CJEU travel agency case suggests businesses must actively distance themselves from anti-competitive trading terms

On 21 January 2016 the Court of Justice of the EU (CJEU) ruled that the automatic imposition of a maximum discount level by an online booking platform provider on travel agents could breach EU competition law if the travel agents have not challenged or distanced themselves from the discount cap.

The ruling follows a 2012 decision by the Lithuanian Competition Council to fine online booking provider E-Turas and 29 travel agents an aggregate €1.5million after E-Turas sent a message to agents informing them of a 3% fee cap on discounts. This discount policy was communicated by E-Turas via an automatic message to the agents and the fee cap limit was imposed using technical means.

“Presumed” agreement to anti-competitive activity

In its judgment, the CJEU stated that the automatic message meant that travel agents could be ‘presumed’ to have taken part in an illegal anti-competitive agreement once they had become aware of the message’s content.

However, the CJEU held that this presumption could be rebutted if the travel agents had taken steps to distance themselves from the message or had informed the relevant competition authority of its existence. The CJEU went on to give examples of actions which would satisfy the concept of ‘distancing’ on the facts of this case, such as sending a clear objection to E-Turas’ administrators or the systematic application of discounts above the 3% cap regardless of E-Turas’ policy.

European Commission to review consequences

The European Commission has said that it will assess the consequences of the CJEU’s ruling on this matter. The Commission will focus in particular on the standard of proof required for parties engaged in alleged anti-competitive agreements and practices to show whether or not they have actively distanced themselves from online communications which infer their participation in unlawful conduct.

A reminder to businesses about anti-competitive restrictions

This judgment serves as a reminder to businesses to watch out for anti-competitive restrictions in their contracts. This case demonstrates that passive acceptance of an unlawful restriction – even in circumstances where there is no intention of abiding by it – raises a presumption of breach. The receipt of an automated email from a booking platform imposing a restriction on the maximum level of discount was sufficient to raise a presumption of anti-competitive behaviour, even where the agent had not actively taken steps to engage with the policy.

More generally, businesses need to be proactive in analysing (and, if appropriate, reporting) the content of all business communications to ensure they do not create a presumption of participation in unlawful behaviour.