British Airways plc v Commission

British Airways plc v Commission
British Airways plc v Commission
Court	Court of Justice of the EU
Citation	[2007] ECR I-2331, C-95/04

Last updated November 06, 2024

British Airways plc v Commission (2007) C-95/04 is a leading EU competition law case, concerning monopoly and abuse of a dominant position.^[1]

Facts

British Airways offered travel agents extra commissions if they promoted BA tickets. The Commission said that this was discriminatory, designed to induce loyalty and served to exclude competing airlines.

Judgment

The Court of Justice of the EU held that BA had abused its dominant position because bonuses were individual for each travel agent, based on tickets sold and not those sold over a given level. So selling extra BA tickets meant a large increase in bonus payments. It was worth selling more BA tickets than other airline tickets. The key part of the judgment was as follows:^[2]

68. [It is necessary to show the effect of...] making market entry very difficult or impossible for competitors of the undertaking in a dominant position and, secondly, of making it more difficult or impossible for its co-contractors to choose between various sources of supply or commercial partners.
69. ... an undertaking is at liberty to demonstrate that its bonus system producing an exclusionary effect is economically justified.
71. Exclusion can come from ‘goal-related discounts or bonuses, that is to say those the granting of which is linked to the attainment of sales objectives defined individually…
73. [Induced loyalty can be very strong if] a discount or bonus does not relate solely to the growth in turnover in relation to purchases or sales of products of that undertaking made by those co-contractors during the period under consideration, but extends also to the whole of the turnover relating to those purchases or sales. In that way, relatively modest variations – whether upwards or downwards – in the turnover figures relating to the products of the dominant undertaking have disproportionate effects on co-contractors…
...
75. By reason of its significantly higher market share, the undertaking in a dominant position generally constitutes an unavoidable business partner in the market.
86. If the exclusionary effect of that system bears no relation to advantages for the market and consumers, or if it goes beyond what is necessary in order to attain those advantages, that system must be regarded as an abuse.
...
105. It should be noted first that, as explained in paragraphs 57 and 58 of this judgment, discounts or bonuses granted by an undertaking in a dominant position may be contrary to Article 82 EC even where they do not correspond to any of the examples mentioned in the second paragraph of that article.
106. Moreover, as the Court has already held in paragraph 26 of its judgment in Europemballage and Continental Can, Article 82 EC is aimed not only at practices which may cause prejudice to consumers directly, but also at those which are detrimental to them through their impact on an effective competition structure, such as is mentioned in Article 3(1)(g) EC.^[2]

Notes

↑ A Jones, B Suffrin and N Dunne, EU Competition law: Text, Cases & Materials (8th edn 2023) ch 7
1 2 "British Airways plc v Commission of the European Communities". EUR-Lex. 15 March 2007. Retrieved 6 November 2024. This article incorporates textfrom this source, which is available under the CC BY 4.0 license.

Related Research Articles

In the European Union, competition law promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not create cartels and monopolies that would damage the interests of society.

Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. For a period of time, the prices are set unrealistically low to ensure competitors are unable to effectively compete with the dominant firm without making substantial loss. The aim is to force existing or potential competitors within the industry to abandon the market so that the dominant firm may establish a stronger market position and create further barriers to entry. Once competition has been driven from the market, consumers are forced into a monopolistic market where the dominant firm can safely increase prices to recoup its losses.

Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust law, anti-monopoly law, and trade practices law; the act of pushing for antitrust measures or attacking monopolistic companies is commonly known as trust busting.

Microsoft Corp. v. Commission is a case brought by the European Commission of the European Union (EU) against Microsoft for abuse of its dominant position in the market. It started as a complaint from Sun Microsystems over Microsoft's licensing practices in 1993, and eventually resulted in the EU ordering Microsoft to divulge certain information about its server products and release a version of Microsoft Windows without Windows Media Player. The European Commission especially focused on the interoperability issue.

