EC WANTS MORE POWERS TO REVIEW INTERNATIONAL AIRLINE ALLIANCES

EC WANTS MORE POWERS TO REVIEW INTERNATIONAL AIRLINE ALLIANCES    The European Commission has submitted a proposal to the European council and the European Parliament asking for additional powers to review airline alliances and other air transport cases covering air transport between the Europe Union and third countries.
   “This would end the present anomaly where the Commission has jurisdiction on an all-European alliance, but not on an alliance with a U.S. carrier, for example,” the EC said.
   At the moment, the EC said that it lacks effective enforcement powers for the application of the European competition rules to air transport between the European Union and third countries. This has so far been felt, in particular, in cases relating to transatlantic or other alliances between EU and non-EU carriers. Although the EC can examine such an alliance under Article 85 of the treaty of Rome, this procedure merely allows it to “propose” appropriate measures and “authorize” member states to take such measures, the Brussels-based body said. Article 85 does not provide the EC with effective fact-finding tools, nor does it give it powers to stop anticompetitive practices and to impose remedies and penalties.
   The proposed regulation would give the EC powers to examine alliances between EU and non-EU airlines, similar to those that it already has to review alliances between EU-based airlines.
   The Brussels-based body also asked for the power to grant “block-exemptions” (granting immunity to categories of cooperative agreements) when justified. If approved, the EC hopes that the new regulation will be effective on May 1, 2004.
   When looking at transatlantic alliances under existing European competition rules, the EC took six years to make decisions on the alliance between Lufthansa, SAS and United Airlines and on the alliance between KLM and Northwest.