1. Marko Stilinović, mag iur; Legal Counsel in PLIVA HRVATSKA d.o.o.
CODE-SHARING AGREEMENTS AND COMPETITION PROTECTION IN THE EUROPEAN UNION
Marko Stilinović, mag iur; Legal Counsel in PLIVA HRVATSKA d.o.o.

2. Content Introduction into Code-sharing agreements
Legal and factual background of cases
Commission’s concerns
Airlines market – Analysis
Critical points for analysis
How to overcome this legal uncertainty

3. Code-sharing Agreements
Code-sharing Agreement - marketing arrangement among two or more airlines whereby one or more carriers (marketing carriers) adopt their designator codes to sell tickets on a flight which is operated by their partner carrier (operating carrier).

4. Code-sharing Agreements
Parallel code-sharing

5. Code-sharing Agreements
Unilateral code-sharing

6. Code-sharing Agreements
Behind and beyond code-sharing

7. Legal and factual background
Case AT.39794
Case AT.39860
Lufthansa – Turkish Airlines (Munich/Frankfurt – Istanbul routes)
Parallel hub-to-hub Code-Sharing; Free flow ticket selling arrangement
Case closed
Brussels Airlines – TAP (Brussels – Lisbon route)
Parallel hub-to-hub Code-Sharing; Free flow ticket selling arrangement
Further investigation

8. Commission’s concerns:
Airlines are pursuing anti-competitive strategy by:
discussing a capacity reduction (number of seats) and an alignment of their pricing policy on the route;
granting each other unlimited rights to sell seats on each other's flights on the route (where they had previously competed);
implementing these arrangements by actually reducing capacity, completely aligning their fare structures as well as their ticket prices on the route.

9. Commission’s concerns:
Despite similarities, Lufthansa – Turkish Airlines case is different:
Parties do not have full marketing rights to each other's seat inventory;
Differing pricing strategies were applied;
Code-sharing accounted for only a marginal share of the parties' sales on the routes of concern.

10. Airlines market – analysis
Oligopoly market (few big players);
High barriers for entry;
Scarce case-law (mostly concerns M&As);
„Special status” of airline industry

11. Critical points for analysis
Code-sharing type (Unilateral, Parallel or Behind-and-Beyond)
Definition of market and barriers to entry;
Pricing strategy;
Capacity usage;
Impact on market.

12. How to overcome this legal uncertainty?
Guidelines?
Remedies?