Proposal for a Regulation of the European Parliament and of the Council on a code of conduct for computerised reservation systems {SEC(2007)1496} {SEC(2007)1497}
Date: 2007-11-15
Institutions: European Commission
Subjects: carriage of passengers, code of conduct, information system, information technology applications, organisation of transport, reservation, ticket

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.11.2007 
COM(2007) 709 final 

2007/0243 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on a Code of Conduct for computerised reservation systems 

(presented by the Commission) 

{SEC(2007)1496} 
{SEC(2007)1497} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The  Code  of  Conduct  for  Computerised  Reservation  Systems  was  established  in 
1989 by Regulation 2299/89 when the vast majority of airline bookings were made 
through  CRSs  and  most  of  the  CRSs  were  owned  and  controlled  by  airlines. 
Significant  market  developments,  such  as  the  rise  of  alternative  booking  channels, 
have rendered the Code of Conduct increasingly ill-adapted to the market conditions: 
in  fact,  it  is  impeding  competition  and  thereby  contributing  to  higher  distribution 
costs than necessary. 

The  proposal  aims  to  significantly  simplify  the  Code  of  Conduct  and  to  reinforce 
competition between the CRS providers while maintaining basic safeguards against 
potential competitive abuses, especially in the case of close links between CRSs and 
airlines, and ensuring the provision of neutral information to consumers. 

•  General context 

Computerised  Reservation  Systems  (CRSs)  provide  customers  with  instantaneous 
information  about  the  availability  of  air  transport  services  and  the  fares  for  such 
services.  They  permit  travel  agents,  whether  brick-and-mortar  or  on-line,  to  make 
immediate confirmed reservations on behalf of the consumer. 

The  Code  of  Conduct  for  Computerised  Reservation  Systems  ("the  Code  of 
Conduct") was first established in 1989 with the adoption of Regulation 2299/89. At 
that  time  the  vast  majority  of  airline  bookings  were  made  through  CRSs.  For  air 
travel,  consumers  could  practically  only  rely  on  one  single  information  and 
distribution channel, the one constituted by CRSs and travel agents. In addition, most 
of  the  CRSs  were  owned  and  controlled  by  airlines.  This  combination  of  facts 
created  particular  risks  of  competitive  abuse  for  which  general  competition  rules 
were  not  sufficient  and  for  which  specific  ad  hoc  rules  in  the  form  of  a  Code  of 
Conduct  were  necessary.  The  Code  of  Conduct  was  established  with  the  aim  of 
improving transparency and preventing discriminatory behaviour both by the system 
vendors themselves and also by airlines, especially parent carriers of CRSs. On the 
one hand, system vendors were required to deal in an even-handed manner with all 
carriers and travel agents, while, on the other, parent carriers of a CRS were required 
not to favour that system over the others.  

The Code of Conduct proved successful in preventing abuses of market power but it 
has unintended consequences as it is increasingly ill-adapted to the changing market 
conditions. First, many airlines have divested their CRS ownership. Three of the four 
CRSs  no  longer  have  any  airline  ownership,  while  three  airlines  hold  minority 
shareholdings  in  the  fourth  one.  Second,  thanks  to  the  development  of  alternative 
distribution  channels,  such  as  the  airlines'  Internet  websites  or  their  call  centres, 
consumers  have  nowadays  access  to  a  multiplicity  of  information  and  booking 
channels  for  air  transport  services.  About  40%  of  all  airline  tickets  in  the  EU  are 
booked via alternative channels and about 60% via travel agents and CRSs. 

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The Code's non-discrimination requirements stifle price competition and innovation, 
because they severely restrict the airlines'  and CRS providers'  freedom to negotiate 
booking fees and fare content offered via the CRSs. The ensuing lack of competition 
keeps  booking  fees  at  a  higher  level  than  necessary.  Consequently,  airlines  tend  to 
distribute an increasing share of their tickets via the alternative channels such as their 
own Internet websites, which are less costly and technically more flexible. 

Furthermore, as CRS markets in other parts of the world have been deregulated, it is 
necessary to ensure that airlines and CRS providers from within and outside the EU 
compete on a level-playing field. 

The  public  consultation  has  shown  that  stakeholders  are  in  favour  of  revising  the 
Code of Conduct to adapt it to the present day conditions, but to keep key provisions 
ensuring  the  provision  of  neutral  information  to  subscribers  and  safeguards  against 
potential  abuses  in  the  presence  of  close  links  between  air  carriers  and  CRS 
providers. 

