Budget carrier Ryanair has vowed to appeal after Italian competition regulators imposed a fine of €256 million ($302 million) on the airline, accusing it of exploiting a dominant market position.
The regulator, AGCM, states that the carrier implemented an “abusive strategy” to hamper travel agencies relying on Ryanair flights.
It adds that the process began in April 2023 and continued “at least” for two years.
Ryanair’s large market share of 38-40% of passengers to and from Italy have given it substantial power, the regulator states.
“Following a complex investigation, the [competition authority] found that Ryanair put in place an elaborate strategy affecting the ability of online and traditional travel agencies to purchase Ryanair flights [the airline’s own website],” it says.
This strategy “blocked, hindered or made such purchases more difficult [or] economically or technically burdensome” when combined with other companies’ services.
According to the regulator, Ryanair had been looking into such measures since the end of 2022 and the plans “intensified” after they were put into place.
Ryanair implemented facial-recognition procedures on its website, aimed at users who purchased their ticket through a travel agency, the regulator says.
The airline then blocked booking attempts by travel agencies on its website, and then moved to introducing partnership agreements with travel agencies which restricted them from offering Ryanair flights in combination with other services.
While Ryanair took steps to restore effective competition in April this year, says the regulator, by enabling integration of IT applications, the previous situation “weakened competition” from travel agencies.
Ryanair says it will “immediately appeal”, describing the regulator’s decision as “bizarre”.
It argues that a court in Milan last year ruled that Ryanair’s distribution model benefits consumers and leads to competitive fares.
The carrier says the competition regulator’s decision and fine are “legally unsound”, and claims it has been made under pressure from a small number of agencies.
Ryanair says the regulator is “gerrymandering” the market situation, to make the airline appear more dominant, by excluding long-haul travel and short-haul access to certain other countries.
Chief executive Michael O’Leary says the carrier has “fought for many years for transparent pricing” and its approved online travel agency agreements are “manifestly and clearly pro-consumer”.
He adds that, if the regulator’s ruling is not appealed, then it puts the regulator in a position superior to the Milan court system in reaching competition decisions – a situation which O’Leary describes as “an affront to consumer protection and competition law”.
