Originally Posted by J.Edward
Correct me if I'm mistaken, but I think this was a requirement for regulators, both in the EU and US, to approve the AA/BA partner agreement. IIRC, authorities were concerned about monopolistic practices ex. LHR to the US by a partnership between BA/AA and therefore required they give up an significent number of LHR slots (60+?) or reduce the potency of the partnership. Not suprisinly, they opted for the latter over the former and as such dileuted FF benifits (as HeathrowGuy sights in his post) were a "weakened" component among others.
At no time has any government authority, on either side of the Atlantic, prohibited AA and BA from engaging in routine receiprocal frequent-flyer activities. The carriers implemented the restriction for commercial reasons - namely, to protect their respective premium traffic flows from poaching by the other airline.