CFI Upholds BA Antitrust Ruling

by Robin Pilgrim, LawAndTax-News.com, London

18 December 2003

In a ruling released on Wednesday, the European Court of First Instance (CFI) revealed that it has upheld an earlier decision by the European Commission to fine British Airways for antitrust abuses.

Following a complaint from Virgin Atlantic, the EC concluded in 1999 that a system of commission and incentives offered by the airline to selected UK travel agents in return for their loyalty had created a sitution where BA's competitors were effectively excluded from certain sectors of the country's travel market.

Although British Airways appealed the decision on several grounds, the CFI yesterday rejected the firm's appeals.

With regard to the airline's claim that it did not have a dominant position on the UK market, and could therefore not have abused this, the CFI announced that the court "considers it to be established that BA holds a dominant position on the UK market for air travel agency services", because of the number of flights and seats offered, and the number of kilometres flown by BA customers.

The European Court went on to add that in its opinion, the British Airways reward scheme for travel agents had "the effect of restricting the freedom of UK agencies to supply their services to the airlines of their choice, and thus of limiting access by BA's competitors."

It consequently ruled that: "The Commission therefore correctly concluded that BA had abused its dominant position."

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