On 23 November 2018, the European Commission opened a formal investigation concerning the commercial agreement between airlines and travel agents on one side and two leading Global Distribution Systems suppliers, Amadeus and Sabre, on the other.

Amadeus, based in Spain, and Sabre, based in the United States, are global leaders in providing IT services for the travel industry, such as airline tickets reservations services as well as software that manages airlines’ reservations and inventory.

Today airlines sell around 70% of their tickets via third parties; the Commission wants to ascertain whether the said commercial agreements breach European competition rules considering that, as stated bycommissioner Margrethe Vestager, “…such restrictions could create barriers to innovation and raise ticket distribution costs, ultimately raising ticket prices for travelers…”.

The Commission, on the basis of article 17 of Regulation No 1/2003/EC, may open a formal investigation into a particular sector of the economy or particular type of agreements across various sectors, whenever the circumstances suggest that competition may be restricted or distorted within the common market in accordance with the provisions of article 101 of the Treaty on the Functioning of the European Union. The formal investigation procedure is not bound by any legal deadline. Should the Commission actually find the alleged breach, it will be entitled to impose the companies a fine not exceeding 10 % of their total turnoverin the preceding business year, pursuant to article 23, paragraph 2, of Regulation No 1/2003/EC.

Davide Scavuzzo