32 COMPETITION LAW IN TOURISM purchasing individual travel components from travel suppliers and combining them into a package42. Tour operators generally act as a “principal” in relation to travel agents. They may also follow an integrated business model which allows them to offer upstream and downstream services, making them independent of third parties in that regard. Besides large institutional players, smaller (and often local) independent tour operators also take up an important segment of the sector, being, however, particularly vulnerable, given that they do not profit from economies of scale. Considering their competitive disadvantages, they have a weaker position in the market for distribution of travel services. Nonetheless, they also try to consolidate their image and influence, for example, through professional associations43. Travel agencies generally act as an agent of a tour operator, distributing travel services to end-customers44. In that regard, they can be considered as retailers for travel services. For each sold product, they are paid a commission by their tour operator principal. Nevertheless, travel agencies can supply other products, such as accommodation bookings, car rental, insurance, etc. They operate mainly through high street shops or office premises, but also by phone. As mentioned above, this does not rule out the possibility of tour operators offering their own products to consumers through various ways, including through their own outlets, telephone call centres and online activities. As “organisers” and “retailers”45 of package trips, tour operators and travel agencies are subject to a stringent consumer protection legislation – the Package Travel Directive, applicable across the EU since 2018. The recent insolvency of Thomas Cook46, one of the oldest and largest travel groups, is set to test the effectiveness of those rules. At the same time, the more general EU consumer protection legislation47 continues to apply to individual travel arrangements, as well as package trips, to the extent that they are not covered by the Package Travel Directive. 42 Case M.8046 – TUI/Transat France, para. 8. 43 E.g. AITO – the Association of Independent Tour Operators, https://www.aito.com/why-aito/about-aito. 44 Case M.8046 – TUI/Transat France, para. 8. 45 I.e. “a trader who combines and sells or offers for sale packages, either directly or through another trader or together with another trader, or the trader who transmits the traveller’s data to another trader”; see: Package Travel Directive, Article 3(8) and (9). 46 BBC: Thomas Cook: What went wrong at the holiday firm? 23.09.2019, https://www.bbc.com/news/ business-46452374; See also: Timo Kotowski, Die Neuordnung der Urlaubswelt, 13.10.2019, https://www.faz.net/ aktuell/wirtschaft/unternehmen/die-neuordnung-der-urlaubswelt-16431089.html. 47 Such as Unfair Commercial Practices Directive (2005) or Directive on consumer rights (2011).
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