EC Articles 84 and 85 - notifications

A party to an agreement who thinks that it may infringe the prohibition in Article 81(1) or a person who thinks that their conduct may infringe the prohibition in Article 82 may notify the OFT of the agreement or conduct and apply to it for a decision. A summary of the nature and objectives of the notifications for a decision, and the outcome, are set out below.

The summary of the notifications for decision is maintained in the Enforcement Regulations 2001 public register on this web page, and a copy is held in paper form at OFT premises for public inspection.

Notified cases

Case title: United Airlines/bmi british midland Alliance Expansion Agreement
SIC code: 62.10 
Case ID:  CP/1535-01
Date: 20/12/01 
Parties to the arrangement:
British Midland Airways Limited (doing business as bmi british midland (bmi)); United Air Lines, Inc (United) 
Summary of the nature and objectives of the arrangement:
The United/bmi Alliance Expansion Agreement of 5 September 2001 provides for enhanced United and bmi cooperation (expanding on their existing agreements). The agreement covers the following areas: route and schedule coordination throughout global networks; integrated marketing, advertising and distribution networks; co-branding and joint product development; increased codesharing across as much as the route networks as possible; coordinated pricing, inventory and yield management; revenue sharing; expanded coordination of frequent flyer programs; joint procurement; coordinated support services (e.g. ground handling, shared lounge facilities); integrated cargo services; coordination of information systems; harmonisation of financial reporting, standards and quality assurance; sharing of technical services, maintenance and sharing of facilities at airports.
Outcome:
20/12/01 The Director General of Fair Trading has issued a press release inviting comments from third parties on the alliance. Written comments are requested by 25 January 2002.
The Director General of Fair Trading is currently also investigating the proposed alliance between British Airways and American Airlines (dated 31 August 2001). The two agreements raise a number of similar issues, and the impact on competition of each agreement will be affected to some extent by the other. For this reason, third parties are also invited to comment on the impact of the United/bmi agreement on the proposed BA/AA alliance, and the impact of the proposed BA/AA alliance on the United/bmi agreement.
22/2/02 The Director General is no longer investigating the BA/AA alliance following the withdrawal of the notification (see Case CP/1100-01) but is continuing his consideration of the notification by United and bmi.
9/8/02 The Director General has published a notice setting out his proposal to grant the Alliance Agreement between British Midland and United an unconditional exemption under Article 81(3) of the EC Treaty. Third parties are invited to comment on this proposal. The deadline for written representations is 20 September 2002.
1/11/02 The Director General has announced his decision to grant the Alliance Agreement between British Midland and United an unconditional exemption under Article 81(3) of the EC Treaty. The Agreement will not be implemented until the restrictions preventing British Midland from operating transatlantic services from London Heathrow are lifted. The exemption will take effect from that date and is granted for a period of seven years, or until 31 December 2010, whichever is earlier. The Agreement will also benefit from an exemption from the Chapter I prohibition of the Competition Act 1998. See press release

 

Case title: British Airways and American Airlines Alliance Agreement
SIC code:  62.10 
Case ID: CP/1100-01
Date: 31/8/01
Parties to the arrangement:
British Airways plc; American Airlines, Inc.
Summary of the nature and objectives of the arrangement:
The American/British Airways Alliance Agreement of August 3 2001 establishes the contractual framework for comprehensive collaboration and coordination between the two carriers in a global alliance. The following key areas are addressed by the Alliance Agreement:
A benefit sharing arrangement covering (i) BA and American's nonstop services between London and Boston, Chicago, Dallas/Ft. Worth, Los Angeles, Miami, New York (including Newark), and Raleigh/Durham, (ii) TWA's (and American's when subsequently transitioned) nonstop services between London and St. Louis, and (iii) BA's nonstop services between London and San Francisco.
For services between the U.S. and the European region, and other routes within the proposed alliance's network, the parties will adopt joint pricing principles and coordinate pricing; jointly coordinate the development of revenue plans for alliance services and the management of inventory; and coordinate schedules of alliance services and connections and develop joint network plans.
The parties will engage in reciprocal codesharing services on their respective US-UK nonstop routes and, to the fullest extent allowed by applicable bilateral agreements, on behind and beyond services.
The parties will offer fully reciprocal, worldwide frequent flyer programs, which will allow members of one party's frequent flyer program to accrue and redeem awards on the services of the other party.
The parties have agreed to cooperate in marketing and sales.
The parties contemplate sharing and co-locating facilities at the airports they serve, so far as practicable, to enhance product seamlessness, while maintaining their separate identities.
The parties intend to cooperate with respect to cargo services.
Outcome:
31/8/01 The Director General of Fair Trading has issued a press release inviting comments from third parties on the alliance. Written comments are requested by 28 September 2001. 
22/2/02  The AA/BA Alliance Agreements have been terminated and the notification has been withdrawn.
1/7/02 The European Commission has published its second edition of the EC Competition Policy Newsletter 2002 (pdf). The newsletter includes an article on the proposed British Airways and American Airlines alliance on which the Commission and the Office of Fair Trading worked closely earlier this year. The article explains the procedure followed, some of the competition concerns that were considered and the circumstances surrounding the parties' withdrawal of their notification before the Office had reached a formal decision. 

Back to: EC Articles 84 and 85 Public Register