Abstract

This article discusses the European Commission's decision to block the proposed acquisition by "Airtours", a UK package tour operator of "First Choice" a direct rival, because it would have created a collectively dominant position. This decision has already been discussed in a number of recent articles by leading antitrust experts as the proposed merger would not have created a duopoly, the product was differentiated rather than homogeneous and the market has traditionally been very dynamic, with substantial entry, expansion and exit taking place over time. The article mostly focuses on the stability of the collusive mechanism envisaged by the Commission and the size of the barriers to entry (and growth) in the market. These two issues are likely to play a major role in the forthcoming proceedings before the Court of First Instances, to whom Airtours has appealed.