•  Existing provisions in the area of the proposal 

Regulation 2299/89 as modified by regulations 3089/93 and 323/99 will be replaced 
by the present proposal. 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

The preparation of this proposal has been preceded by a public consultation in order 
to  gather  as  many  comments  and  suggestions  as  possible  from  the  individuals  and 
bodies concerned. This exercise respected the minimum standards for consultation of 
interested  parties  as  defined  in  the  Communication  from  the  Commission  of  11 
December 2002 (COM(2002)704 final). 

An  open  internet  consultation  was  carried  out  between  23  February  2007  and  27 
April  2007.  The  Commission  received  48  contributions,  breaking  down  into  the 
following groups: 

–  Air carriers and representative bodies: 18 

–  CRS providers and IT services providers: 5 

–  Consumer/ travellers and representative bodies: 9 

–  Travel agents and representative bodies: 10 

–  Rail transport sector: 1 

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–  Other: 5 

On  2  May  2007,  stakeholders  and  stakeholders'  organisations  were  invited  to  a 
meeting in Brussels in order to give a short overview of their contributions 

Summary of responses and how they have been taken into account 

The  consultation  revealed  that  only  few  stakeholders  –  among  the  airlines  and  the 
CRS  providers  –  favour  a  complete  abolishment  of  the  Code  of  Conduct.  Most 
stakeholders  prefer  to  keep  a  Code  of  Conduct,  but  they  favour  a  revision  of  the 
present Code in order to adapt it to the market developments by giving airlines and 
CRS providers more freedom to negotiate booking fees and fare content. 

Travel  agents  fear  greater  pricing  freedom  and  are  in  favour  of  amending  the 
Regulation to ensure access to airlines' full content at no additional cost. 

The consumers' organisations caution that a revision should be done very carefully in 
order  to  guarantee  the  provision  of  neutral  and  comprehensive  information  to 
consumers. 

Most of the stakeholders have expressed a clear preference to keep the present rules 
applicable  to  parent  carriers  of  CRS  providers,  i.e.  the  mandatory  participation  of 
parent  carriers  in  all  CRSs  (article  4a  of  the  Code)  and  the  prohibition  on  linking 
incentives or disincentives to the use of a particular CRS (article 8). 

A more detailed overview of stakeholders' views and the way they have been taken 
account  of  is  given  in  the  impact  assessment  report  that  accompanies  the  present 
proposal. 

results 

The 
http://ec.europa.eu/transport/air_portal/consultation/2007_04_27_en.htm. 

consultation 

Internet 

public 

the 

are 

of 

available 

on 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

In  this  impact  assessment,  two  options  for  revision  -  partial  and  full  deregulation  - 
were  compared  to  the  base  case  of  the  status  quo.  The  first  option  –  partial 
deregulation  -  has  been  further  sub-divided  in  three  sub-options  that  differ  with 
regard to the safeguard measures in case of close links between airlines and CRSs. 
All the options aim to increase the scope for competition in the CRS market: 

–  Option 0: status quo 

–  Option 1: partial deregulation 

– 

Option  1a:  partial  deregulation  with  control  unbundling  of  the  airlines 
and the CRSs; 

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– 

– 

Option  1b:  partial  deregulation  with  specific  provisions  for  parent 
carriers; 

Option  1c:  partial  deregulation  without  specific  provisions  for  parent 
carriers; 

–  Option 2: full deregulation (abolition of the Code of Conduct). 

The  status  quo  (option  0)  has  been  rejected  because  the  present  Regulation's 
restrictions  on  pricing  and  negotiating  freedom  are  having  increasing  negative 
effects, in particular in terms of high distribution costs. 

A  full  deregulation  (option  2)  has  been  rejected  at  the  present  state  of  the  market. 
Many  corporate  travellers  remain  highly  dependent  upon  the  single  distribution 
channel constituted of the travel agents and the CRSs. The same is true for travellers 
in  Member  States  with  low  Internet  penetration  rates:  less  than  half  of  the  EU 
population  has  access  to  the  Internet  -  which  is  the  most  important  alternative 
distribution channel. 

In  these  circumstances,  the  risks  of  competitive  abuse  are  higher  than  in  other 
economic sectors and the sole reliance on the general competition rules would not be 
sufficient,  especially  in  case  of  close  links  between  airlines  and  CRSs.  In  addition, 
certain  market  behaviours  of  the  CRSs  (e.g.  display  bias)  would  be  harmful  to 
consumers even if they were not the result of a competitive abuse. 

The impact assessment shows that option 1b offers the most favourable outcome in 
terms  of  increased  competition,  safeguards  against  competitive  abuse,  neutral, 
transparent and comprehensive information for consumers and the promotion of rail 
transport in CRS displays. 

