A dispute on airport charges at Riga airport has been brought before the Court of Justice of the EU. On 17 March 2016, the Latvian Supreme Court asked the Court of Justice whether this case concerns antitrust rules or whether it falls under State aid regulation.
The origin of the dispute dates back to February 2012 when the Latvian Competition Authority concluded that Riga airport did abuse its dominant position by charging much lower rates to Ryanair than to other airlines, and the Authority imposed a fine of EUR 71,431.
The airport appealed this decision before an administrative court and its main argument was that the contract with Ryanair could potentially involve illegal (but compatible) State aid, but no violation of antitrust rules. The airport held that it concluded the contract with Ryanair because of pressure from the Latvian State (the sole shareholder of the airport) and that, without the lower rates, it would have become insolvent. Moreover, according to the airport, the objectives of the agreement were of public interest.
The administrative court disagreed, which led to another appeal before the ‘Augstaka Tiesa’ (the Supreme Court of Latvia) where the airport argued that State aid provisions (articles 107 and 108 TFEU) need to be considered as lex specialis which override antitrust rules (articles 101 and 102 TFEU).
The Latvian Supreme Court found it difficult to decide on this matter and has now turned to Europe’s highest court for guidance. The prejudicial questions are the following:
- Can price discrimination fall under both antitrust and State aid rules?
- Is there some kind of hierarchy between both sets of rules?
- Is a national court allowed to decide on a possible violation of article 102 TFEU (abuse of dominant position) if this violation arises from a State aid measure and without conducting a prior state-aid analysis based on article 108 §3 TFEU?
As these two areas have their own procedures and rules, I am initially more inclined to think that both rules apply. On the other hand, it follows from jurisprudence that one cannot be held responsible for violations of competition rules which are the consequence of a governmental act or decision. It will be very interesting to see what the Court of Justice will decide as this decision will impact the way future similar cases will be handled EU-wide.
On a final interesting note, in January 2014, Riga airport lodged a complaint with the European Commission about the potentially illegal State aid. The investigation is still ongoing.
Hanne Baeyens
Associate, Brussels
(hanne.baeyens@cms-db.com)
Annabelle Lepièce
Partner, Brussels
(annabelle.lepiece@cms-db.com)
