Proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 2299/89 on a code of conduct for computerised reservation systems (CRSs) (97/C 267/11) (Text with EEA relevance) COM(97) 246 final - 97/0148 (SYN)

(submitted by the Commission on 9 July 1997)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 75 and 84 (2) thereof,

Having regard to the proposal from the Commission,

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

Acting in accordance with the procedure referred to in Article 189c of the Treaty in cooperation with the European Parliament,

Whereas Council Regulation No 2299/89 (1) as amended by Regulation No 3089/93 (2) has made a major contribution to ensuring fair and unbiased conditions for air carriers in computer reservation systems, thereby protecting the interests of consumers;

Whereas it is necessary to extend the scope of Regulation No 2299/89 and to clarify its provisions and it is appropriate to take these measures at Community level to ensure that the objectives of the Regulation are met in all Member States;

Whereas this Regulation is without prejudice to the application of Articles 85 and 86 of the Treaty;

Whereas this Regulation is without prejudice to the application of the Directive 95/46/EC of the European Parliament and the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and of the free movement of such data;

Whereas Commission Regulation (EEC) No 3652/93 (3) as amended by the Act of Accession of Austria, Finland and Sweden, exempts from the provisions of Article 85 (1) of the Treaty agreements for the common purchase, development and operation of computer reservation systems;

Whereas systems providing information directly to the consumer by electronic means through public telecommunications networks should be brought within the scope of the code;

Whereas it is desirable to clarify the basis on which parent carriers should be charged for bookings they are required to accept from competing CRSs;

Whereas it is necessary to clarify the basis on which CRSs charge for the services they provide to participating carriers and subscribers to improve transparency;

Whereas it is necessary to ensure that third parties carrying out services on behalf of a CRS are subject to the same obligations the code imposes on that CRS;

Whereas the effectiveness of the code's CRS audit requirements has rendered unnecessary the separate assessment by the Commission of a CRS's data security arrangements;

Whereas it is necessary to include subscribers directly within the scope of the code so that the reservation services they provide to their customers are not inaccurate, misleading or discriminatory;

Whereas the right of a defendant to be heard on matters to which the Commission takes objection need to be expressly foreseen;

Whereas the integration of rail services into the CRS display of air transport services can improve the quality of information available to consumers and eliminate the wasteful duplication of distribution services;

Whereas rail operators distributing services through integrated air and rail CRSs should be subject to the same conditions as air carriers;

Whereas information or distribution facilities offered by carriers having joint venture or other contractual arrangements should not be subject to the code provisions;

Whereas the ranking criteria for the display of flights should provide consumers with the best options for their air travel arrangements,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation No 2299/89 is hereby amended as follows:

1. Article 1 is replaced by the following:

'Article 1

This Regulation shall apply to computerised reservation systems to the extent that they contain air transport products, with or without the incorporation of rail transport products, when offered for use and/or used in the territory of the Community, irrespective of:

- the status or nationality of the system vendor,

- the source of the information used or the location of the relevant central data processing unit,

- the geographical location of the airports between which air carriage takes place.`.

2. Article 2 is amended as follows:

a) Paragraph (l) is amended as follows:

'(l) "subscriber" means a person, other than a consumer, or an undertaking, other than a participating carrier, using a CRS under contract or other financial arrangement with a system vendor;`

b) Paragraph (m) is replaced by the following:

'm) "consumer" means any person seeking information about and/or intending to purchase an air transport product; where a system vendor has a financial arrangement with a consumer, the principles of neutrality of this Regulation shall apply;`

c) Paragraph (q) is added:

'(q) "rail transport operator" means any private or public undertaking whose main business is to provide rail transport services to passengers.`

d) Paragraphs (r), (s) and (t) are added

'(r) "unbundled rail transport product" means the carriage by rail of a passenger between two stations, including any related ancillary services and additional benefits offered for sale and/or sold as an integral part of that product;

(s) 'bundled rail transport product` means a pre-arranged combination of an unbundled rail transport product with other services not ancillary to rail transport, offered for sale and/or sold at an inclusive price;

(t) "rail transport product" means both unbundled and bundled rail transport products;`

3. Article 3a. is amended as follows:

a) Subparagraph 1.(b) is replaced by the following:

'(b) The patent carrier shall not be obliged to accept any costs in this connection except for reproduction of the information to be provided and for accepted bookings. The booking fee payable to a CRS for an accepted booking made in accordance with this Article should not exceed the fee charged by the same CRS for the nearest equivalent transaction.`

b) Paragraph 2 is replaced by the following:

'2. The obligation imposed by the Article shall not apply in favour of a competing CRS when, in accordance with the procedures of Article 11, it has been decided that the CRS is in breach of Article 4a or Article 6 concerning unauthorised access of parent carriers to information.`

4. Article 4a.4 is added:

'4. The system vendor shall ensure that any third parties providing in whole or in part CRS services on its behalf respect the relevant provisions of this regulation.`

5. Articles 6.4 and 6.5 are deleted.

6. The following Article 9.a is inserted:

'Article 9a

1. (a) As regards information provided by a CRS, a subscriber shall use a neutral display in conformity with Article 5.2 (a) and (b) unless another display is required to meet a preference indicated by a consumer.

