EU Commission's Skyteam decision confirms room for efficiency defense

On 29 June 2015, the Commission published a summary of its decision to clear a joint venture between Air France/KLM, Alitalia and Delta Airlines to service passenger routes between Europe and North America, subject to commitments. The decision confirms that restrictions falling under the cartel prohibition of 101(1) TFEU may be justified if parties can substantiate efficiencies, even when it concerns agreements that are considered object restrictions.

The case dates back to June 2006, when a statement of objections was sent to all members of the Skyteam. The Commission closed this investigation in 2012 for discretionary reasons but immediately opened another investigation specifically targeted at the cooperation between Skyteam members Air France/KLM, Alitalia and Delta Airlines with regard to transatlantic routes. The Commission also investigated the airline alliances One World and Star Alliance, which led to commitment decisions in 2010 and 2013. 

In its preliminary assessment of 26 September 2014, the Commission concluded that the cooperation between Air France/KLM, Alitalia and Delta Airlines had an anti-competitive object by providing for extensive cooperation in relation to price, capacity, scheduling and quality of service, which would eliminate competition between the parties on routes from Amsterdam, Paris and Rome to New York for premium and/or non-premium passengers.

The Commission accepted commitments by the parties which were aimed at encouraging other airlines to compete on the relevant routes, most importantly by making available landing and take-off slots on the Amsterdam, Rome and New York airports. The commitments are similar to the ones offered in the context of the One World and Star Alliance investigations.

The case concerns one of the rare assessments by the Commission under Article 101(3) TFEU. In the assessment of the requirements of this article, the focus of the Commission appears to be first on the parties being able to substantiate that the efficiencies of their cooperation outweigh the restrictive effect, and second, the remaining competition from other parties. It is generally challenging to prove that efficiencies outweigh the effects of restrictions and this will usually require economic evidence. The airline alliance decisions show, however, that this can be done in specific market contexts.