The purchase of slots from a non-active carrier amounts to a relevant concentration
Consistently with its decisional practice, the Italian Competition Authority (ICA) has confirmed that under the Italian Competition Act (Act 287/90) the acquisition of titles conferring the right to perform economic activities is a concentration and, accordingly, has to be notified to the ICA for the statutory competition assessment (AGCM, decision n. 19479, case C7708, Alitalia/Ramo di Azienda di Gandalf, Boll. 5/2009).
In 2004 Alitalia purchased a number of assets from the Gandalf, an minor Italian airline which had gone out of business some time before. These assets included the authorization for the provision of air transport services granted by the Italian aviation regulator, the registered trademark “Gandald Airlines” with the logo “G”, three pair of slots at the airport of Linate in Milan and some other items. Believing that the purchase of assets from a firm no longer active in the marketplace did not amount to a concentration for the purpose of the Act 287/90, Alitalia did not notify this transaction to the ICA as required by Article 16.
Yet, this interpretation of the notion of concentration submitted by Alitalia is not shared by the ICA. The ICA has since long set out that the decisive criterion to ascertain whether the acquisition of control over some assets, as in the case of Alitalia/Gandalf transaction, can be qualified as a concentration does not refer to the fact whether the vendor was using these assets for carrying out economic activities. Instead, the crucial question is whether the assets are capable of generating revenues and if they are so, the transaction amounts to a concentration. The ICA found that the assets Alitalia purchased from Gandalf enable the purchaser to perform an economic activity, generate a revenue and, eventually, to modify its market share. This all the more true with regard to the pairs of slots bought by Alitalia at Linate. It is known that Linate has the status of congested airport and slots at this airport are always in short supply. With the transaction at issue Alitalia took the opportunity to gain access to three precious pair of slots and so to extend its operations from/to this airports. In conclusion, the ICA found Alitalia liable for breaching the obligation to notify a relevant concentration and, upon the basis of Article 19, imposed on it a € 5,000 fine.
The ICA and Commission diverge as for the finding of a relevant concentration in the acquisition of control over a set of assets. The former opts for a more relaxed approach, the only condition being that the assets are capable of generating a revenue, regardless of whether they are employed at the moment to carry out an economic activity. To the contrary, more stringently, Commission requires that a market turnover must be clearly attributed to the assets in order to qualify the acquisition of these as a concentration (see Commission Consolidated Jurisdictional Notice, http://eur-ex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:095:0001:0048:EN:PDF.
Lastly, quite ironically, the ICA was unable to assess the competition impact of the Alitalia/Gandalf concentration. Later Alitalia itself, after a long agony, went out of business and all its assets, included the pair of slots purchased from Gandalf are now in the hands of Alitalia successor, CAI. As is know the Alitalia/CAI concentration has been authorized by the Italian Government by means of the decree 134/2008. The decree granted the merging parties immunities from the ICA antitrust scrutiny for reasons of general interest, though the transaction was universally thought to result in the merged entity having a monopoly or dominant position in many routes within the domestic air transport market.
In 2004 Alitalia purchased a number of assets from the Gandalf, an minor Italian airline which had gone out of business some time before. These assets included the authorization for the provision of air transport services granted by the Italian aviation regulator, the registered trademark “Gandald Airlines” with the logo “G”, three pair of slots at the airport of Linate in Milan and some other items. Believing that the purchase of assets from a firm no longer active in the marketplace did not amount to a concentration for the purpose of the Act 287/90, Alitalia did not notify this transaction to the ICA as required by Article 16.
Yet, this interpretation of the notion of concentration submitted by Alitalia is not shared by the ICA. The ICA has since long set out that the decisive criterion to ascertain whether the acquisition of control over some assets, as in the case of Alitalia/Gandalf transaction, can be qualified as a concentration does not refer to the fact whether the vendor was using these assets for carrying out economic activities. Instead, the crucial question is whether the assets are capable of generating revenues and if they are so, the transaction amounts to a concentration. The ICA found that the assets Alitalia purchased from Gandalf enable the purchaser to perform an economic activity, generate a revenue and, eventually, to modify its market share. This all the more true with regard to the pairs of slots bought by Alitalia at Linate. It is known that Linate has the status of congested airport and slots at this airport are always in short supply. With the transaction at issue Alitalia took the opportunity to gain access to three precious pair of slots and so to extend its operations from/to this airports. In conclusion, the ICA found Alitalia liable for breaching the obligation to notify a relevant concentration and, upon the basis of Article 19, imposed on it a € 5,000 fine.
The ICA and Commission diverge as for the finding of a relevant concentration in the acquisition of control over a set of assets. The former opts for a more relaxed approach, the only condition being that the assets are capable of generating a revenue, regardless of whether they are employed at the moment to carry out an economic activity. To the contrary, more stringently, Commission requires that a market turnover must be clearly attributed to the assets in order to qualify the acquisition of these as a concentration (see Commission Consolidated Jurisdictional Notice, http://eur-ex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:095:0001:0048:EN:PDF.
Lastly, quite ironically, the ICA was unable to assess the competition impact of the Alitalia/Gandalf concentration. Later Alitalia itself, after a long agony, went out of business and all its assets, included the pair of slots purchased from Gandalf are now in the hands of Alitalia successor, CAI. As is know the Alitalia/CAI concentration has been authorized by the Italian Government by means of the decree 134/2008. The decree granted the merging parties immunities from the ICA antitrust scrutiny for reasons of general interest, though the transaction was universally thought to result in the merged entity having a monopoly or dominant position in many routes within the domestic air transport market.
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