The  Commission  carried  out  an  impact  assessment  listed  in  the  Work  Programme, 
whose report is accessible on 
http://ec.europa.eu/transport/air_portal/internal_market/networks_en.htm 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The present proposal would replace Regulation 2299/89 as modified by Regulations 
3089/93 and 323/99. 

•  Legal basis 

Articles 71 and 80(2) of the Treaty establishing the European Community. 

•  Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Community.  The 
subsidiarity principle therefore does not apply. 

•  Proportionality principle 

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The proposal complies with the proportionality principle for the following reason(s). 

Regulation  2299/89  confers  exclusive  competence  to  the  Commission.  Given  the 
international  character  of  the  CRS  operations  and  the  difficulty  to  monitor  these 
activities  on  a  national  level,  the  proposed  revision  and  simplification  of  the 
regulation maintains the competence at EU level. 

The proposed revision and simplification of the Regulation does not affect national, 
regional and local authorities, and reduces the already limited administrative burden 
on economic operators. 

•  Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s). 

A Regulation is the most adequate for the following reasons(s): 

–  The proposal concerns the revision of an existing Regulation; 

–  The  Regulation  concerns  an  economic  activity  with  an  international  character 

which would be difficult to regulate on a national level. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget 

5. 

ADDITIONAL INFORMATION 

•  Simplification 

The proposal provides for simplification of legislation. 

The revised Code of Conduct for CRS has been drafted and structured in an easy-to-
understand manner. Superfluous provisions from the Regulation 2299/89 have been 
removed, especially when they stand in the way of greater market efficiency. 

The  proposal  is  included  in  the  Commission's  rolling  programme  for  up-date  and 
simplification of the acquis communautaire and its Work and Legislative Programme 
under the reference 2002/TREN/29. 

•  Repeal of existing legislation 

The adoption of the proposal will lead to the repeal of existing legislation. 

•  Review/revision/sunset clause 

The proposal includes a review clause 

•  European Economic area 

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The  proposed  act  concerns  an  EEA  matter  and  should  therefore  extend  to  the 
European Economic Area. 

•  Detailed explanation of the proposal 

Partial de-regulation of the CRS market 

The  proposal  amends  the  Code  of  Conduct  for  CRS  in  order  to  adapt  it  to  today's 
market context - in particular the development of alternative distribution channels - 
and  to  reinforce  the  competition  between  the  CRS  providers.  By  giving  more 
flexibility  to  CRSs  and  airlines,  the  proposal  allows  CRSs  to  compete  more 
effectively  with  the  alternative  distribution  channels,  both  in  terms  of  prices  and 
services offered.  

The  simplification  of  the  Code  mainly  increases  the  negotiating  freedom  of  the 
market participants: airlines and CRS system vendors will be free to negotiate over 
the booking fees charged by the CRS and the fare content delivered by the airlines. 
The restrictions of the present Code of Conduct with regard to fare content, access to 
the  distribution  facilities  and  booking  fees  will  be  lifted  (with  the  exception  of  the 
safeguards mentioned below). 

Safeguards 

The  proposal  keeps  in  place  a  number  of  safeguards  against  potential  competitive 
abuses,  especially  in  the  case  of  close  links  between  CRSs  and  transport  services 
providers.  These  safeguards  reflect  the  view  expressed  by  many  stakeholders  and 
confirmed  by  the  impact  assessment,  that  in  the  present  market  context,  such  close 
links  still  represent  competitive  risks  that  require  specific  rules  besides  the  general 
competition rules. 

The simplified Code of Conduct maintains the following provisions to protect against 
competitive abuse and to ensure the supply of neutral information to consumers: 

•  Safeguards  to  protect  the  neutral  advice  of  travel  agents  (article  6),  such  as  for 
example  the  prohibition  for  system  vendors  to  attach  exclusivity  conditions  to 
their contracts with the travel agents. The proposal adds the prohibition for system 
vendors  to  identify  travel  agents  in  the  Marketing  Information  Data  Tapes 
(MIDT); this provision avoids that an airline could use the data to pressure travel 
agents to reduce their bookings on rival airlines. 

•  The obligation for system vendors to clearly separate the CRS systems from any 
airline's  internal  reservation  system  (article  4.2),  such  as  to  avoid  that  a  parent 
carrier would have a privileged access to the CRS system. 

•  The  prohibition  for  system  vendors  to  reserve  any  distribution  facilities  to  their 
parent  carriers  (article  4.1),  such  as  to  avoid  competitive  advantages  of  parent 
carriers over other participating carriers. 

•  The  obligation  for  system  vendors  to  provide  neutral  and  non-discriminatory 
displays (article 5) in order to ensure neutral information for consumers and avoid 
any screen bias in favour of specific airlines. 

