Investigation into alleged boycott of Budget Travel

January 1, 2007

Outcome of investigation

The Competition Authority (“the Authority”) started an investigation in January 2005 into an alleged boycott by travel agents of Budget Travel products in response to Budget Travel’s decision to reduce travel agent commissions.

The Authority closed the case in 2007, having received undertakings from the parties concerned that addressed the competition concerns.

Outline of case

The Authority has secured undertakings from Travelsavers Educational and Marketing Services Limited (“TEAMS”) that the company and its employees will comply with the provisions of competition law. These undertakings have been secured by the Authority on foot of an investigation, commenced in January 2005, into an alleged boycott by travel agents of Budget Travel products in response to Budget Travel’s decision to reduce the commission it paid to travel agents. The parties to the alleged boycott were all independent travel agent members of TEAMS.

To counteract the adverse effects of dropping its commission, Budget Travel undertook an aggressive advertising campaign in January 2005. As a consequence TEAMS’ recommendation had at most a neutral effect on Budget Travel’s business. (Budget Travel has since discontinued selling its products through independent travel agents.)

The evidence gathered by the Authority in its investigation showed that the cited actions of TEAMS had been co-ordinated by a director of the company on his own initiative and without the knowledge of the parent company. (This fact was attested to in the course of separate High Court proceedings unrelated to the Authority’s investigation.)

On the basis that TEAMS had taken measures to address the behaviour uncovered by the Authority’s investigation, the Authority agreed to accept undertakings from the company that address its concerns to resolve matters. The undertakings provided to the Authority provide that TEAMS will not engage in similar conduct again and TEAMS has written to its members informing them of each member’s obligations under the Competition Act.

It is important to note that TEAMS could be held liable for the actions of its director under Irish Competition Law, even though they were not aware of his actions on the basis that he was acting within the scope of his employment with TEAMS.