A federal court has ruled that the Federal Trade Commission overstopped its authority in challenging the manner in which airline schedules are published in the widely-used "Official Airline Guide - North American Edition."
In a decision his week, U.S. District Judge Bernard Decker, for the Northern District of Illinois, ruled that the case was "beyond and in excess of the jurisdiction" of the FTC and ordered a halt to the agency hearings now taking place.
The judge ruled that the FTC lacks the authority to take up questions involving "competition" in the airline industry.
Daniel C. Schwartz,deputy director of the FTC's Bureau of Competition, said yesterday the commissionwas studying the decision and has not decided whether to appeal.
In a complaint issued last year, the FTC charged that the way in which airline schedules are published in the OAG restrains competition in the industry to the disadvantage of the smaller commuter and instrastate carriers.
As the only publication combining the flight schedules and fares of all the scheduled airlines in the U.S. the OAG is the standard references work for travel agencies airlimes ticket offices, businesses and the general public in planning domestic trips.
The OAG published by The Reuben H. Donnelly Corp., lists the direct flights of the federally-certified airlines, then connecting flights, then direct flights of instrastate carriers, and then the direct flights of commuter airlines. The instrstate and commuter airlines are not subject to Civil Aeronautics Board rate and route regulation.
The company has refused to publish schedules of connecting flights of commuter air carriers and has been unwilling to publish the direct flight schedules of the commuter and instrastate operators on the same terms and conditions" as the certificated carriers, the FTC alleged.
The OAG practices restrain competition between certificated carriers and commuter and instrastate airlines, the FTC alleged, and reflect the views of the established carrier members of the Air Traffic Conference of America.
Lawyers for OAG were unsuccessful in persuading the FTC administrative law judge hearing the case that it was outside the scope of the FTC's jurisdiction. They sought to halt the proceedings in federal court in Illinois, the state in which Rueben Donnelly is based.
Judge Decker agreed with them that Congress had given to the Civil Aeronautics Board jurisdiction over competition among air carriers and that the FTC had no authority on the subject.
Although a sectio of the FTC act bars the commission from taking action against "air carriers and foreign air carrier" - and Donnelly is not an air carriers - the judge ruled that the wording of the act excludes the competition among air carriers from the FTC's authority.
The judge concluded that the CAB might not have any jurisdiction over the OAG publisher either, since it isnot an air carrier.