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•  The obligation for system vendors to provide Marketing Information Data Tapes 

(MIDT) on a non-discriminatory basis (article 7). 

•  The  obligation  for  parent  carriers  to  provide  another  CRS  than  its  own  with  the 
same  information  on  its  transport  services  or  to  accept  bookings  from  another 
CRS  than  its  own  (article  10.1)  such  as  to  avoid  that  parent  carriers  hinder 
competition from other CRSs. 

•  The prohibition for parent carriers to link incentives or disincentives to the use of 
a  specific  CRS  (article  10.3)  such  as  to  avoid  systematic  preference  of  the  own 
CRS. 

•  Safeguards allowing the Commission to take measures to ensure equal treatment 

of EU airlines with regard to CRS systems in third countries (article 8). 

•  Provisions  for  the  protection  of  personal  data  that  particularise  and  complement 
those of Directive 95/46/EC of 24 October 1995 on the protection of individuals 
with regard to the processing of personal data and on the free movement of such 
data (article 11 ). 

Rail services 

The  Code  of  Conduct  also  applies  to  rail  services  that  are  integrated  into  an  air 
transport CRS (it does not apply to "rail only" systems). It ensures that rail services 
are  given  a  non-discriminatory  treatment  in  the  CRS.  However,  today's  provisions 
with  regard  to  non-discriminatory  pricing  lead  to  a  de  facto  discrimination  of  rail 
services as they are charged the same booking fees although the average value of the 
tickets is smaller. By establishing pricing freedom with  regard  to booking fees, the 
proposal allows rail companies to negotiate booking fees which are better adapted to 
the  value  of  their  tickets  and  hence  creates  an  incentive  for  rail  companies  to  offer 
their services on the CRS systems, too. The provisions with regard to parent carriers 
and display neutrality continue to apply to rail services, too. 

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2007/0243 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on a Code of Conduct for computerised reservation systems 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
71 and 80(2) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Economic and Social Committee1, 

Having regard to the opinion of the Committee of the Regions2, 

Having regard to the opinion of the European Data Protection Supervisor, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty3, 

Whereas: 

(1) 

(2) 

(3) 

1 
2 
3 
4 

Regulation (EEC) No 2299/89of 24 July 1989 on a code of conduct for computerised 
reservation  systems4  has  made  a  major  contribution  to  ensuring  fair  and  unbiased 
conditions  for  air  carriers  in  computerised  reservation  systems  (hereinafter  "CRS"), 
thereby protecting the interests of consumers. 

An  important  part  of  airline  reservations  are  still  made  through  computerised 
reservation systems. 

Technological  and  market  developments  allow  for  a  substantial  simplification  of  the 
legislative  framework  by  giving  more  flexibility  to  CRS  vendors  and  air  carriers  to 
negotiate  booking  fees  and  fare  content.  This  will  allow  them  to  adapt  in  a  flexible 
way to the needs and requests of travel agents and consumers and to distribute more 
efficiently their transport products. 

OJ C …. 
OJ C …. 
OJ C …. 
OJ  L  220,  29.7.1989,  p.1  Regulation  as  last  amended  by  Regulation  (EEC)  No  3089/93  (OJ  L  278 
11.11.1993, p.1) and Regulation (EC) No 323/1999 (OJ L 40, 13.2.1999, p.1) 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

In  the  present  market  context  it  remains  necessary  nonetheless  to  maintain  certain 
provisions  on  CRS  systems,  insofar  as  they  contain  transport  products,  in  order  to 
prevent  competitive  abuses  and  to  ensure  the  supply  of  neutral  information  to 
consumers. 

The refusal by parent carriers to provide the same information on schedules, fares and 
availability  to  systems  other  than  their  own  and  to  accept  bookings  made  by  those 
systems can seriously distort competition between computerised reservation systems. 

System  vendors  should  clearly  separate  the  CRS  systems  from  any  airline's  internal 
reservation  system  and  should  refrain  from  reserving  distribution  facilities  to  their 
parent carriers, in order to avoid that a parent carrier could have a privileged access to 
the CRS system. 

In  order  to  protect  consumers'  interests,  it  is  necessary  to  present  an  unbiased  initial 
display to users of a CRS and to ensure that information on all participating carriers is 
equally accessible in order not to favour one participating carrier over another. 

System vendors should ensure that CRS marketing data is available to all participating 
carriers without discrimination, and transport providers should not be able to use such 
data in order to unduly influence the choice of the travel agent. 

The provision of information on rail and rail-air services on the CRS displays should 
be facilitated. 

(10)  Air carriers from the Community and from third countries should be given equivalent 

treatment with regard to CRS services. 

