OFT Steps in Where DG Comp Fears to Tread (on Ryanair)

(by Bruce Lyons) Thank goodness for competition between regulators!  Back in July, I wrote about how absurd it was that Ryanair had been allowed to retain a 29.8% stake in Aer Lingus, its rival duopolist out of Dublin airport.  The European Commission claimed the its Merger Regulation gives it no jursidiction over minority shareholdings and this was confirmed by the Court.  Enter the OFT, which announced on Friday that it was considering its own jurisdiction on the issue and is opening a phase I investigation.  In order to refer the case to the UK Competition Commission, it only needs to find that there is a ‘realistic prospect’ of an influence that would significantly lessen competition.  In the light of UK precedent from BSkyB and ITV, it seems likely that this threshold will be met.  A second phase investigation by the CC would have to consider the detailed mechanics of how a 30% share might wield material influence.  Needless to say, Ryanair boss Michael O’Leary is typically forthright in his condemnation of the OFT move.

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