KLM and Schiphol Airport’s commitments to the Authority for Consumers & Markets
On 12 October 2017, the Authority for Consumers and Markets (“ACM”), the Dutch competition authority, terminated its four-year competition investigation into the relationship between KLM and Schiphol Airport. ACM, which carried out dawn raids in the offices of both KLM and Schiphol Airport, concluded that there was no infringement of competition law and, therefore, no fine was imposed. It did, however, find some competition risks, which will have to be addressed in the future by concrete commitments from both parties.
KLM is in a very powerful position at Schiphol as it and its SkyTeam partners account for 70% of flights. ACM’s investigation revealed that the parties had regular communication to maintain this percentage. They also discussed the investment plans of the airport, which led to an easyJet hub being delayed for several years and the business lounge for Emirates never materializing after protest by KLM. In addition, they proposed that Schiphol should take KLM’s position into account in its investments, airport charges and marketing strategy.
ACM concludes in its decision that “such interactions created the risk that Schiphol would not set its strategy independently, but change it to accommodate KLM’s wishes. In this way, the growth opportunities of other airlines may have been frustrated”.
KLM and Schiphol acknowledge the risk and commit to no further communication about growth opportunities of other airlines. As from now, Schiphol will develop its own investment plans, airport charges and marketing strategy independently, without any intervention from KLM. They will not discuss competitors’ requests for bases, lounges or other specific facilities. Other communication (such as the airport’s annual consultation of all its users concerning tariff modifications and investments as set out in the EU Airport Charges Directive) will be conducted in a transparent manner and will be recorded so that ACM can always verify the content. This should ensure a level playing field for competitors at the airport, where capacity is becoming increasingly scarce.
The commitments are made binding by ACM. They are immediately applicable and are valid for five years.
Schiphol Airport and KLM have already expressed their relief that the investigation has finally been terminated and they have emphasized the fact that no infringements were established. They consider it important that the investigation’s conclusions clarify how their relationship should continue in the future. According to them, nothing wrong happened, but as some competition risks cannot be excluded, they are prepared to comply with certain arrangements in the future.
ACM justifies its decision to seek commitments, which it believes are more appropriate as they address the competition risks much faster and more thoroughly. They are immediately applicable and create clarity on the communication between KLM and Schiphol Airport in the complex context in which they operate. As the commitments are valid for five years and form part of the compliance programmes, they will lead to stronger awareness and behavioural change, according to ACM.