(11) 

In order to ensure the correct application of this Regulation, the Commission should 
have  appropriate  enforcement  powers,  including  the  possibility  to  investigate 
infringements, whether on its own initiative or on the basis of a complaint, to order the 
undertakings concerned to bring such infringements to an end and to impose fines. 

(12)  This  Regulation  is  without  prejudice  to  the  application  of  Articles  81  and  82  of  the 

Treaty. 

(13)  The  protection  of  individuals  with  regard  to  the  processing  of  personal  data  is 
governed by Directive 95/46/EC of 24 October 1995 on the protection of individuals 
with regard to the processing of personal data and on the free movement of such data5. 
The  provisions  of  this  Regulation  particularise  and  complement  Directive  95/46/EC 
with regard to the activities of a CRS. 

(14)  Regulation (EEC) No 2299/89 should be repealed, 

5 

OJ L 281, 23.11.1995, p.31 

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HAVE ADOPTED THIS REGULATION: 

Section 1 

Introductory provisions 

Article 1 

Subject matter and scope 

This  Regulation  shall  apply  to  any  computerised  reservation  system  (hereinafter  'CRS'), 
insofar as it contains air-transport products, when offered for use or used in the territory of the 
Community. 

This Regulation shall also apply to rail-transport products, which are incorporated alongside 
air-transport products into the principal display of a CRS. 

Article 2 

Definitions 

For the purposes of this Regulation, the following definitions shall apply: 

(a) 

(b) 

'transport  product'  means  the  carriage  of  a  passenger  between  two  airports  or  rail 
stations; 

'scheduled  air  service'  means  a  series  of  flights  possessing  all  the  following 
characteristics: 

(i) 

on each flight seats and/or capacity to transport cargo and/or mail are available 
for  individual  purchase  by  the  public  (either  directly  from  the  air  carrier  or 
from its authorised agents); 

(ii) 

it  is  operated  so  as  to  serve  traffic  between  the  same  two  or  more  airports, 
either: 

- 

- 

according to a published timetable; or 

with flights so regular or frequent that they constitute a recognisably systematic 
series. 

(c) 

'fares'  means  the  prices  to  be  paid  by  passengers  to  air  carriers,  rail-transport 
operators, their agents or other ticket sellers for the carriage of those passengers on 
transport  services  and  any  conditions  under  which  those  prices  apply,  including 
remuneration and conditions offered to agency and other auxiliary services; 

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(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

(l) 

'computerised  reservation  system'  means  a  computerised  system  containing 
information  about,  inter  alia,  schedules,  availability,  fares,  and  related  services,  of 
more than one air carrier, with or without facilities through which reservations may 
be made, or tickets may be issued, to the extent that some or all of these services are 
made available to subscribers; 

'distribution facilities' mean facilities provided by a system vendor for the provision 
of information about air carriers' and rail-transport operators' schedules, availability, 
fares and related services and for making reservations and/or issuing tickets, and for 
any other related services; 

'system vendor' means any entity and its affiliates which is or are responsible for the 
operation or marketing of a CRS; 

'parent  carrier'  means  any  air  carrier  or  rail-transport  operator  which  directly  or 
indirectly, alone or jointly with others, owns or effectively controls a system vendor, 
as  well  as  any  air  carrier  or  rail-transport  operator  which  it  owns  or  effectively 
controls; 

'effective  control'  means  a  relationship  constituted  by  rights,  contracts  or  any  other 
means which, either separately or jointly and having regard to the considerations of 
fact  or  law  involved,  confer  the  possibility  of  directly  or  indirectly  exercising  a 
decisive influence on an undertaking, in particular by: 

(i) 

the right to use all or part of the assets of an undertaking; 

(ii) 

rights or contracts which confer a decisive influence on the composition, voting 
or  decisions  of  the  organs of  an  undertaking  or  otherwise  confer  a  decisive 
influence on the running of the business of the undertaking; 

'participating  carrier'  means  an  air  carrier  or  rail-transport  operator  which  has  an 
agreement with a system vendor for the distribution of transport products through a 
CRS. 

'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. A "financial arrangement" means that a specific payment is made 
for the services of the system vendor or that a transport product is purchased; 

'principal  display'  means  a  comprehensive  neutral  display  of  data  concerning 
transport services between city-pairs, within a specified time period; 

'ticket'  means a  valid  document  giving  entitlement  to  transport,  or  an  equivalent  in 
paperless  form,  issued  or  authorised  by  the  air  carrier,  rail-transport  operator  or  an 
authorised agent. 

