers should not infringe the Treaty's competition rules, which apply fully to all air transport activities within the scope of Community law; whereas the application of the competition rules must nevertheless take account of the desirability of dealing with any conflicts of rules, paying due regard to Community law; whereas air carriers should be enabled to conduct their business within a framework affording a reasonable degree of legal certainty in relation to the competition rules;

Whereas the Commission should therefore be enabled to declare by way of Regulation that the provisions of Article 85 (1) do not apply to certain categories of agreements between undertakings, decisions by associations of undertakings and concerted practices;

Whereas it is desirable, in particular, that block exemptions be granted for certain categories of agreements, decisions and concerted practices; whereas the Commission, in close liaison with the Member States, should be able to define precisely the scope of these exemptions and the conditions attached to them;

Whereas there can be no exemption if the conditions set out in Article 85 (3) are not satisfied; whereas the Commission should therefore have the power to take the appropriate measures where an agreement proves to have effects incompatible with Article 85 (3); whereas it should consequently be able first to address recommendations to the parties and then to take decisions;

Whereas this Regulation is without prejudice to the application of Articles 86 and 90 of the Treaty,

HAS ADOPTED THIS REGULATION:

Article 1

This Regulation shall apply to international air transport between the Community and third countries.

Article 2

1. Without prejudice to the application of Regulation (EEC) No 3975/87 and in accordance with Article 85 (3) of the Treaty, the Commission may, by Regulation, declare that Article 85 (1) shall not apply to certain categories of agreements between undertakings, decisions by associations of undertakings and concerted practices on international air routes between the Community and one or more third countries.

2. The Commission may, in particular, adopt such Regulations in respect of agreements, decisions or concerted practices which have as their object any of the following:

(a) joint planning of, and coordination of capacity and timetables on, a scheduled air service;

(b) sharing of revenue from a scheduled air service;

(c) holding of consultations on tariffs for the carriage of passengers with their accompanying baggage;

(d) joint operation of a scheduled air service on a new or less busy route;

(e) slot allocation at airports and airport scheduling; the Commission shall take care to ensure the consistency of these rules with the Code of Conduct adopted by the Council.

3. Without prejudice to paragraph 2, such Commission Regulations shall define the categories of agreements, decisions or concerted practices to which they apply and shall specify in particular:

(a) the restrictions or clauses which may, or may not, appear in the agreements, decisions and concerted practices;

(b) the clauses which must be contained in the agreements, decisions and concerted practices, or any other conditions which must be satisfied;

(c) the routes to which they apply.

Article 3

A Regulation adopted pursuant to Article 2 shall apply for a specified period.

It may be repealed or amended where circumstances have changed with respect to any factor which was fundamental to its adoption; in such a case, a period shall be fixed for modification of the agreements and concerted practices to which the earlier Regulation applies.

Article 4

Regulations adopted pursuant to Article 2 may include a provision that they apply with retroactive effect to agreements, decisions and concerted practices which were in existence on the date of the entry into force of such Regulations.

Article 5

Before adopting a Regulation, the Commission shall publish a draft thereof and invite all persons and organizations concerned to submit their comments within such reasonable time limit, being not less than one month, as the Commission shall fix.

Article 6

The Commission shall consult the Advisory Committee on Agreements and Dominant Positions in Air Transport established by Article 8 (3) of Regulation (EEC) No 3975/87 before publishing any such draft Regulation and before adopting any such Regulation.

Article 7

1. Subject to paragraph 4, where the natural or legal persons concerned are in breach of a condition or obligation which attaches to an exemption granted by a Regulation adopted pursuant to Article 2, the Commission may, in order to put an end to such a breach:

(a) address recommendations to the persons concerned, and

(b) in the event of failure by such persons to observe those recommendations, and depending on the gravity of the breach concerned, adopt a decision that either prohibits them from carrying out, or requires them to perform, specific acts or, while withdrawing the benefit of the block exemption which they enjoyed, grants them an individual exemption in accordance with Article 4 (3) of Regulation (EEC) No 3975/87 or withdraws the benefit of the block exemption which they enjoyed.

2. Subject to paragraph 4, where the Commission, either on its own initiative or at the request of a Member State or of natural or legal persons claiming a legitimate interest, finds that in any particular case an agreement, decision or concerted practice to which a block exemption granted by a Regulation adopted pursuant to Article 2 (2) applies nevertheless has effects which are incompatible with Article 85 (3) or are prohibited by Article 86, it may withdraw the benefit of the block exemption from those agreements, decisions or concerted practices and take, pursuant to Article 13 of Regulation (EEC) No 3975/87, all appropriate measures for the purpose of bringing these infringements to an end.

3. Before taking a decision pursuant to paragraph 2, the Commission may address recommendations for termination of the infringement to the persons concerned.

4. To the extent that the situation referred to in paragraph 1 or in paragraph 2 results from provisions laid down by law, regulation or administrative action of a third country or from the provisions of an air service agreement between a Member State and a third country, the Commission shall, before withdrawing the benefit of the block exemption, apply Article 18a of Regulation (EEC) No 3975/87.

Article 8

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

(1) OJ No L 374, 31. 12. 1987, p. 1.

(2) OJ No L 240, 24. 8. 1992, p. 18.