Competition Authority forces climbdown by travel agents

THE Competition Authority has shown its teeth and forced travel agents to abandon their plan to boycott Ryanair. In a statement, the authority said it had sent a written warning to the Irish Travel Agents Association that any such campaign against the airline would be anti-competitive and that the organisers would face immediate court action.

The ITAA said it would pursue "other courses of action" to defend its members' interests, but could not specify what these might be. It has requested a meeting with the Minister for Transport, Energy and Communications, Mr Dukes, to discuss the issue.

Last night's move represents the first time that the authority has formally threatened to take legal action since it was given new powers last year. It is understood that the agency gave the ITAA until 5 yesterday to respond to its letter.

Earlier this month, the ITAA said that its members would not sell Ryanair tickets from May 1st, because the airline planned to cut the commission paid to travel agents for ticket sales from 9 per cent to 7.5 per cent. However, the airline had refused to back down, with its chief executive, Mr Michael O'Leary, stressing that although the commission being offered was lower the increased volume would mean that the travel agents did not lose out.

In a terse statement, the agency said that the ITAA had agreed to withdraw its threat not to sell Ryanair tickets.

"The ITAA had also written ask ing members to hand over their Ryanair plates, which are needed to issue Ryanair tickets, and had proposed to collect the plate the Competition Authority said.

"The authority is of the view that an agreement by independent undertakings, such as the member firms of the ITAA, to act together to maintain a uniform level of commission by threatening not to sell Ryanair tickets is a breach of the Competition Acts," the statement continued.

As if to ensure that there could be no misunderstanding, the authority added that it also considered that any other decision by the ITAA to organise such a concerted action would be against the law.

"The authority further informed the ITAA that if any form of de facto boycott resulted from the actions of the ITAA to date, the authority would consider that to constitute a breach of the Acts by the ITAA in respect of which the authority would take enforcement proceedings," the statement said.

The directness and forcefulness of the move shows the change in the role of the Competition Authority since it was revamped and given new powers in July. Before the date it was restricted to approving agreements between companies where one party had referred an issue to its offices.

Its job now is to enforce the Competition Acts. This means that it can act on complaints received from any company, members of the public, 01 even on its own initiative. It has the power to investigate any aspect of commercial life it believes may be anti-competitive, and to issue civil or criminal court procedures against those it believes are in breach of the law.

Earlier this year, it intervened without the threat of legal action, to change an advertisement for Opel cars. The original advert implied that all Opel dealers would sell the cars at the same price, which the authority suggested might breach the law.

It also investigated a claim that National Lottery agents were being told that they could not sell national lottery tickets, but found this not to be the case.

In January, after a controversy arose about the price of a pint of stout and beer, the authority said it would carry out a general study of the licensing laws to test their competitiveness.

The ITTA's president, Mr P J Brennan, said last night he was "extremely disappointed" by the competition Authority's stance. The commission cut would reduce travel agents earnings by 17 per cent, he added.

"It would be our opinion that it is Ryanair who are in breach of the requirements of fairness in attempting to force travel agents to accept this unilateral cut in commission," he said.