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Section 2 

Rules of conduct for system vendors 

Article 3 

Relations with transport providers 

1. A system vendor shall not: 

(a) 

(b) 

attach unreasonable conditions to any contract with a participating carrier or require 
the  acceptance  of  supplementary  conditions  which,  by  their  nature  or  according  to 
commercial usage, have no connection with participation in its CRS; 

make it a condition of participation in its CRS that a participating carrier may not at 
the same time be a participant in another system. 

2. A system vendor shall load and process data provided by participating carriers with equal 
care  and  timeliness,  subject  only  to  the  constraints  of  the  loading  method  selected  by 
individual participating carriers. 

Article 4 

Distribution facilities 

1.  A  system  vendor  shall  not  reserve  any  specific  loading  and/or  processing  procedure,  any 
other  distribution  facility,  or  any  improvements  to  these,  for  one  or  more  of  its  parent 
carrier(s). 

2. A system vendor shall ensure that its distribution facilities are separated, at least by means 
of  software  and  in  a  clear  and  verifiable  manner,  from  any  carrier's  private  inventory  and 
management and marketing facilities.  

Article 5 

Displays 

1.  A  system  vendor  shall  provide  a  principal  display  or  displays  for  each  individual 
transaction  through  its  CRS  and  shall  include  therein  the  data  provided  by  participating 
carriers in a neutral and comprehensive manner and without discrimination or bias. Criteria to 
be used for ranking shall not be based on any factor directly or indirectly relating to carrier 
identity  and  shall  be  applied  on  a  non-discriminatory  basis  to  all  participating  carriers.  The 
principal display(s) shall respect the rules set out in Annex 1. 

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2. In the case of information provided by a CRS,  a subscriber shall use a neutral display in 
accordance with paragraph 1 unless another display is required to meet a preference indicated 
by a consumer. 

3. This Article shall not apply to a CRS used by an air carrier, or rail-transport operator, or a 
group  of  air  carriers,  or  of  rail-transport  operators,  in  its  or  their  own  office  or  offices  and 
sales counters clearly identified as such. 

Article 6 

Relations with subscribers 

1. A system vendor shall not attach unreasonable conditions to a contract with a subscriber, 
such  as  preventing  a  subscriber  from  subscribing  to  or  using  any  other  system  or  systems, 
requiring  the  acceptance  of  supplementary  conditions  which  have  no  connection  with 
subscription in its CRS, or imposing an obligation to accept an offer of technical equipment or 
software. 

2.  Where  a  subscriber  is  an  autonomous  enterprise  that  employs  fewer  than  50  persons  and 
whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million, it 
may  terminate  its  contract  with  a  system  vendor  by  giving  notice,  which  need  not  exceed 
three months, to expire not before the end of the first year. In such a case, a system vendor 
shall not be entitled to recover more than the costs directly related to the termination of the 
contract. 

Article 7 

Marketing Information Data Tapes (MIDT) 

Any marketing, booking and sales data may be made available by system vendors provided 
that: 

(a) 

(b) 

such data are offered with equal timeliness and on a non-discriminatory basis to all 
participating carriers, including parent carriers. Data may and, on request, shall cover 
all participating carriers and/or subscribers; 

when  such  data  result  from  the  use  of  the  distribution  facilities  of  a  CRS  by  a 
subscriber  established  in  the  territory  of  the  European  Union,  it  shall  include  no 
identification either directly nor indirectly of that subscriber. 

Article 8 

Equivalent treatment in third countries 

Without prejudice to international agreements to which the Community or the Member States 
are parties, where the treatment given to Community air carriers by a system vendor operating 
in  a  third  country  is  not  equivalent  to  the  treatment  given  to  the  third  country  participating 

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carriers with regard to any matter contained in this Regulation, the Commission may require 
all system vendors operating in the Community to treat air carriers of that third country in a 
manner  that  is  equivalent  to  the  treatment  given  to  Community  air  carriers  in  that  third 
country. 

Section 3 

Rules of conduct for transport providers 

Article 9 

Data provided by participating carriers 

Participating  carriers,  and  intermediaries  handling  the  data,  shall  ensure  that  the  data  which 
they  submit  to  a  CRS  are  accurate  and  that  they  allow  the  system  vendor  to  respect  the 
provisions of Annex I. 

Article 10 

Specific rules for parent carriers 

1. A parent carrier may not discriminate against a competing CRS by refusing to provide the 
latter,  on  request  and  with  equal  timeliness,  with  the  same  data  on  schedules,  fares  and 
availability relating to its own transport products as that which it provides to its own CRS or 
to distribute its transport products through another CRS, or by refusing to accept or to confirm 
with  equal  timeliness  a  reservation  made  through  a  competing  CRS  for  any  of  its  transport 
products  which  are  distributed  through  its  own  CRS.  The  parent  carrier  shall  be  obliged  to 
accept  and  to  confirm  only  those  bookings  which  are  in  conformity  with  its  fares  and 
conditions. 

