Commission Decision (EU) 2024/1665of 12 June 2024transferring the monitoring and enforcement of commitments made binding in Case M.6447 – IAG / bmi to the designated national competition authority of the United Kingdom pursuant to Article 95(2) of the EU-UK Withdrawal Agreement(Text with EEA relevance)

OJ C, C/2024/1987, 6.3.2024, ELI: http://data.europa.eu/eli/C/2024/1987/oj.

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(19) While the Commission is not required to obtain the interested parties’ approval of the transfer, it will take due account of the views expressed by those parties and verify that the transfer does not have an undue adverse impact on the rights they previously acquired pursuant to the Commitments.

(20) In its letter of 13 March 2024, IAG confirmed it has no objection to the proposed transfer.

(21) By email of 13 March 2024, Air France KLM (AF-KLM) expressed concerns with respect to the possibility that the proposed transfer would result in a modification of the Commitments, and noted that in case there would indeed be a change in the Commitments, it would strongly encourage the Commission to keep the monitoring of the remedies, as it is entitled to pursuant to Article 95(2) of the Withdrawal Agreement, so as to ensure the effectiveness of the remedies, thereby also safeguarding the interests of EU travellers on that route.

(22) By letter of 9 April 2024, another remedy taker expressed its view that the Commitments are better monitored and enforced by the Commission. The remedy taker explained that where it has previously faced concerns as a remedy taker under the Commitments in light of the conduct of IAG/British Airways, it has often found it beneficial to raise such concerns directly with the Commission. The remedy taker considers that this approach was effective given the Commission’s detailed background and experience of the underlying investigation into the IAG / bmi case and its understanding of the scope and intended aims of the Commitments. The remedy taker is concerned that the CMA will inevitably not hold the same background and experience and that, by transferring responsibility to the CMA, the monitoring and enforcement of the Commitments would be less effective.

(23) No other parties expressed views in relation to the proposed transfer.

3.3.

Assessment

(24) Beyond the requirement for an explicit agreement of the CMA, Article 95(2) of the Withdrawal Agreement does not list any conditions or criteria for such transfer. Therefore, it is at the Commission’s discretion to decide whether a case is suitable for a transfer, based on a case-by-case assessment, while taking due account of any views expressed by any interested parties.

(25) For the reasons set out below, the Commission considers that the monitoring and enforcement of the Commitments in this case is suitable to be transferred to the CMA.

(26) First, the case concerns mainly UK and other non-EEA consumers and, as such, it is appropriate that the CMA would be responsible for the monitoring and enforcement of the Commitments in order to protect the interests of UK consumers. Pursuant to the Commitments, the remedy Slots are to be operated on specific routes. Only one of these routes involves a destination in the EEA (LHR-Nice), whereas the remaining routes on which remedy Slots could be operated are either intra UK routes (LHR-Aberdeen and LHR-Edinburgh), or routes connecting London with non-EEA destinations (Moscow, Cairo, and Riyadh). In 2019, the number of Origin and Destination (O&D) and total passengers (i.e. including transferring passengers) on the LHR-Nice route (350034 and 511494 passenger respectively) represented 16 % and 13 % of the O&D and total passengers on all remedy routes (2188002 and 3811214 passengers)

Monitoring Trustee estimates using MIDT data and CAA data. In 2023 the share of the LHR-Nice route increased to 24 % (434214 passengers) and 19 % (633101 passengers) of the O&D and total passenger on the remedy routes respectively, among others due to the fact that no passengers are currently flying on the LHE-Moscow route.

. In this respect, the Commission considers that the CMA has all incentives to implement the Commitments, including on the LHR-Nice route, as the Commitments affect many UK customers. Moreover, the CMA has reason to implement the Commitments, including on the LHR-Nice route, as the services provided to EEA customers on this route are also provided in the UK, and as the LHR-Nice route matters for ensuring the connection of leisure and business travellers to the London metropolitan area.

(27) Second, the Commitments with respect to Slots and pro-rate agreements among others are to be implemented at LHR in the UK, and the LHR Slots are subject to UK rules and regulatory decisions by UK national authorities including the LHR slot coordinator and the UK’s Department for Transport. The CMA is better placed than the Commission to handle contacts with these authorities.

(28) Third, the Commission does not consider that the transfer will have an adverse effect on any of the interested parties. In the first place, with respect to AF-KLM’s concern that the Transfer may lead to a modification of the Commitments, the Commission notes that the current decision transfers the Commitments as they stand. No modification or waiver of the Commitments were requested by IAG in the context of the proposed transfer. While it cannot be excluded that modifications or waiver requests will be made in the future pursuant to UK national proceedings, any such requests would have to be assessed based on the principles set out in the review clause included in the Commitments, which are transferred as a whole.

