194 COMPETITION LAW IN TOURISM increase prices, reduce output, choice or quality of goods and services, diminish innovation, or otherwise influence parameters of competition”53. Dominance itself is not enough to bring evidence of a competition issue, and it is worth noting that the EU Merger Guidelines takes into account the likelihood that efficiencies “would act as a factor counteracting the harmful effects on competition which might otherwise result from the merger”54. The EU Commission admits that a concentration at airport bases and economies of scale, scope and density are necessary as the airline industry remains a high fixed cost sector that requires efficiencies. In Ryanair/Aer Lingus III, the competitors themselves recognised the existence of efficiencies at airport bases: “The importance of economies of scale and scope arising from base presence at Dublin airport, as well as in Cork and Shannon airports emerges from competitors’ responses to the Commission’s market investigation. Several competitors confirmed the advantages of economies of scale and scope, increased operational flexibility and other advantages provided by base operations”. However, the idyllic assumption contending that these efficiencies would be automatically transferred to consumers through lower prices is not yet recognised as a founding principle of competition policy. This would imply that any monopolistic carrier will seek to transfer naturally its surplus to the consumer, instead of seeking its own profit. That is the reason why the EU Commission will require cumulative conditions the main one being that the efficiencies have to “benefit consumers”. The red line remains that a concentration, even with high efficiency gains, should not be declared compatible with the internal market if it is likely to harm the consumers. As regards the process of the competition itself, in the absence of direct or potential constraint, the view remains that a monopolistic company would rather seek to increase its profit through price increases or (decrease in quality), instead of transferring a part of its surplus to the consumers or instead of investing into new aircraft capacities and innovative products and services. 53 Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings OJ C 31, 5.2.2004, para 8. 54 Point 10(e) of the EU Merger Guidelines.
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