2.  The  parent  carrier  shall  not  be  obliged  to  accept  any  costs  in  this  connection  except  for 
reproduction of the data to be provided and for accepted bookings. The booking fee payable 
to a CRS for an accepted booking made in accordance with paragraph 1 shall not exceed the 
fee  charged  by  the  same  CRS  or  by  its  own  CRS  to  other  participating  carriers  for  an 
equivalent transaction. 

3. A parent carrier shall neither directly nor indirectly link the use of any specific CRS by a 
subscriber with the receipt of any commission or other incentive or disincentive for the sale of 
its transport products. 

4. A parent carrier shall neither directly nor indirectly require use of any specific CRS by a 
subscriber  for  sale  or  issue  of  tickets  for  any  transport  products  provided  either  directly  or 
indirectly by itself. 

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Section 4 

Protection of personal data  

Article 11 

1. Personal data shall be processed in the course of the activities of a CRS exclusively for the 
purpose  of  making  reservations  or  issuing  tickets  for  transport  products.  With  regard  to  the 
processing  of  such  data,  a  CRS  shall  be  considered  as  a  data  controller  in  accordance  with 
Article 2(d) of Directive 95/46/EC. 

2.  Personal  data  shall  only  be  processed  insofar  as  processing  is  necessary  for  the 
performance  of  a  contract  to  which  the  data  subject  is  party  or  in  order  to  take  steps  at  the 
request of the data subject prior to entering into a contract. 

3.  Where  special  categories  of  data  referred  to  under  Article  8  of  Directive  95/46/EC  are 
involved,  such  data  shall  only  be  processed  where  the  data  subject  has  given  his  explicit 
consent to the processing of those data. 

4.  Information  under  the  control  of  the  system  vendor  concerning  identifiable  individual 
bookings  shall  be  stored  off-line  within  seventy-two  hours  of  the  completion  of  the  last 
element in the individual booking and destroyed within three years. Access to such data shall 
be allowed only for billing-dispute reasons. 

5. Marketing, booking and sales data made available by a CRS shall include no identification, 
either  directly  or  indirectly,  of  natural  persons  or,  where  applicable,  of  the  organisations  or 
companies on whose behalf they are acting. 

6. A subscriber shall inform the consumer of the name and address of the system vendor, the 
purposes  of  the  processing,  the  duration  of  the  retention  of  personal  data  and  the  means 
available to the data subject of exercising his access rights. 

7.  A  data  subject  shall  be  entitled  to  have  access  free  of  charge  to  data  relating  to  him 
regardless of whether the data is stored by the CRS or by the subscriber. 

8. The rights recognized in this article are complementary to and shall exist in addition to the 
data subject rights laid down  by Directive  95/46/EC and by the national provisions adopted 
pursuant thereto. 

9. The provisions of this Regulation particularise and complement Directive 95/46/EC for the 
purposes mentioned in Article 1. Save as otherwise provided the definitions in that Directive 
shall apply. Where the specific provisions with regard to the processing of personal data in the 
context of the activities of a CRS laid down in this Article do not apply, this Regulation shall 
be  without  prejudice  to  the  provisions  of  the  said  Directive  and  the  national  provisions 
adopted by the Member States pursuant thereto. 

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Section 5 

Infringements and penalties 

Article 12 

Infringements 

Where the Commission, acting on a complaint or on its own initiative, finds that there is an 
infringement of this Regulation it may by decision require the undertakings or associations of 
undertakings concerned to bring such infringement to an end. 

Article 13 

Powers of investigation 

In  order  to  carry  out  the  duties  assigned  to  it  by  this  Regulation  the  Commission  may,  by 
simple request or decision, require undertakings or associations of undertakings to provide all 
necessary information.  

Article 14 

Fines 

1. The Commission may by decision impose on undertakings and associations of undertakings 
fines  not  exceeding  10  per  cent  of  the  total  turnover  in  the  preceding  business  year  where, 
intentionally or negligently, they infringe this Regulation. 

2. The Commission may by decision impose on undertakings and associations of undertakings 
fines  not  exceeding  1  %  of  the  total  turnover  in  the  preceding  business  year  where, 
intentionally or negligently, they supply incorrect or incomplete information or do not supply 
information within the required time limit in response to a request made by a decision adopted 
pursuant to Article 13. 

