Ryanair has lost a UK ruling to block Britain's antitrust regulator from investigating its minority stake in competitor Aer Lingus.
The judgment today from the Competition Appeal Tribunal in London backs the UK Office of Fair Trading's decision to investigate Ryanair's 30 per cent 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 probe 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. The European Commission in June 2007 blocked the takeover - a decision Ryanair failed to overturn in a European Union court.
Ryanair said it would appeal the decision.
The ruling "throws UK merger control regulation into disarray," Ryanair spokesman Stephen McNamara said today in a statement. "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."
Aer Lingus also appealed, challenging the commission's decision not to force Dublin-based 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 in a statement.
Bloomberg