To quote this paper: C. de Bodin de Galembert, “Collusive agreements in inter-island air transport markets: competition law concerns in structurally constrained sectors”, Competition Forum, 2026, n° 0080 https://competition-forum.com. 

Inter-island air connectivity constitutes a major structural issue in the Caribbean region, both for the mobility of local populations and for the economic and tourism development of the territories concerned. Owing to insularity, geographic fragmentation and the lack of credible alternatives to air transport, these markets are characterised by a high degree of concentration, largely captive demand and the persistent economic fragility of operators. These specific features have repeatedly led regional airlines to invoke the need for forms of agreement in order to preserve the viability of their activities, particularly during periods of heightened competitive pressure.

It is against this background that Decision No. 24-D-10 of 4 December 2024 was adopted, by which the French Competition Authority imposed sanctions on several undertakings active in inter-island passenger air transport in the Caribbean for particularly serious anticompetitive practices. This decision illustrates the manner in which the Authority approaches, under competition law, collusive agreements implemented in structurally constrained markets.

The case originated in autumn 2017, when the Authority’s General Rapporteur identified a sudden and simultaneous increase in fares on the Pointe-à-Pitre–Fort-de-France route, implemented by Air Antilles and Air Caraïbes. This development prompted the opening of ex officio proceeding, accompanied by dawn raids. The investigation revealed a series of successive anticompetitive agreements involving the main airlines concerned, namely Compagnie Aérienne Inter Régionale Express (hereinafter “CAIRE”, operating under the trade name Air Antilles), Air Caraïbes, and Miles Plus. These agreements, depending on the period, related to price-fixing, tariff arrangements, capacity limitations, allocation of time slots, and non-aggression arrangements aimed at durably stabilising the undertakings’ competitive positions.

The Authority assessed these practices under both Article L.420-1 of the French Commercial Code and Article 101 TFEU, given their appreciable effect on trade between Member States, the routes concerned being inherently cross-border in nature. While several undertakings applied for the settlement procedure, one contested the objections, arguing in particular that the practices were necessary to put an end to an economically destructive price war.

Against this background, the Authority had to examine two main issues. First, it needed to determine whether price-fixing agreements, tariff arrangements, and coordinated capacity in a highly concentrated and economically fragile market constituted restrictions of competition by object. Second, it had to assess whether these practices could benefit from an exemption, on the grounds that they allegedly prevented market foreclosure and the emergence of a monopoly.

The Authority classified all of the practices at issue as horizontal restrictions by object. It rejected any possibility of exemption under Article 101(3) TFEU and Article L.420-4 of the French Commercial Code. Liability for the infringements was attributed to the parent companies, based on the decisive influence they exercised over their subsidiaries. Finally, the Authority imposed financial penalties, taking into account the seriousness of the infringements, the use of the settlement procedure, and the contributive capacity of the undertakings concerned.

Accordingly, this decision calls for an analysis, on the one hand, of the strict qualification of the practices as restrictions by object and the rejection of any justification based on the alleged economic necessity of bringing an end to a price war in a structurally concentrated market (I) and, on the other hand, of the lessons it provides regarding the attribution of anticompetitive conduct and the individualisation of fines under French competition law (II).

I. The strict qualification of horizontal agreements as restrictions by object, despite a context of price wars

Confronted with arguments based on the economic fragility of a strained air transport sector, the French Competition Authority adopted a resolutely rigorous stance. Rather than yielding to the crisis context invoked by the undertakings concerned, it articulated a two-step analysis: first, the automatic characterisation of the conduct as a restriction of competition by object (A); second, the categorical rejection of any exemption grounded in the alleged need to put an end to “ruinous competition” (B).

A. Characterisation of the conduct as restrictions of competition by object

The Authority firmly anchors its reasoning in the classical framework of Article 101(1) TFEU and Article L.420-1 of the Commercial Code, recalling that the concept of an agreement encompasses any form of agreement between competitors reflecting a common intention to behave on the market in a particular manner, regardless of formalisation[1].

In line with settled case law, the Authority accepts that the existence of such practices may be established on the basis of a body of serious, precise and consistent indicia, even where the documentary evidence appears fragmentary or indirect[2]. In the present case, internal exchanges, emails, sometimes anonymised, and minutes of meetings demonstrate that the undertakings concerned repeatedly devised and implemented strategies relating both to capacity reductions and slot allocation, as well as to price setting and tariff conditions. These elements unequivocally establish the existence of successive agreements reflecting a concurrence of wills.

