Competition policy also includes law on mergers. .
The BA and American Airlines proposed to be merged in 1996 . The combined group would take a dominating 60% share of the lucrative transatlantic flight route between USA and London. However shortly announcing their deal the BA - AA merger became a good example of how Government intervention could pervasively influence the development in this industry. The OFT said that there would be a loss of actual competition of 6 transatlantic routes by the two airlines and there would be also a wider loss of competition on the wider UK/US market for price sensitive passengers . The signing of an open skies' treaty between UK and US governments - a prerequisite to clear the way for BA & AA to effectively combine their transatlantic routes was strongly opposed by 6 major US base carriers arguing that it was planning to use BA- AA merger to restrict competition. Similar claims were made to UK government by Virgin Atlantic - a BA competitor. These factors have partly led to the failure of the merger.
Since the UK joined EEC (Economics European Community) which is now European Union (EU), EU has played an important role in British life. Law that created within the frame work of EU will be as much as a part of English law as that made by Westminster Parliament and the British Court. Competition policy plays an important role in the work of EU. It is the responsibility of Directorate General IV (DG IV), Competition Commission of European Community. The principal of EU legislation is contained in Article 85 and 86 of the Treaty of Rome. .
Regarding BA/ AA merger, in July 1998 European Commission published its draft alliance remedies on the proposed merger between BA and AA. The draft said that it intended to approve the merger provided that certain conditions are fulfilled such as the two airlines must give up 267 weekly slots at Heathrow and Gatwick to its rivals reduce flights to Dallas, Miami and Chicago.