(b) A subscriber shall not manipulate information provided by a CRS in a manner that will lead to inaccurate, misleading or discriminatory presentation of such information to the consumer.

(c) A subscriber shall make reservations and issue tickets in conformity with the information contained in the CRS used or as authorised by the carrier concerned.

(d) A subscriber shall inform the consumer of any en-route changes of equipment, the number of scheduled en-route stops, the identity of the air carrier actually operating the flight, and of any changes of airport required in any itinerary provided, to the extent that this information is present in the CRS.

(e) A consumer shall be entitled at any time to have a print out of the CRS display or be provided with access to a parallel CRS display reflecting the same image being displayed to the subscriber.

2. A subscriber shall use the distribution facilities of a CRS as described in Annex II of this code`

7. Article 10.1 is replaced by the following:

'1. (a) Any fee charged to a participating carrier by a system vendor shall be non-discriminatory, reasonably structured and reasonably related to the cost of the service provided and used and shall, in particular, be the same for the same level of service.

The billing for the services of a CRS shall be sufficiently detailed to allow the participating carriers to see exactly which services have been used and the fees therefor; as a minimum, booking fee bills must include the following information for each segment:

- type of CRS booking,

- passenger name,

- country,

- IATA/ARC agency identification code,

- city-code,

- city pair of segment,

- booking date (transaction date),

- flight date,

- flight number,

- status code (booking status),

- service type (class of service),

- PNR record locator,

- booking/cancellation indicator.

The billing information shall be offered on magnetic media. The fee to be charged for the billing information provided on magnetic media shall not exceed the cost of the media itself together with transportation costs thereof.

A participating air carrier shall be offered the facility of being informed at the time that any booking/transaction is made for which a booking fee will be charged. Where a carrier elects to be so informed, it shall be offered the option to disallow such booking/transaction, unless the latter has already been accepted.

(b) Any fee for equipment rental or other service charged to a subscriber by a system vendor shall be non-discriminatory, reasonably structured and reasonably related to the cost of the service provided and used and shall, in particular, be the same for the same level of service. Productivity based benefits awarded to subscribers by system vendors in the form of discounts on rental charges or commission payments, are considered as distribution costs of the system vendor.

The billing for the services of a CRS shall be sufficiently detailed to allow subscribers to see exactly which services have been used and the fees therefor;`

8. Article 19.1 is replaced by the following:

'1. Before taking decisions pursuant to Articles 11 or 16, the Commission shall give the undertakings or associations of undertakings concerned the opportunity of being heard on the matters to which the Commission takes, or has taken, objection.`

9. Article 21 is replaced by the following:

'Article 21

The provisions in Article 5, Article 9 (5) and the Annex to this Regulation shall not apply to a CRS used by an air carrier or a group of air carriers, which have a joint venture or other contractual arrangement, but excluding interline agreement, in its (their) own office(s) and sales counters clearly identified as such.`.

10. Article 21a.1 is replaced by the following:

'1. The system vendor shall ensure that the technical compliance of its CRS with Articles 4a and 6 is monitored by an independent auditor on a calendar year basis. For this purpose, the auditor shall be granted access at any time to any programs, procedures, operations and safeguards used on the computers or computer systems through which the system vendor is providing its distribution facilities. Each system vendor shall submit its auditor's report on his inspection and findings to the Commission within four months of the end of the calendar year under review. This report shall be examined by the Commission with a view to any necessary action in accordance with Article 11 (1).`

11. The following Articles 21b and 21c are added:

'Article 21b

A rail transport operator will be considered as a participating carrier for the purposes of the code on condition that it has an agreement with a system vendor for the distribution of its products through a CRS. Its services shall be treated in the same manner as air transport products and be incorporated into the principal display in accordance with the criteria set out in Annex I. to the code. All references to "flights" in this Regulation shall be deemed also to include references to "rail travel".

Article 21c

Where two or more carriers have a joint venture or other contractual arrangement, but excluding interline agreement, to provide information and/or distribution facilities accessible through a public telecommunications network, clearly identifying the arrangement as such, the information/distribution facilities will not be subject to the provisions of the code.`

12. Article 22.1 is replaced by the following:

'Article 22.1

This Regulation shall be without prejudice to national legislation on security, public order and data protection measures taken in application of Directive 95/46/CE.`

13. Article 23 is replaced by the following:

'Article 23

The Council shall decide on the revision of this Regulation by 31 December 2002 at the latest, on the basis of a Commission proposal to be submitted by 31 March 2002, accompanied by a report on the application of this Regulation.`

14. The Annex is replaced by Annex I and Annex II set out in the Annex.

Article 2

This Regulation shall enter into force on the 30th 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 L 220, 29. 7. 1989, p. 1.