The central interest of the decision lies, however, less in the demonstration of the existence of the agreements than in their systematic classification as restrictions of competition by object. The Authority recalls in this respect that agreements aimed at fixing prices, limiting capacity or allocating markets constitute, by their very nature, the most harmful forms of inter-competitor agreements for the competitive process and do not require any assessment of their concrete effects on the market[3].

Here, the practices explicitly sought to put an end to what the parties perceived as excessively aggressive competition between Air Antilles and Air Caraïbes, through an agreed reduction in supply, differentiation of time slots and stabilisation of fare levels. By freezing market shares and eliminating competitive pressure on prices, the agreements mechanically led to an increase in average ticket prices. The Authority further emphasises that the practices concerned inter-island routes constituting an essential mode of transport, in a duopolistic setting and to the detriment of a largely captive customer base, thereby aggravating their intrinsic harmfulness.

While the characterisation of the practices as restrictions by object is hardly surprising, it nonetheless deserves attention insofar as it reflects the Authority’s consistent and rigorous enforcement approach. Such an extensive use of the “by object” category has nevertheless been criticised, on the ground that an expansive interpretation of the notion tends, in practice, to blur the distinction between object and effect, thereby undermining the predictability and legal certainty required by economic operators.[4] In this respect, the decision does not mark any departure from established decisional practice but rather constitutes a further illustration thereof in a particularly sensitive sector.

Ultimately, having regard to their nature, their object and the economic context in which they were implemented, the Authority finds that all the impugned practices display a sufficient degree of harm to be classified as restrictions of competition by object within the meaning of Article 101(1) TFEU and Article L.420-1 of the Commercial Code, without it being necessary to examine their effects.

This strict approach to the characterisation of the conduct logically leads the Authority to scrutinise, without concession, any economic justifications advanced by the undertakings concerned.

B. Rejection of any exemption based on the termination of price war

The Authority’s long-standing refusal to take into account, at the exemption stage, economic justifications based on the alleged need to end a price war or preserve the viability of a market is clearly reaffirmed. In accordance with Article 101(3) TFEU and Article L.420-4 of the Commercial Code, the Authority recalls that restrictive practices may benefit from an exemption only if four cumulative conditions are satisfied: the existence of genuine economic progress, the indispensability of the restrictions, the passing-on of a fair share of the resulting benefit to consumers, and the absence of elimination of competition[5].

The burden of proof rests with the undertakings invoking the exemption[6]. In the present case, CAIRE argued that cooperation was necessary to end an economically destructive price war which would otherwise have resulted in the exit of one operator and the emergence of a monopoly. The Authority firmly rejected this argument, holding that an agreement designed artificially to maintain an operator in an overcapacity market cannot constitute economic progress.

This position is consistent with settled EU case law, according to which there is no meaningful distinction between “normal” and “ruinous” competition, as competition by its very nature may lead to the exit of less efficient operators[7]. The Court of Justice has further recalled that competition on the merits may legitimately result in the marginalisation or elimination of certain competitors, without justifying restrictive coordination[8].

That said, this strictly legal approach is not immune from criticism. This rigidity contrasts with earlier strands of EU decisional practice in which the Commission, in exceptional circumstances, appeared willing to take account of broader considerations linked to employment or industrial restructuring under Article 101(3) TFEU[9]. Although such precedents are now interpreted restrictively and would be unlikely to be replicated today, they nevertheless show that the exclusion of structural sustainability arguments reflects a deliberate choice in enforcement policy rather than an inherent feature of Article 101 TFEU. Economic analyses of competition policy in times of crisis have highlighted that, in structurally constrained markets marked by persistent overcapacity, a rigid exclusion of restructuring or survival considerations may produce socially costly outcomes[10]. From this perspective, limited and temporary horizontal agreements could, under strict conditions, contribute to preserving a sustainable competitive structure where the realistic alternative is the exit of an operator and the emergence of a monopoly.

EU case law nevertheless remains highly reluctant to endorse such an approach. Even in cases where undertakings invoked market stabilisation or sectoral survival objectives, the courts have consistently refused to recognise an exemption based on the prevention of a price war[11]. In this regard, settled case law confirms that an agreement may be classified as restrictive by object even where it does not pursue the sole aim of restricting competition, but also seeks to achieve other objectives presented as legitimate. The presence of such objectives is therefore irrelevant for the purposes of Article 101(1) TFEU[12].

