CELEX: 51990PC0167
Language: en
Date: 1990-06-11
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING REGULATION ( EEC ) NO 3975/87 LAYING DOWN THE PROCEDURE FOR THE APPLICATION OF THE RULES ON COMPETITION TO UNDERTAKINGS IN THE AIR TRANSPORT SECTOR

COMMISSION OF THE EUROPEAN COMMUNITIES
                                            C0MC90) 167 final
                                            Brussels, 11 June 1990
                         Proposal for a
                    COUNCIL REGULATION (EEC)
             amending Regulation (EEC) No 3975/87
        Laying down the procedure for the application
         of the rules on competition to undertakings
                  in the air transport sector
                  (presented by the Commission)
 ---pagebreak---                                      - 2 -
                                EXPLANATORY MEMORAMMfl*
        To the draft regulation providing for temporary relief against
             anticompetitive practices in the air transport sector.
  The Commission's current proposals on further liberalisation              of air
                 ("i )
  transport            include rules designed to permit air carriers to develop
  and implement their own commercial policies.           While this process on the
  whole will contribute to a more dynamic industry in the interest of the
  air transport user,          there may be cases in which air carrier:; use the
   opportunity created by the relaxation of controls to adopt strategies
  designed to eliminate competitors by other means than eon-petition on
   the merits.
   During     discussions     within   the  Council  it   became clear  that  such
   anticompetitive practices are of serious concern to the industry and to
   Member States.          As a result the Council called on the Commission to
   strengthen its proposals by defining rules to prevent anti-rompitî+-iv^
                                           (2)
   ".'ehaviour and abusive practices
   The Commission at present has considerable fact-finding and enforcement
   powers in the air transport sector            , but its present procedures may
   not always be sufficient         to   enable it to act with the necessary speed
   against practices which threaten to eliminate a competitor.          Experience
   !)..-• COM <!.'.?) J73 finol of 0 September 1987.
  'Conclusions of the Transport Council of A and 5 December 1999,          Council
   Working Document AER/89/29.
35
   Council Regulation 3975/87, OJ N° L 374 of 31 December 1987.
 ---pagebreak---                                              - .3 -
     -f the air transport sector shows,             however.   that in the absence of
     seditious           action    such    anticompetitive     practices      may   ,MI;,(,
      irreversible 'amage to the competitive structure of the industry.
*'.. Consequently       it   is  proposed   to   provide   for   some   acceleration    of
     procedures      enabling the Commission to give temporary           relief against
     anticompetitive practices in the air transport sector.               The provisions
     -re similar to the rules laid down in the Court's judgement                  in Case
    792/79, Camera Care 1980 ECR 119.
!i. The anticompetitive practices concerned are actions by one or several
    air    carriers      which  have   the  object   or   effect   of  threatening    the
    viability of an air service or of threatening the existence of an                 air
    carrier.         The following actions could be considered as examples of
    anticompetitive practices :
     • providing :-o much capacity or such high frequencies on a route fhat
       "tli*3i- fiii-i up-!, find U   difficult to make sales of servi ••«» . ••!• the
       route;
     - charging       fares   appreciably    below   the   air   carrier's     own  fully
        allocated relevant costs;
     - granting       benefits   to  travel   agents   which   make   it   difficult   for
        competing air carriers to make sales, e.g. override commissions;
        granting benefits to air transport users which artificially maintain
        their loyalty to a specific airline,          e.g. frequent flier programmes.
     Whether such actions are judged to be anticompetitive in a particular
      case would depend on the particular circumstances of that case.
      Because of the severe time constraints the draft regulation modifies
      i-eguiation 3970/07 to enable the Commission to take interim measures to
      prevent or terminate anticompetitive practices more rapidly by omitting
      consultation of the Advisory Committee.            However,    the Commission will
      endeavour to maintain a close and constant liaison with the competent
 ---pagebreak--- j'j'horities jf the Member States concerned.                      In any event, "he Advisory
'ornmitte* will be consulted before a decision is renewed,                        and l^forc* c
' :nal   decision is taken.
 •,t.;ip.    [!"<•••.•••.! n ' f . wiil n o t b«- f-^l:<-*T'i wit||.,nt  fir'-.t •.•!..•!.! m--. ':«•
 • d^rt,:,!•;ii^'• concerned to comment in writing.                   and will !••• 'inni-'- ':•-
-'na length 01 time appropriate to the case (at most 6 months.
 ---pagebreak---                                          - 5 -
                                    Proposal for a
                               COUNCIL REGULATION (EEC)
                         amending Regulation (EEC) No 3975/87
                   laying down the procedure for the application
                    of the rules on competition to undertakings
                       ,     in the air transport sector
THE COUNCIL OF THE EUROPEAN COHMUNITIES,
Having   regard to the Treaty establishing the European Economic Community,
and in   particular Article 87 thereof,
Having   regard to the proposal from the Commission (1),
Having   regard to the opinion of the European Parliament (2),
Having   regard to the opinion of the Economic and Social Committee (3),
Whereas Council Regulation          (4)
provides for further liberalisation of air transport within the Community;
Whereas, while the relaxation of controls will enable carriers to compete
on their merits and thus contribute to a more dynamic industry in the
interest of the air transport user, the Commission should be able to take
prompt action in cases where air carriers engage in practices which are
contrary to the competition rules and which may threaten the viability of
services operated by a competitor or even the existence of a competitor,
and thus cause irreversible damage to the competitive structure;
Whereas it is appropriate to provide for a specific procedure according to
which the Commission may apply the competition rules expeditiously in
 cases where there is an urgent need to prevent or act against such
 anticompetitive practices;
 Whereas this procedure should provide the undertakings concerned with the
 opportunity to comment in writing on the matters to which objection is
 taken;
 Whereas it is therefore necessary to amend Council Regulation (EEC)
 No' 3975/87 (5);
 HAS ADOPTED THIS REGULATION:
 (1)
 (2)
  (3)
  (4)
  C5> O J H o l 3 ? V 31.12.1987, p . 1
 ---pagebreak---                                        - 6 -
                                    ARTICLE 1
Regulation (EEC) No 3975/87 is hereby amended as follows :
1) The following Article 4a      is inserted :
                                   "ARTICLE 4a
                 Temporary relief against anticompetitive practices
    1. Without prejudice to Article 4(1), where the Commission has reasons
        to believe that certain practices are contrary to Articles 85 or 86
       of the Treaty and have the object or effect of threatening the
       viability of an air service or of threatening the existence of an
       air carrier, it may by decision take interim measures to ensure that
        these practices are not implemented or cease to be implemented and
        to give such instructions as are necessary to prevent the occurrence
       of these practices until a decision under Article 4(1) is taken.
     2. A decision taken pursuant to paragraph     1 shall apply for a period
         not exceeding six months.   Article 8(3) to (6) shall not apply.
         The Commission   may renew   the initial decision,   with or without
         modification.    In such case. Article 8(3) to (6) shall apply."
 2)     The following is added to Article 13(1):
     "(e) to comply with any measure imposed by decision under Article 4 a."
 3)      In Article 16(1) "4a," is inserted after "4,".
 ---pagebreak---                                      7 -
                                  ARTICLE 2
This    Regulation  shall   enter into   force  on   the   day   following
that of its publication in the Official Journal of the European Communities,
Tli i r; Regulation   ".hall  be  binding   in   ils   ont i rot y  and  dir.M.ily
applicable in all Member States.
Done at Brussels,                            For the Council
 ---pagebreak---  ---pagebreak---                                                                                   ISSN 0254-1475
                                                                  COM(90) 167 final
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