Competition law

Competition law

Do sector-specific or general competition rules apply to aviation?

There are no sector-specific legislative rules in this regard for the aviation sector in Ireland, other than with respect to airport charges, the regulation of ground handling services, and allocation of slots, which are regulated by the Commission for Aviation Regulation (CAR). The Competition Acts 2002 to 2017 (as amended) and EU competition legislation and, in the case of mergers, Regulation (EC) No. 139/2004 are applicable in Ireland and prohibit anticompetitive agreements and abuses of dominant market position. The Competition Acts 2002 to 2017 (as amended) implements articles 101 (anticompetitive agreements) and 102 (abuse of a dominant position) of the Treaty on the Functioning of the European Union (TFEU).

Regulator

Is there a sector-specific regulator, or are competition rules applied by the general competition authority?

The CAR’s remit under the 2001 Act extends to the areas of slot regulation, airport charges and licensing of air carriers. The generally applicable Irish and EU competition laws, to which air carriers are also subject, are enforced by the Competition and Consumer Protection Commission (CCPC).

Market definition

How is the relevant market for the purposes of a competition assessment in the aviation sector defined by the competition authorities?

There is no specific statutory definition of the relevant market, which would need to be determined by reference to the particular facts of a case having regard to the sector of the market and any relevant decisions of the EU courts and the CCPC. The relevant market in a particular instance could be as narrow as particular type of passenger or as broad as a particular route or routes to a particular market.

Code-sharing and joint ventures

How have the competition authorities regulated code-sharing and air-carrier joint ventures?

Ireland has no specific rules dealing with code sharing or similar arrangements. Air carrier joint ventures are subject to Irish and EU competition law and the regular rules apply in this regard. The CCPC, which is the Irish body responsible for regulatory oversight in matters of EU competition and merger law, follows EU precedent in relation to air carrier joint venture arrangements. The CCPC can take enforcement action by way of criminal or civil proceedings. Mergers or acquisitions of airlines (including joint ventures and code sharing) fall within the remit of the Competition Acts 2002 to 2017 (as amended) and, subject to satisfying certain financial turnover thresholds, may require mandatory CCPC pre-clearance or clearance from the European Commission.

Assessing competitive effect

What are the main standards for assessing the competitive effect of a transaction?

Section 4 of the Competition Act 2002 (as amended) sets out the main standards for assessing whether a transaction could be viewed as an agreement or concerted practice with the object or effect of preventing, restricting, or distorting competition in any part of Ireland. This reflects the standards of assessment under article 101 of the TFEU. Section 5 of the Competition Act 2002 (as amended) sets out the standards for assessing abuses of market positions by dominant market undertakings.

Remedies

What types of remedies have been imposed to remedy concerns identified by the competition authorities?

The CCPC has wide-ranging powers under Irish law to investigate suspected breaches of competition law, including the power to conduct dawn raids. The CCPC may also initiate criminal proceedings against undertakings and individuals suspected to have breached competition law and can pursue both criminal and civil proceedings in the Irish courts. The Competition Acts 2002 to 2017 (as amended) provide for quite severe penalties for those found to be in breach of competition law, including imprisonment.

Financial support and state aid

Rules and principles

Are there sector-specific rules regulating direct or indirect financial support to companies by the government or government-controlled agencies or companies (state aid) in the aviation sector? Is state aid regulated generally?

Yes. In the aviation sector in particular, Ireland applies the European Commission guidelines on state aid to airlines and airports (2014/C 99/03), which establish the conditions under which EU member states can grant state aid to airlines and airports. Although no national laws exist to implement EU state aid rules or guidelines, Ireland applies EU law and follows EU guidance on state aid. The Irish state provides financial assistance to certain regional airports through various assistance programmes and public services obligation air services schemes, such as those with Kerry and Donegal airports, to support and encourage regional economic development. The Irish courts are responsible for oversight and enforcement of state aid rules.

In 2019, the Irish High Court delivered a notable ruling on state aid (Ireland and another v Aer Arann [2019] IEHC 545), in which it rejected the arguments of Aer Arann against the recovery of state aid, and followed the European Commission’s state aid decision (OJ L 119, 30.4.2013, pp 30-39) wherein it ordered the Irish government to recover unlawful aid from benefiting airlines.

What are the main principles of the state aid rules applicable to the aviation sector?

No specific national laws exist in Ireland to implement EU state aid rules or guidelines. In practice, however, the CCPC and DTTAS has regard the European Commission guidelines this area, as mentioned above, which set out how EU member states can provide aid to airlines and airports. The regulations with respect to state aid as set out in the TFEU also have direct effect in Ireland.

Exemptions

Are there exemptions from the state aid rules or situations in which they do not apply?

Ireland applies EU rules on state aid. State aid can be permissible in some limited circumstances if compatible with EU law. For example, state aid may be permissible in setting up new strategic air routes and for certain investments in airport infrastructure in order to foster accessibility to certain regions, under strict conditions.

Clearance of state aid

Must clearance from the competition authorities be obtained before state aid may be granted? What are the main procedural steps for doing so?

Ireland applies EU law in this respect and EU Commission approval must be sought before the granting of state aid that falls within the remit of EU state aid rules.

Recovery of unlawful state aid

If no clearance is obtained, what procedures apply to recover unlawfully granted state aid?

Council Regulation (EU) No. 1589/2015 specifies recovery procedures for unlawfully granted state aid. The European Commission may investigate unlawfully granted state aid cases and may require EU member states to suspend and recover such aid from the beneficiary. 

Law stated date

Correct on:

Give the date on which the above content is accurate.

24 July 2020.