610 COMPETITION LAW IN TOURISM Indeed, the more obscure the pricing formula is, the more difficult it is for airlines to collude on price. The simpler the pricing formula is, the easier it is for the enforcement authorities to detect if fare increments reflect some form of pricing collusion. This is not to mention, there are territories where airlines are still required to file fares separately (e.g. Hong Kong). For flight routes in or out of the EU, this also places significant obstacles on airlines to the forming of anti-competitive coordination on prices. The Commission’s jurisdiction over these routes has been clarified in its recent decision over collusion on surcharges in the Airfreight Cartel cases22. Despite the lack of blanket fare-filing requirements in the EU, it remains a fact that most airlines are still filing fares, predominantly with the Airline Tariff Publishing Company (ATPCO). Airfare transparency is, at least for now, preserved. It is not a straightjacket that, by the introduction of the NDC distribution channel, airlines will be able to jack up the price to whatever amount they desire. Second, even if it will eventuate into a price increase, one must ask what the actual underlying cause is. The need to push out rich content and ancillaries, i.e., the primary rationale of NDC, is driven solely by the demand of passengers. Full service carriers compete fiercely not only on price and schedule, but also on content and diversity of service (the margin of competition is smaller for low- -cost carriers (LCCs). In other words, competition on product variety, customisation, branding and loyalty intensifies because, as aforesaid, NDC allows these customisations to be made. In terms of economics, the less homogenous two products are, the farther the difference between their prices should be. A price increase is not necessarily indicative of any form of collusion. Product differentiationmay create a slightly easier environment for competing airlines to collusively agree on certain elements of competition, especially in light of the high level of co-operations across the entire airline industry (e.g., code sharing, alliance, interlining, IATA tariff conferences). However, this does not mean NDC by its very nature produce actual or potential effect of restricting competition23. Ultimately, airlines are independent in marketing and selling 22 Case AT.39258 – Airfreight C(2010) 7694 final, paras 815-821. Jurisdictional issue not challenged before the General Court for annulment. 23 A by-object restriction is where, by its very nature, being harmful to the proper functioning of normal competition: Case C-176/16 F. Hoffmann-La Roche Ltd v Autorità Garante della Concorrenza e del Mercato, para 78; Case C-67/13 P Groupment des Cartes Bancaires v European Commission, para 57.
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