(29) In the second place, with respect to the other remedy taker’s concern that the CMA will not hold the same background and experience compared to the Commission to monitor and enforce the Commitments (as described in recital 22 above), the Commission notes that the Monitoring Trustee, who has expertise in the aviation industry and has assisted the Commission with the monitoring of the Commitments since the Merger Decision, will continue providing similar assistance to the CMA after the transfer. Furthermore, the CMA has experience in monitoring and enforcement of slot remedies and pro-rate agreements, through the interim measures issued in its investigation into the Atlantic Joint Business Agreement

CMA case number 50616, decisions of 7 September 2020 and 4 April 2022.

. The Commission therefore considers that the transfer will not negatively affect the effectiveness of the monitoring and enforcement of the Commitments.

(30) Fourth, the case is expected to continue requiring resources in the future. Given that the case mainly affects UK markets and UK consumers, or other non-EEA customers travelling to/from the UK, it seems appropriate that these resources are vested by the UK. As explained in recital 3 above, the Commitments are of unlimited duration and, except for any waiver granted pursuant to the review clause, will remain in force as long as there is no change to the competitive situation in the relevant markets. As long as Slots remain available or become available again, and applications are made to obtain them, decisions assessing the viability of Prospective Entrants applying for remedy Slots and approval of agreements between IAG/British Airways and the remedy takers, as well as decisions granting grandfathering rights will continue to be required. Even if and when all the remedy Slots are granted to remedy takers, monitoring of IAG’s compliance with the Commitments will continue as long as the Commitments remain in force.

(31) Fifth, the transfer of the implementation of all of the remedy obligations is justified and proportionate. It is not possible to separate the LHR-Nice route (the only route with an EEA destination) from the other routes. Pursuant to the Commitments

Clause 1.1.2.

, Slots are offered as a pool, with a maximal number of Slots that could be used on certain types of routes (namely intra-UK or not). Out of the routes covered by the Commitments, the routes on which the Slots will actually be operated depend on the requests of the Prospective Entrants.

1. Scope of the transfer

(32) The transfer to the CMA covers the effective monitoring and enforcement of the Commitments in their entirety. As a consequence of the transfer, the Commission will no longer pursue any monitoring and enforcement activities in relation to this case.

(33) According to the first sentence of Article 95(2) of the Withdrawal Agreement, unless otherwise agreed between the European Commission and the designated national competition authority of the United Kingdom, the European Commission shall continue to be competent to monitor and enforce commitments …. The second sentence of Article 95(2) refers to the possibility to transfer to the CMA the monitoring and enforcement of such commitments …. Accordingly, pursuant to Article 95(2) of the Withdrawal Agreement, the transfer shall in principle cover all the aspects of monitoring and enforcement and all the actions necessary for such monitoring and enforcement.

(34) In view of the above, after the transfer under Article 95(2) of the Withdrawal Agreement, the Commission will no longer intervene regarding any aspect of the monitoring and enforcement of the Commitments. In particular, it can no longer be called upon to review or revoke the Commitments, nor would it impose fines in the event of a violation that happened as of the transfer

This also corresponds to the common understanding that reviewing or revoking commitments and imposing fines should be considered as forms of enforcement of commitments pursuant to the Merger Regulation. This is confirmed by recital 31 of the Merger Regulation which, in relation to enforcement of commitments, refers to the ability to revoke merger decisions and the power to impose financial sanctions. See also Case T-471/11, Editions Odile Jacob, §§82-83.

. Accordingly, after the transfer, the CMA will henceforth be responsible for the monitoring and enforcement of the Commitments in all respects.

(35) Finally, it should be clarified that, after the transfer pursuant to Article 95(2) of the Withdrawal Agreement, the CMA will be responsible to monitor and enforce the Commitments pursuant to its own national law. In this respect, it is important to note that, pursuant to Article 95(1) of the Withdrawal Agreement, the Merger Decision is binding on the UK. It is thus for third parties to assert their possible rights stemming from the Merger Decision within the domestic legal system of the UK.

1. Conclusion

(36) On the basis of the considerations set out above, and having taken due account of the views of any interested parties, the Commission concludes that the monitoring and enforcement of the Commitments made binding in Case M.6447 – IAG / bmi should be transferred to the CMA,

HAS ADOPTED THIS DECISION:

Article 1

The monitoring and enforcement of the Commitments in Case M.6447 – IAG / bmi shall be transferred to the designated national competition authority of the United Kingdom, which shall be informed of this Decision.

Article 2

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

It shall apply from 1 July 2024.

Done at Brussels, 12 June 2024.

For the Commission

The President

Ursula von der Leyen