§ Mr. Hirstasked the Secretary of State for Trade and Industry, in the light of the recently announced provisional 624W settlement of the class action relating to the collapse of Laker Airways, what is the Government's policy towards the application of the United States anti-trust laws to civil aviation.
§ Mr. BrittanThe Government have consistently maintained the view that in so far as the activities of airlines are authorised and regulated in accordance with an air services agreement, the domestic laws of a contracting party may not be used to constrain or regulate those activities, unless that is provided for expressly , or is necessary in order to implement the agreement, or the laws can be applied in a manner which is compatible with the agreement. Regulation under the agreement by the contracting parties jointly of matters such as market access, capacity and tariffs necessarily displaces the unilateral application of the domestic competition laws of each party which implements the national economic philosophy of each country and are not designed to deal with the special characteristics and needs of international civil aviation.
In particular, the Government's view is that the unilateral application of United States anti-trust law to air services operated under the United Kingdom-United States air services agreement (Bermuda 2) is not only incompatible with the United Kingdom's rights under the agreement, but is damaging to the trading interests of the United Kingdom. In 1983 the then Secretary of State for Trade and Industry exercised his powers under the Protection of Trading Interests Act 1980 to prohibit compliance by persons carrying on business in the United Kingdom with requirements for the enforcement of United States anti-trust laws in relation to activities of United Kingdom airlines and concerning the operation of air services under Bermuda 2.
Our policy is unchanged, and I therefore intend to exercise powers unde that Act to whatever extent is necessary if proceedings under the anti-trust laws were to be begun in the future in United States courts against any United Kingdom airline in relation to air services operated by it under Bermuda 2, and would not envisage consenting to requests to comply with discovery orders made by United States courts in such cases.
While maintaining this position, the Government's longer-term objective is to reach mutually acceptable arrangements as appropriate with foreign Governments to deal with anti competitive behaviour by airlines. As a first step we have indicated to the United States Government that we are ready to discuss these issues with them.