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Aer Lingus' EU lawsuit follows pressure on national regulators
Ken Griffin



AER LINGUS decided to take legal proceedings in an attempt to force the European Commission to make Ryanair divest its 29.4% stake in the airline only after failed attempts to persuade national competition regulators in Britain and Germany to do so.

The revelation came after a spokesman for EU competition commissioner Neelie Kroes said the commission would have no objections if a national competition authority, such as Britain's Office of Fair Trading (OFT), decided to force Ryanair to sell its stake.

The spokesman then stated that the commission knows that Aer Lingus lobbied the OFT to do so "but it wasn't willing to take the case on", something which has been confirmed by Alec Burnside, Aer Lingus' legal counsel in Brussels.

"The problem was the national authorities took the same view that Aer Lingus takes, that the commission has the power to order a divestment but the commission believes it doesn't have that power. So it's a catch-22 situation, " he said.

Burnside refused to comment on what other authorities were lobbied by the airline but legal sources indicated that Germany's Bundeskartellamt was the only other one approached.

Unlike other European competition authorities, both the OFT and the Bundeskartellamt have unusual criteria that allow the purchase of minority shareholdings in companies to be subject to the same rules as mergers.

This was best seen last week when the OFT ordered Sky to sell its 17.9% stake in British broadcaster ITV after finding that its minority shareholding would give it considerable control over ITV's future strategy.




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