Ultimately, while the solution adopted by the Authority appears legally rigorous and fully consistent with prevailing case law, it highlights the rigidity of the exemption framework when confronted with economically fragile markets. The decision thus confirms that, under positive law, justifications based on price wars or sectoral viability remain, save in exceptional circumstances, ineffective in neutralising the characterisation and sanctioning of horizontal restrictive agreements.

While the Authority’s strictness is first expressed in its refusal to excuse collusion on the basis of economic context, it is subsequently reinforced at the stage of identifying the addressees of the sanction. Once the “by object” infringement has been established, the analysis shifts from the market to the internal structures of corporate groups in order to delineate the scope of liability.

II. The comprehensive attribution of liability: ensuring effective sanctions

Once the infringement is established, the focus shifts to imputability. By mobilising the concept of the single economic unit, the Authority traces corporate links to ensure that sanctions are genuinely deterrent at group level (A), even at the cost of fuelling debate on the predictability of fines (B).

A. Attribution of the infringement: from capital-based presumption to de facto control

The criteria governing the attribution of infringements within corporate groups are clearly articulated, confirming an approach that is both rigorous and pragmatic. The fundamental principle reiterated by the Authority is that responsibility lies with the undertaking that committed the anticompetitive practices: Articles 101 and 102 TFEU and Articles L.420-1 and L.420-2 of the Commercial Code apply to the economic entity, irrespective of its legal form or financing arrangements[13]. This approach allows the Authority to move beyond formal legal structures in order to apprehend the operational reality of the undertaking on the market[14].

Within a group, case law recognises that the conduct of a subsidiary may be attributed to its parent company where the latter exercises decisive influence over its management, whether directly through shareholding or indirectly through economic and organisational links[15]. The Authority applies a presumption of capital-based control, which the parent company may rebut only by demonstrating the subsidiary’s autonomy[16].

The factual application to Air Caraïbes, Miles Plus and CAIRE illustrates the nuanced nature of attribution. Air Caraïbes, wholly owned by GDA and the Dubreuil Group, sees liability for the practices attributed jointly to the parent companies and the subsidiary. Miles Plus, held by natural persons, is held directly liable for its own conduct. CAIRE presents the most complex scenario: GAI, despite holding only a minority stake, is found to exercise decisive influence through the secondment of key executives, significant financial flows and strategic involvement resulting from agreements, thereby justifying the attribution of the practices to GAI and, by extension, to its parent company, K Finance.

While the accumulation of various factors to establish decisive influence is legally sound, it may generate a degree of uncertainty for complex corporate structures. Certain analyses highlighted that the multiplication of extra-capital criteria, although effective in uncovering de facto control, may undermine predictability and legal certainty for undertakings[17]. Nevertheless, the Authority endeavours to articulate evidence and presumptions in a rigorous manner, striking a balance between the requirements of accountability and economic reality.

B. The level of the fine : between deterrence and economic reality

The imposition of pecuniary sanctions[18] combines proportionality, deterrence and individual attribution. The Authority adjusts the level of the fine not only by reference to the gravity and duration of the infringement, but also in light of the undertakings’ actual financial capacity. Thus, certain economically fragile entities, such as Miles Plus, benefited from a reduction in the fine to reflect their financial difficulties, while pecuniary liability was transferred to the parent company where necessary to preserve the deterrent effect, as in the case of CAIRE and GAI. This approach illustrates the Authority’s concrete dilemma: how to punish effectively without jeopardising already fragile economic actors.

The Authority relies on a cumulative assessment of factors, like financial flows or internal agreements, to determine both decisive influence and the appropriate level of the fine. While this method ensures deterrence, it introduces a genuine degree of uncertainty for undertakings, which are unable to anticipate precisely their financial exposure. As Michel Debroux rightly observes, transparency in the sanctioning process does not guarantee predictability of the fine, such that decisions may appear “opaque” from the perspective of economic operators[19]. In the present case, the cumulative nature of the criteria enables the sanctioning of GAI and K Finance despite minority shareholding but creates an environment in which undertakings must infer how their internal structures will influence the penalty imposed.

The transfer of liability to the parent company where a subsidiary is unable to pay vividly illustrates the Authority’s approach to ensuring deterrence. By doing so, it prevents anticompetitive practices from going unsanctioned. However, this solution raises questions of predictability and legal certainty, particularly for complex groups. As Debroux notes, uncertainty itself is a tool of deterrence, but it must remain controlled so as not to undermine economic rationality[20].

