12. 9. 88 Official Journal of the European Communities No C 237/11 
3.6. Article 3 (4) 
This paragraph is not completely clear as no definition 
is provided of unfair tariffs and conditions. Who decides 
what is unfair? The Committee understands and en­
dorses what the Commission is trying to achieve in 
this paragraph, but considers that the wording needs 
improving. 
3.7. Article 3 (6) 
As regards the time required to withdraw from an 
agreement without penalty, the Commission has stated 
that it wishes to retain the current provisions of the 
International Air Transport Association (IATA) agree­
ment. This paragraph should therefore read as follows: 
'Unless otherwise agreed, such Agreements shall 
remain in force until one of the two parties 
Done at Brussels, 6 July 1988. 
1. Background 
1.1. As part of the agreement in December 1987 on 
air transport the Council asked the Commission to 
(J) ESC Opinion (OJ No C 333, 29. 12. 1986, p. 27). 
(2) JO No C 138, 28. 5. 1988, p. 6, and Council Regulation (EEC) 
No 3976/87, 14 december 1987 (OJ No L 374, 31. 12. 1987, 
p. 9). denounces it, giving the other party sixty days' 
notice. Notification of the termination of all or 
some of the services provided at a particular place 
must be given by one of the two parties sixty days 
beforehand, unless otherwise specified.' 
Note 
The Committee wishes to express its concern over the 
differences between the English, French and Spanish 
versions. It does not know if the same applies to the 
other languages, but at all events recommends that the 
versions be aligned so as to prevent the Regulation from 
being interpreted in different ways. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT 
provide a block exemption to joint ventures between 
airlines on computer reservation systems (CRS). In 
practice the proposed block exemption will apply to 
two groups currently establishing a CRS: Amadeus (the 
principal members being Lufthansa, Air France, SAS, 
Iberia) and Galileo (principal members being British 
Airways, Alitalia, KLM, Swissair, Sabena, TAP, 
Olympic, Aer Lingus and Covia). Additional Opinion (!) on the draft Commission Regulation (EEC) on the application of 
Article 85 (3) to certain categories of agreements between undertakings relating to computer 
reservation systems for air transport services (2) 
(88/C 237/04) 
On 22 March 1988 the bureau of the Economic and Social Committee, acting under the third 
paragraph of Article 20 of the rules of procedure, decided to prepare an Opinion on the 
abovementioned matter. 
The Section for Transport and Communications, was responsible for preparing the Commit­
tee's work on the subject. The rapporteur was Mr Moreland. 
Since the Commission intended to adopt the Regulation in question at an early date, 
Mr Moreland was subsequently appointed rapporteur-general with the task of preparing a 
draft Opinion. 
At the 257th plenary session (meeting of 6 July 1988) the Economic and Social Committee 
adopted the following Opinion unanimously. 
No C 237/12 Official Journal of the European Communities 12. 9. 88 
1.2. The block exemption has to be considered 
because—prima facie—joint ventures between airlines 
would be contrary to the Community competition laws. 
However there has been more general concern about 
CRS not just in terms of the legal requirements of the 
Community but also as being contrary to the consumer 
interest and discriminatory as between the presentation 
of airlines schedules. A further concern has been the 
efforts by non-European based airlines in particular by 
certain United States airlines to establish their own CRS 
in Europe. This latter issue has been heightened by legal 
cases being taken by US airlines (particularly American 
Airlines versus British Airways over ,Sabre'). 
1.3. As a consequence of the concern over CRS 
potential abuse the European Civil Aviation Conference 
(ECAC) has devised a code of conduct for CRS and the 
Commission is shortly to make a proposal to Council 
taking into account the ECAC code. A draft proposal 
has already been prepared by the Commission and 
has been discussed with representatives of the Member 
States. It is more comprehensive than the block exemp­
tion in that it applies to all CRS in the Community 
and introduces more provisions—the provisions in the 
proposed Regulation would be covered by this block 
exemption. 
This Opinion, however, simply comments on the block 
exemption—although as will be seen from para­
graph 2—the two are difficult to consider separately. 
2. Possible steps by the Commission 
2.1. CRS can extend substantially the range of ser­
vices available to the passenger by providing infor­
mation on and making reservations for a wide range 
of travel services in addition to airline reservations. 
