Competition Law in Tourism

Competition Issues in Air Ticket Sales through Global Distribution Systems – Distribution Cost Charge and Location-Dependant Ticket Prices: Analysis of an Austrian Supreme Court Decision Michael Wukoschitz1 1. Introduction; 2. Findings of the Restrictive Practices Court; 2.1. GDS; 2.2. Introduction of DCC; 2.3. Market Definition; 2.4. Differences in Ticket Prices; 3. Legal Assessment of the Restrictive Practices Court; 4. Supreme Court Decision; 4.1. DCC; 4.2. Price Discrimination; 4.2.1. Responsibility; 4.2.2. Dominant market position; 4.2.3. Market abuse; 4.2.4. Extent of the cease and desist order; 5. Analysis. 1. INTRODUCTION In 2016, the trade association of the Austrian travel agents2 filed an action for an injunction against Lufthansa (LH). The trade association alleged that the airline had not only abused its dominant position by charging a Distribution Cost Charge (DCC) of 16.00 € for any Global Distribution System (GDS) booking by a travel agency, but it had also infringed the law by applying different fares for the same flight, depending on the location where the booking had been made. LH contested those allegations and stated the DCC would not even cover the extra costs caused by the use of GDSs. Furthermore, travel agencies had the opportunity to use other distribution channels to avoid the DCC, such as using LH’s consumer website. 1 Dr Michael Wukoschitz is an Attorney at Law in Austria and President emeritus of International Forum of Travel and Tourism Advocates (IFTTA). 2 Fachverband der Reisebüros in der Wirtschaftskammer Österreich (Professional Association of Travel Agencies in the Austrian Federal Economic Chamber).