Competition Appeal Tribunal upholds Competition Commission decision to require Ryanair to divest its minority stake in Aer Lingus

18/03/14

On 7 March 2014, the Competition Appeal Tribunal gave judgment in the latest round of the Ryanair/Aer Lingus saga, upholding the Competition Commission’s decision requiring Ryanair to reduce its stake in Aer Lingus from its current level of just below 30% to 5%. (See here and here for the results of Ryanair’s previous challenges to the United Kingdom competition authorities’ reviews of its minority stake).

Ryanair had challenged the CC’s decision on six grounds: (1) that the EU law duty of sincere cooperation prevented the CC from ordering divestiture of Ryanair’s 30% stake while the European Courts were still considering Ryanair’s appeals from the European Commission’s rejection of the remedies that Ryanair proffered in connection with its bid for the remaining 70% of Aer Lingus, on the basis that success in Europe for Ryanair would lead to the possibility of a bid that would not be prohibited under the EU merger regulation; (2) that the CC’s process was unfair in not requiring disclosure into a confidentiality ring of sensitive details of discussions between Aer Lingus and other airlines; (3) that the CC had failed to establish a “causal link” between Ryanair’s influence over Aer Lingus and harm to competition; (4) that the CC’s finding of harm to competition was irrational; (5) that the divestiture remedy was disproportionate; and (6) that the CC had no jurisdiction to address orders to Ryanair Holdings plc, which is an Irish company that Ryanair claimed did not carry on business in the United Kingdom.

The Tribunal rejected all six of those grounds. It upheld the CC’s right to order Ryanair to divest its shares without waiting for the conclusion of Ryanair’s EU Court proceedings, and endorsed the CC’s judgments both as to its procedure and in its substantive analysis. The Tribunal also took into account fresh evidence filed by Aer Lingus demonstrating that Ryanair Holdings plc does carry on business in the United Kingdom and so is subject to the CC’s jurisdiction.

The judgment is here.