Such services include car-hire, hotels and ground trans­
portation. CRS can provide speedy ticketing and assist 
airlines to cater for the special meals of passengers 
(such as diet meals, specific seat allocation etc.). In sum 
the development of CRS is to be welcomed as being of 
considerable benefit to the travelling public. 
2.2. Nevertheless the Committee can understand the 
concern, that CRS owned by airlines may, through the 
way in which information is displayed, work to the 
detriment of the traveller and that some regulation is 
required. However, the Committee notes that criticism is not directed towards colusion between the airlines. 
Consequently, the Committee accepts that CRS under 
the joint ownership of different airlines should not in 
itself be a cause of abuse (indeed may be less liable to 
abuse than a CRS owned by a single airline) and that 
exemption under the provisions of Article 85 (1) and 
85 (3) of the Treaty is desirable. 
2.3. It is clearly important to clarify the legal position 
for Amadeus and Galileo. Although these systems are 
unlikely to be available to travel agents for at least 
a year, both organizations have to plan ahead and 
consequently should know the legal restraints under 
which they must operate as soon as possible. 
2.4. However, a dilemma is posed by the timing of 
the block exemption regulation which will come before 
the expected general regulation on CRS which is likely 
to be proposed formally by the Commission very shortly 
and sent to the Parliament and this Committee for an 
Opinion later this year prior to a Council decision. 
2.5. The expected general regulation will overlap 
most of the main parts in the block exemption proposal 
(and in some respects in more detail). Consequently, 
had this general regulation preceded the block exemp­
tion proposal, a block exemption with only a minimum 
of conditions would have been required. 
2.6. Clearly, both regulations must be compatible. 
Consequently, should the Council decide to take a 
different view on e.g. access, display, information load­
ing from those in the block exemption a distortion of 
competition could occur. 
2.7. Under the circumstances outlined in paragraphs 
2.3, 2.4, 2.5 and 2.6 the Committee suggests that both 
the Advisory Committee on agreements and dominant 
positions in air transport and the Commission should 
consider delaying a decision on the block exemption 
until they have some comprehension of the view of the 
Council, Parliament and this Committee on the general 
Regulation. 
Nevertheless the Committee realizes that there cannot 
be protracted delay in the light of the uncertainties for 
Galileo and Amadeus. It also emphasizes the need to 
give speedy attention to the general Regulation so that 
it can be approved as soon as possible. 
12. 9. 88 Official Journal of the European Communities No C 237/13 
3. General comments on the proposal 
3.1. Subject to the comments in the previous section, 
the Committee, in general, supports the proposal. Joint­
ly owned systems must be competitive, any dominance 
by one system in a Member State must be a result of 
relative efficiency in a competitive environment. How­
ever should dominance be caused by other circum­
stances and it appears that the dominance is a reflection 
solely or mainly of the ownership of the system, (e.g. 
if Galileo is dominant in the United Kingdom, Italy, 
Switzerland, Holland etc. and Amadeus in France, 
Spain, Germany, etc.) then the Commission should 
make clear that this would be a cause of radical revision 
of the block exemption in 1991. 
3.2. It is unclear whether the draft is intended to 
cover charter as well as scheduled services. It is under­
stood that both Galileo and Amadeus would have to 
design additional CRS products for charter carriers. 
The Committee believes that the Commission could 
initially not require charter flights to be included but 
should make clear that if this is clearly to the detriment 
of charter airlines, tour operators and consumers that 
the position must be altered. The same remarks apply 
to the inclusion of freight services. 
3.3. The proposal places obligations on parent car­
riers and system vendors in relations to the rights of 
other airlines and other systems vendors. However it 
does not necessarily place reciprocal obligations on 
those airlines and system vendors given rights. The 
Committee considers this could be unduly discriminat­
ory against joint venture CRS and proposes that either 
a separate article on reciprocity be included or amend­
ments made to the text as indicated in points 4.6 and 
4.12. 
4. Specific comments on the proposal 
4.1. Preamble 4 
'The CRS market (...) cooperation'. 
The references to cooperation between air carriers 
should be changed to reflect cooperation between 
undertakings. This would line up with Article 1 'Scope'. 