(2) OJ L 278, 11. 11. 1993, p. 1.

(3) OJ L 333, 31. 12. 1993, p. 37.

ANNEX

'ANNEX I

PRINCIPAL DISPLAY RANKING CRITERIA FOR FLIGHTS OFFERING UNBUNDLED AIR TRANSPORT PRODUCTS.

1. Ranking of flight options in a principal display, for the day or days requested, shall be in the following order unless requested in a different way by a consumer for an individual transaction:

(i) all non-stop direct flights between the city-pairs concerned;

(ii) all other flights.

2. A consumer shall at least be afforded the possibility of having, on request, a principal display ranked by departure or arrival time and/or elapsed journey time. Unless otherwise requested by a consumer, a principal display shall be ranked by departure time for group (i) and elapsed journey time for group (ii).

3. Where a system vendor chooses to display information for any city-pair in relation to the schedules or fares of non-participating carriers, but not necessarily all such carriers, such information shall be displayed in an accurate, non-misleading and non-discriminatory manner between carriers displayed.

4. If, to the system vendor's knowledge, information on the number of direct scheduled air services and the identity of the air carriers concerned is not comprehensive, this shall be clearly stated on the relevant display.

5. Flights other than scheduled air services shall be clearly identified.

6. Flights involving stops en route shall be clearly identified.

7. Where flights are operated by an air carrier which is not the air carrier identified by the carrier designator code, the actual operator of the flight shall be clearly identified. This requirement shall apply in all cases, except for short-term ad hoc arrangements.

8. A system vendor shall not use the screen space in a principal display in a manner which gives excessive exposure to one particular travel option or which displays unrealistic travel options.

9. Except as provided for in paragraph 10, the following shall apply:

(a) for direct services, no flights shall be featured more than once in a principal display;

(b) for multi-sector services involving a change of aircraft, no combination of flights shall be featured more than once in a principal display;

(c) flights involving a change of aircraft shall be treated and displayed as connecting flights, with one line per aircraft segment.

Nevertheless, where the flights are operated by the same carrier with the same flight number and where a carrier only requires only one flight coupon and one reservation, a CRS should only issue one coupon and charge for one reservation.

10. 1. Where participating carriers have joint venture or other contractual arrangements requiring two or more of them to assume separate responsibility for the offer and sale of air transport products on a flight or combination of flights, the terms 'flight` (for direct services and 'combination of flights` (for multi-sector services) in paragraph 9 shall be interpreted as allowing each of the carriers concerned - up to a maximum of two - to have a separate display using its individual carrier designator code.

2. Where more than two carriers are involved, designation of the two carriers entitled to avail themselves of the exception provided for in subparagraph 1 shall be a matter for the carrier actually operating the flight. In the absence of sufficient information from the operating carrier to identify the two carriers to be designated, a system vendor may designate the carriers on a non-discrimination basis.

11. A principal display shall, wherever practicable, include connecting flights on scheduled services which are operated by participating carriers and are constructed by using a minimum number of nine connecting points. A system vendor shall accept a request by a participating carrier, to include an indirect service, unless the routing is in excess of 130 % of the great circle distance between the two airports or except where this would lead to the exclusion of services with a shorter elapsed journey time. Connecting points with routings in excess of 130 % need not be used.

ANNEX II

USE OF DISTRIBUTION FACILITIES BY SUBSCRIBERS

1. A subscriber shall keep accurate records covering all CRS reservation transactions. These shall include flight numbers, reservations booking designators, date of travel, departure and arrival times, status of segments, names and initials of passengers with their contact address and/or telephone number and ticketing status. When booking or cancelling space, the subscriber must ensure that the reservation designator being used corresponds to the fare paid by the passenger.

2. A subscriber shall not make duplicate reservations for the same passenger. In cases where confirmed space is not available on the customer's choice, the passenger may be waitlisted on that flight (if wait-list is available) and confirmed on an alternate flight.

3. Whenever a passenger cancels a reservation, the subscriber must immediately release such space.

4. When a passenger changes an itinerary, the subscriber shall ensure that all space and supplementary services are cancelled at the time the new reservations are made.

5. A subscriber shall, where practicable, request or process all reservations for a specific itinerary, and all subsequent changes, through one CRS.

6. A subscriber shall only request or sell airline space when requested to do so by a consumer.

7. A subscriber shall ensure that a ticket is issued in accordance with the reservation status of each segment and in accordance with the applicable time limit. A subscriber shall not issue a ticket indicating a definite reservation and a particular flight unless confirmation of such reservation has been received.`