IS THE AIRLINE INDUSTRY A NATURAL MONOPOLY 175 process of internal market integration and seeks to prevent the existence of “national” monopolies. Economic theories would try to explain the market as a whole. On the contrary, the legal assessment will focus mainly on the competitive issues that are raised by the authorities on specific cases. In that regard, the analysis of legal cases and economic theories are asymmetric. However, to a certain extent, economics has been increasingly important in legal reasoning, and the classical economic approach taken by the EU Commission regularly attracted criticisms over time. For example, before the new EUmerger regulation, in 2004, a few EU Commission decisions were overturned in Airtours/First Choice, Schneider/Legrand and Tetra Laval/Sidel. In 2019, the CJEU5 confirmed that the EU Commission had breached the rights of defence in blocking UPS/ TNT Express6 regarding the notification of decisions based on econometric models. The EU Commission also blocked the merger Siemens/Alstom7 that would have created the world’s second-largest rail company, leading to criticisms as well as calls for changes to EU competition law enforcement policy8. The fact remains that, in more than thirty years, the vast majority of mergers (more than 6,000) have been approved by the EU Commission and only less than 30 mergers were banned. 1.2. The Paradox of Airline Economics The airline industry faces a paradox. On the one hand, it would follow a tendency to monopoly or oligopoly that would justify concentration for the sake of economic survival. On the other hand, it could be viewed as an open sky where entry and exit are easy and free and where markets are subjected to competitive forces. “airlines may have an inherent tendency toward gradual elimination of competitors, with a resultant oligopoly, or even monopoly, in a market. This is a controversial point, but a belief in such a tendency has been one basis for 5 Court of Justice of the European Union. The Commission appealed the EU General Court’s judgment to the CJEU. 6 Case C265/17P, European Commission v United Parcel Service, Inc. (2019), ECLI:EU:C:2019:23. Case T194/13, United Parcel Service, Inc. v European Commission (2017), ECLI:EU:T:2017:144. Commission Decision in Case COMP/M.6570, UPS/TNT Express (2013). 7 EU Commission Decision in Case COMP/M.8677, Siemens/Alstom, 06 02.2019. 8 This decision led to proposals made by France and Germany governments for a reform of EU merger control questioning the primacy of consumer welfare.
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