4.2. Preamble 8 
'The agreements (...) Regulation'. 
The exemption Regulation must be related to the basic 
enabling text particularly as the Council took the view that CRS falls within the framework of a Regulation 
concerning air transport. Consequently Council Regu­
lation No 17 should be replaced by Article 3 and 5 of 
Council Regulation (EEC) No 3975/87. 
4.3. Article 1: Scope 
It is assumed that the scope of the proposal is intended 
to be restricted to the supply of CRS services to sub­
scribe within the European Community. Consequently 
the Article should clearly define the territorial appli­
cation of the exemption regulation. 
4.4. Article 2: Definitions 
Parent carrier: 
The definition appears unduly narrow. The wording 
should be such as to include air carriers that have 
effective share participation in a system vendor through 
a corporate affiliate or other indirect means of owner­
ship. Also the definition should include airlines that are 
systems vendors as well as those that own shares or are 
partners. 
4.5. Article 2: Definitions 
Candidate carrier: 
This phrase is not defined here but is later used (in 
Article 3). For the sake of clarity is should be defined. 
4.6. Article 3 (1): Access 
'Reciprocity' is obviously of importance but no mention 
is made of the level or quality of reciprocal access. This 
Article should include a sentence indicating that the 
level and quality of reciprocal access must be compar­
able to that provided by the system vendor to the extent 
that is feasible. 
4.7. Article 4 (1): Display 
Rules regarding display are expressed in general terms. 
Similar general rules did not prevent abuse in the United 
States of America. This Article should be superseded by 
the more detailed requirements expected in the general 
Regulation. 
4.8. Article 5: Information Loading 
It should be made clear that equality of treatment 
obligations are subject to the technical constraints of 
both the CRS and the participant—provided this does 
not lead to any signifiant discrimination. 
No C 237/14 Official Journal of the European Communities 12. 9. 88 
4.9. Article 6: Fees 
The Article should add that the fees should be pub­
lished. 
4.10. Article 7: Contracts with subscribers 
The termination notice should be a minimum of 
3 months and a maximum of 3 years (which is consistent 
with ECAC, although the latter does not specify a 
minimum contract period). 
4.11. Article 8: Commissions 
The Committee supports this clause but believes airlines 
should have the right to take action against subscribers 
to safeguard their integrity by, for example, refusing to 
allow ticketing or pay commissions to unscrupulous 
agents. 4.12. Article 10 (iv) 
A parent carrier should have reciprocal rights to partici­
pation in competing CRS. The Commission should 
make clear that failure to allow such rights would 
be an 'objective and legitimate reason' for refusal to 
participate in a competing CRS. 
4.13. Additional Article (perhaps after Article 2) 
It should be made clear that all data relating to a 
participating carrier should be passed on to a parent 
carrier only on the same terms as they are made avail­
able to all participating carriers except that data relating 
to any individual should be made available only to the 
carriers involved in the booked journey. 
Done at Brussels, 6 July 1988. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT 
Opinion on the completion of the internal market: Approximation of indirect tax rates and 
harmonization of indirect tax structure (Global communication from the Commission) 
(88/C 237/05) 
On 11 September 1987 the Council decided to consult the Economic and Social Committee 
under Article 198 of the Treaty establishing the European Economic Community, on the 
abovementioned communication. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its Opinion on 11 and 12 April 
1988. The rapporteur was Mrs Robinson. 
At its 257th plenary session (meeting of 7 July 1988), the Economic and Social Committee 
adopted the following Opinion by 112 votes to 8 with 11 abstentions. 
1. Introduction 
The Commission's proposals can be summarized as 
follows: the creation of an internal market will promote 
economic growth; this requires (among other things) 
the abolition of fiscal frontiers and to this end the 
Commission proposes that the concept of imports and 
exports between the Member States should end and that value added tax (VAT) on sales between Member 
States should be as on domestic sales. A clearing house 
should be established to ensure a proper distribution of 
VAT revenues. In order to present distortions of trade 
and competition following the removal of border 
adjustments for VAT the Commission proposes an 
approximation of VAT rates. Two rates of VAT are 
proposed with individual countries allowed a band of