Market dominance is the control of a economic market by a firm. A dominant firm possesses the power to affect competition and influence market price. A firms' dominance is a measure of the power of a brand, product, service, or firm, relative to competitive offerings, whereby a dominant firm can behave independent of their competitors or consumers, and without concern for resource allocation. Dominant positioning is both a legal concept and an economic concept and the distinction between the two is important when determining whether a firm's market position is dominant.

European Union merger law is a part of the law of the European Union. It is charged with regulating mergers between two or more entities in a corporate structure. This institution has jurisdiction over concentrations that might or might not impede competition. Although mergers must comply with policies and regulations set by the commission; certain mergers are exempt if they promote consumer welfare. Mergers that fail to comply with the common market may be blocked. It is part of competition law and is designed to ensure that firms do not acquire such a degree of market power on the free market so as to harm the interests of consumers, the economy and society as a whole. Specifically, the level of control may lead to higher prices, less innovation and production.

Article 102 of the Treaty on the Functioning of the European Union (TFEU) is aimed at preventing businesses in an industry from abusing their positions by colluding to fix prices or taking action to prevent new businesses from gaining a foothold in the industry. Its core role is the regulation of monopolies, which restrict competition in private industry and produce worse outcomes for consumers and society. It is the second key provision, after Article 101, in European Union (EU) competition law.

Höfner and Elser v Macrotron GmbH (1991) C-41/90 was a significant EU competition law case, concerning the definition of an "undertaking" and abuse of a dominant position.

The Temporary Agency Work Directive2008/104/EC is an EU Directive agreed in November 2008 which seeks to guarantee those working through employment agencies equal pay and conditions with employees in the same business who do the same work. It is the third piece of legislation in the European Union's employment law package to protect atypical working. Though it was proposed in 2002, the British, German, Danish and Irish governments blocked its enactment until 2008.

Commission v Anic Partecipazioni SpA (1999) C-49/92 is an EU competition law case, concerning the requirements for finding that there has been a cartel, or unlawful collusion, within TFEU article 101.

T-Mobile Netherlands BV v Raad van bestuur van de Nederlandse Mededingingsautoriteit (2009) C-8/08 is an EU competition law case, concerning the requirements for finding that firms have colluded with the "object" of harming competition.

O2 (Germany) GmbH & Co OHG v Commission (2006) T-328/03 is an EU competition law case, concerning the requirements for a restriction of competition to be found under TFEU article 101.

Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie (1999) C-67/96 is an EU law case, concerning the boundary between European labour law and European competition law in the European Union.

Deutsche Telekom AG v Commission (2010) C-280/08 is a European competition law case relevant for UK enterprise law, concerning telecommunications.

Telefónica SA v Commission (2014) C-295/12 is a European competition law case relevant for UK enterprise law, concerning telecommunications.

Mergers in United Kingdom law is a theory-based regulation that helps forecast and avoid abuse, while indirectly maintaining a competitive framework within the market. A true merger is one in which two separate entities merge into an entirely new entity. In Law the term ‘merger’ has a much broader application, for example where A acquires all, or a majority of, the shares in B, and is able to control the affairs of B as such.

AKZO Chemie BV v Commission (1991) C-62/86 is an EU competition law case, concerning monopoly and abuse of a dominant position through predatory pricing.

AstraZeneca AB and AstraZeneca plc v Commission (2012) C-457/10 P is an EU competition law case, concerning monopoly and abuse of a dominant position.

Google LLC v Commission (2022) T-604/18 is an EU competition law case, concerning monopoly and abuse of a dominant position for tying.

Commercial Solvents Corporation v Commission (1974) Cases 6/73 and 7/73 is an EU competition law case, concerning monopoly and abuse of a dominant position.

References

A Jones, B Suffrin and N Dunne, EU Competition law: Text, Cases & Materials (8th edn 2023) ch 7

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.

[1] A Jones, B Suffrin and N Dunne, EU Competition law: Text, Cases & Materials (8th edn 2023) ch 7

[case-2] 1 2 "British Airways plc v Commission of the European Communities". EUR-Lex. 15 March 2007. Retrieved 6 November 2024. This article incorporates textfrom this source, which is available under the CC BY 4.0 license.

[1]

[2]