The Office of Fair Trading in Britain has begun a merger investigation into Ryanair's minority stake in Aer Lingus, prompting a scathing response from the no-frills airline.
The OFT said it was investigating whether Ryanair's near 30 per cent holding in its rival gave it the power to influence Aer Lingus's commercial policy and hampered competition.
The investigation follows confirmation by the European Union General Court earlier this year that, while the EU Merger Regulation does not give the European Commission power to address minority shareholdings, individual Member States remain free to apply their national competition law to Ryanair’s shareholding.
Aer Lingus welcomed today’s announcement by the OFT and said it would fully co-operate with the investigation.
Ryanair, which made its first failed bid to take over Aer Lingus in 2006, said the query was "out of time" and the OFT no longer had jurisdiction over the matter.
The airline said the European Commission and the European Courts had already ruled that it did not exert control over Aer Lingus.
"We have asked our lawyers to liaise directly with the OFT to bring this out of time and unnecessary query to an early conclusion. Ryanair also calls on the OFT to close these queries without delay," chief executive Michael O'Leary said in a statement.
The European Commission prohibited Ryanair from trying to take over Aer Lingus in 2007. In July 2010, the European courts ruled that the EC did not have the ability to force Ryanair to divest its minority stake in Aer Lingus because it did not confer "decisive influence".
"Given the termination of the European Commission investigation and related litigation, the OFT is now considering the acquisition," the OFT said in a statement.
A decision in the probe is expected on December 24th, 2010.