Finally, the decision underscores the critical importance of internal documentation. The Authority bases the calculation of the fine on a combination of internal evidence, without specifying the precise weight attributed to each criterion. For Air Caraïbes and CAIRE, this implies that deficient internal structuring or documentation may increase financial risk, reinforcing the role of compliance as a tool of legal risk prevention.

In sum, the decision illustrates how the Authority seeks to strike a concrete balance between maximum deterrence and the economic reality of sanctioned undertakings. Academic commentary provides a valuable conceptual framework for understanding this tension of “transparent unpredictability”[21], which generates an inevitable degree of uncertainty, particularly for economically fragile or structurally complex groups.

Clémentine de Bodin de Galembert

[1] ECJ, 23 November 2006, Asnef-Equifax, Case C-238/05, para. 32

[2] ECJ, 7 January 2004, Aalborg Portland and Others v Commission, Cases C-204/00 et al., paras 55–57; Paris Court of Appeal, 26 January 2012, Beauté Prestige, No 10-23945, p. 46

[3] ECJ, 11 September 2014, Groupement des cartes bancaires (CB) v Commission, Case C-67/13, paras 49–50; ECJ, 20 January 2016, Toshiba Corporation v Commission, Case C-373/14, para. 28; Siemens, Cases C-239/11 P and C-489/11 P, para. 218

[4] C. Grynfogel, La notion d’ objet anticoncurrentiel et la sécurité juridique des entreprises : RJDA 8-9/14, p. 627 ; L. Idot, Prise de position de la Cour de justice des Communautés européennes sur la notion d’« accord ayant un objet anticoncurrentiel », RDC 2009 p. 113

[5] Decision No 12-D-08 of 6 March 2012, Endives, para. 559; see also ECJ, 17 January 1984, VBVB and VBBB v Commission, Cases 43/82 and 63/82

[6] ECJ, 6 October 2009, GlaxoSmithKline, Case C-501/06 P, para. 82; Paris Court of Appeal, 14 December 2011, Compagnie Emirates

[7] General Court, 21 February 1995, SPO, Case T-29/92, para. 294

[8] ECJ, Intel v Commission, 6 September 2017, Case C-413/14 P, para. 134

[9] E. Dieny, Fasc. 550 : ENTENTES. – Exemption individuelle. – Article 101, [sect] 3 du TFUE, 25 juillet 2023

[10] A. Perrot, Politique de la concurrence et faillites bancaires, Revue Lamy de la concurrence, Nº 20, 1er juillet 2009

[11] CJCE, Beef Industry, 20 novembre 2008, C-209/07, p.21. Same in French case law : Autorité de la concurrence, Decision No 15-D-19, Express parcel services

[12] Consten and Grundig v Commission, Joined Cases 56/64 and 58/64; IAZ and Others v Commission, para. 25; Montecatini v Commission, para. 122; Limburgse Vinyl Maatschappij and Others v Commission, para. 491

[13] ECJ, 28 June 2005, Dansk Rørindustri and Others v Commission, Case C-189/02 P et al., para. 112; ECJ, 10 January 2006, Ministero dell’Economia e delle Finanze, Case C-222/04, para. 107

[14] ECJ, 14 December 2006, Confederación Española de Empresarios de Estaciones de Servicio, Case C-217/05, para. 40

[15] ECJ, Akzo Nobel and Others v Commission, Case C-97/08 P, para. 58; Paris Court of Appeal, 29 March 2012, Lacroix Signalisation, No 11/01228, p. 18

[16] ECJ, General Química and Others v Commission, Case C-90/09 P, paras 37–40; French Supreme Court, Commercial Chamber, 18 October 2017, No 16-19.120

[17] F. Marty, Le contrôle des concentrations en Europe et aux États-Unis. Critères économiques et sécurité juridique : Rev. OFCE 2007/1, n° 100, p89

[18] Article L.464-2 of the Commercial Code

[19] Concurrences No 4-2006, Doctrines, M. Debroux, La sanction des cartels, para. 43

[20] Concurrences No 4-2006, Doctrines, M. Debroux, La sanction des cartels, paras 36-44

[21] Concurrences No 4-2006, Doctrines, M. Debroux, La sanction des cartels, para. 7