The Competition Commission of India (CCI) has cleared the foreign airlines of the charges of cartelisation and abuse of dominant position as alleged by the Travel Agents Association of India (TAAI).

TAAI had approached CCI in December 2009 and filed a complaint under Section 19 of the Competition Act, 2002 alleging contravention of the provisions of the Act by Lufthansa German Airlines, Continental Airlines, KLM Royal Dutch Airlines, Swiss International Airlines, Singapore Airlines, Air Canada, Air France and North West Airlines.

TAAI had alleged that the decision of the foreign airlines to end the practice of giving commissions to travel agents for ticketing services was an anticompetitive move.

It was further alleged that the foreign airlines intentionally decided not to enforce the ‘transaction fee’ system as pronounced earlier and since November 2008, have neither been paying commission on earlier rates nor transaction fees to the travel agents.

The matter was referred to the Director General (DG) (the investigating arm of CCI) for investigation, who in his report gave findings in favour of the foreign airlines as the DG found no evidence of collusion.

Principal Associate Naval Chopra from Amarchand & Mangaldas argued the matter on behalf of Singapore Airlines, Partner G.R. Bhatia from Luthra & Luthra along with Ravisekhar Nair and Karan S. Chandhiok represented Lufthansa German Airlines and Austrian Airlines while Amir Pasrich of Pasrich & Company argued on behalf of Northwestern and Delta Airlines, amongst others.  

Bhupendra Singh Chauhan of Indus Law argued the matter on behalf of TAAI.

The CCI in its 13-page order observed that all airlines have taken independent decisions to abolish the system of commission and there is no evidence of the meeting of minds.

The CCI did not find any contravention of Sections 3 or 4 of the Act.  The CCI, in its order stated, “There is no material on record to show that subsequent to the abolition of the commission, the prices of the air tickets of opposite parties have gone up”.  The CCI noted that no harm has been caused to the end consumers by abolishing the system of payment of commission to the travel agents by the opposite parties.