3. In fixing the amount of the fines regard shall be had both to the gravity and to the duration 
of the infringement. 

4. Fines shall not be of criminal nature. 

5.  The  Court  of  Justice  shall  have  unlimited  jurisdiction  to  review  decisions  whereby  the 
Commission has imposed a fine. It may cancel, reduce or increase the fine. 

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Article 15 

Procedures 

1. Before taking decisions pursuant to Articles 12 and 14, the Commission shall issue to the 
undertakings  or  associations  of  undertakings  concerned  a  statement  of  objections  and  give 
them an opportunity to submit their views in writing and, if they so request, at an oral hearing. 

2.  The  Commission  shall  not  disclose  information  of  the  kind  covered  by  the  obligation  of 
professional secrecy which it has obtained pursuant to this Regulation. 

Any person who submits information to the Commission under this Regulation shall clearly 
identify  any  material  which  it  considers  to  be  confidential,  giving  reasons,  and  provide  a 
separate non-confidential version by the date set by the Commission.  

3. Where the Commission considers that on the basis of the information in its possession there 
are  insufficient  grounds  for  acting  on  a  complaint,  it  shall  inform  the  complainants  of  its 
reasons  and  set  a  time  limit  within  which  the  complainant  may  make  known  its  views  in 
writing. 

If the complainant makes known its views within the time-limit set by the Commission and 
the written submissions made by the complainant do not lead to a different assessment of the 
complaint, the Commission shall reject the complaint by decision. If the complainant fails to 
make  known  its  views  within  the  time-limit  set  by  the  Commission,  the  complaint  shall  be 
deemed to have been withdrawn. 

Where the Commission issues a statement of objections, it shall provide the complainant with 
a copy of the non-confidential version and set a time limit within which the complainant may 
make known its views in writing. 

4. If so requested, the Commission shall grant access to the file to the parties to whom it has 
addressed a statement of objection and to the complainant. Access shall be granted after the 
notification of the statement of objections. The right of access to the file shall not extend to 
business secrets, other confidential information and internal documents of the Commission. 

5. If the Commission considers it necessary it may hear other natural or legal persons. 

Section 6 

Final provisions 

Article 16 

Repeal 

1. Regulation (EEC) No 2299/89 is repealed. 

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2. References to the repealed Regulation shall be construed as references to this Regulation 
and shall be read in accordance with the correlation table in Annex II. 

Article 17 

Review 

Within five years of the entry into force of this Regulation, the Commission shall draw up a 
report on the application of this Regulation which shall assess the need to maintain, amend or 
abolish the present Regulation. 

Article 18 

Entry into force 

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

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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ANNEX I 

Rules applicable to principal displays 

1. Where fares are shown in the principal display, and/or where a ranking based on fares is 
chosen, fares shall be inclusive of all applicable and unavoidable taxes, charges and fees to be 
paid to the transport provider. 

2.  No  discrimination  on  the  basis  of  airports  or  rail  stations  serving  the  same  city  shall  be 
exercised in constructing and selecting transport products for a given city-pair for inclusion in 
a principal display. 

3.  Flights  other  than  scheduled  air  services  must  be  clearly  identified.  A  consumer  shall  be 
entitled to have, on request, a principal display limited to scheduled or non-scheduled services 
only. 

4. Flights involving stops en route must be clearly identified. 

5.  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  must  be  clearly  identified.  That 
requirement will apply in all cases, except for short-term ad hoc arrangements. 

6.  Information  on  bundled  products  -  i.e.  prearranged  combinations  of  transport  with  other 
services not ancillary to transport and offered at an inclusive price - shall not be featured in 
the principal display. 

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ANNEX II 

CORRELATION TABLE 

Regulation 2299/89 

This Regulation 

Article 1 

Article 2 

Article 3(1) and (2) 

Article 3(3) 

Article 3(4) 

Article 3a 

Article 4(1) 

Article 4(2) 

Article 4(3) 

Article 4a (1) and (2) 

Article 4a(3) 

Article 4a(4) 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 9a 

Article 10 

Article 11 

Article 12 

Article 13 

Article 14 

Article 1 

Article 2 

- 

Article 3(1) 

Article 4(1) 

Article 10(1) and (2) 

Article 9 

- 

Article 3(2) 

Article 4(1) 

Article 4(2) 

- 

Article 5 

Articles 7 and 11 

Article 8 

Article 10(3) and (4) 

Article 6 

Articles 5(2) and 11 

- 

Article 12 

Article 13 

Article 13 

Article 15(2) 

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Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 20 

Article 21 

Article 21a 

Article 21b 

Article 22 

Article 23 

Annex I 

Article 13 

Article 14 

- 

- 

Article 15(1) and (5) 

- 

- 

- 

- 

Article 11 

Article 17 

Annex I 

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