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The Crown stated that the mitigation measures were "ineffective, insufficient, subject to interpretation, difficult to control, and could even distort affected markets."
The National Economic Prosecutor's Office (FNE) has decided to go to the Supreme Court to revoke the decision of the Tribunal for the Defense of Free Competition (TDLC) that approved the merger of Latam Airlines with American Airlines and IAG.
The agency based this determination by challenging the measures with severity. of the nine-point mitigation established by the TDLC when it gave the green light to this operation, indicating yesterday that they were "ineffective, insufficient, susceptible to interpretations, difficult to control and even that they could distort the affected markets. "
On October 31st, the Defense Tribunal for Free Competition (TDLC) cleared a signed Joint Commercial Agreement (JBA) signed by Latam Airlines with American Airlines and the IAG Group (British Airways and Iberia) in January 2016. For its implementation, it applied conditions such as an income distribution formula and the non-collection of implicit negative prices on indirect routes. The Santiago-Miami and Santiago-Madrid flights constitute the main section
In this regard, the Public Ministry criticized the action of the TDLC, stressing that, although it had recognized in its resolution that "the risks arising from the agreements consulted outweigh its benefits "" Finally, it decided to approve the merger of the links, by setting mitigation measures which "would have as main objective the restoration, to the full extent of the possible, conditions of competition prior to the realization of the JBA consulted. "
On the contrary, the Office of the Prosecutor maintained that this operation constitutes an agreement between competitors who" can agree on issues such as the schedules , pricing, sales strategies and capacity, among others. ros. "The parties would cease to behave as independent economic agents on the routes where the JBAs have effects, with consequences equivalent to those of a merger, but without the efficiencies and savings that the 39, we could expect a merger, "explained the FNE.
Therefore, the Office of the Prosecutor asked the Supreme Court" to revoke the resolution appealed and to prohibit the materialization of the JBAs consulted, as they were contrary to the rules governing free competition and did not constitute the actual measures adopted, either sufficient or sufficient. ""
Issues in Question
Among its fundamental principles, the Office of the Prosecutor recalled that the TDLC had stated, with regard to the implementation of JBAs, that the risks arising from the agreements consulted exceeded their benefits. That is why, despite the determination to approve the merger of the bonds, the agency said that "it does not share the TDLC standard for the purpose of the measures because the measures of mitigation must actually eliminate the detected problem, in order to fully restore competition in a relevant market. "
Airlines have not appealed the decision relating to the 39, integration of a road
Latam Airlines announced yesterday that it had not appealed the decision of the Court of Defense of Chile's Free Competition (TDLC), which approved the Joint Commercial Agreements (JBA) with American Airlines and International Airlines Group (IAG, British Airways and Iberia), respectively. Enrique Cueto, CEO of the company, explained that "our priority is to be able to offer the benefits that this type of agreement will bring to the pbadengers as soon as possible". He added that "JBAs exist all over the world, have been approved by different authorities and attest to the real benefits that they offer in terms of more flight options, nonstop destinations, better connections and cheaper prices ".
The company argues that this type of agreement is concluded worldwide: 35% of long-haul flights are operated under JBA and are present in 20 countries. In addition, he points out that in the United States. the flights operated under this system "account for nearly 60% of international pbadenger traffic, and there is already a JBA between this country and Mexico, while the major airlines in the region are working on agreements of this type".
not only did Latam Airlines make the decision not to address the Supreme because American Airlines said it would appeal no appeal and accepted the decision.
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