Yesterday’s judgment from the Competition Appeal Tribunal in London backs the British Office of Fair Trading’s (OFT) decision to investigate Ryanair’s 30% holding in Aer Lingus four years after the share purchase was completed.
Ryanair had argued the watchdog waited too long to start the probe.
The regulator began the investigation in October, saying it must examine if Ryanair’s Aer Lingus stake gives it “material influence” over a competitor’s commercial policy in a way that could lessen competition and raise prices for customers.
Ryanair sued in January to block the investigation.
After buying the stake in 2006, Ryanair mounted a public bid for the rest of Aer Lingus. In June 2007, the European Commission blocked the takeover.
Ryanair said it would appeal the decision.
Ryanair spokesman Stephen McNamara said the ruling “throws UK merger control regulation into disarray”.
“Now, instead of the certainty that the OFT must act within four months of a European Commission decision, it appears that the OFT can wait for up to nine years.”
Angus Coulter, a competition lawyer at Hogan Lovells, said the ruling was an “immediate win” for the fair trading office.
“The question about when the OFT should have stepped in has been answered, despite the OFT bending over backwards to avoid conflict with the EU and waiting four years to step in, the judgment confirms that they were right to wait,” Mr Coulter said.
“Ryanair argued that it needs more certainty than that — but this has fallen on deaf ears.”
Aer Lingus also appealed, challenging the commission’s decision not to force Ryanair to divest its minority holding.
In July 2010, the European General Court ruled the Brussels-based regulator couldn’t force a divestment when a minority stake doesn’t give “decisive influence” over a company.
The “commission blocked the Ryanair takeover of Aer Lingus more than four years ago, therefore it is incomprehensible that they have been allowed to remain on our share register,” Aer Lingus said.