OFT not too late to refer to the Competition Commission Ryanair’s acquisition of a minority shareholding in Aer Lingus

08/08/11

Ryanair Holdings plc v Office of Fair Trading [2011] CAT 23

On 28 July 2011 the Competition Appeal Tribunal gave judgment in an appeal by Ryanair against the OFT's decision that it was not out of time to refer Ryanair's acquisition of a minority shareholding in Aer Lingus to the Competition Commission. The bulk of the shareholding was acquired in 2006, around the same time as a public bid by Ryanair for the entire share capital of Aer Lingus. The European Commission blocked the merger but decided that it did not have power to order Ryanair to divest its minority stake. Ryanair appealed to the General Court against the merger prohibition decision, and Aer Lingus appealed against the decision regarding the minority stake. Both appeals were rejected, and neither party appealed to the ECJ.

After the expiry of time for appealing the two General Court judgments to the ECJ (on 17 September 2010), the OFT announced its own investigation into Ryanair's acquisition of the minority shareholding. Ryanair contended that the OFT was out of time. The OFT disagreed, on the basis of the potential conflicting outcomes had the OFT investigated the shareholding while the appeals to the General Court were pending. The Tribunal upheld that decision. The duty of sincere cooperation under Article 10 EC required the OFT to avoid the potential conflicts arising in relation to both the Ryanair and the Aer Lingus appeals to the General Court. Accordingly, a reference to the Competition Commission could not have been made before the expiry of time for appealing to the ECJ from the two judgments of the General Court. The OFT was therefore entitled under section 122(4) of the Enterprise Act to commence its investigation after that date.

The judgment is here.