Questioning the travel industry status quo, one blog post at a time

Archive for the ‘Antitrust’ Category

I am sure most everyone knows by now that just before the holidays a jury in the USAir v Sabre antitrust trial determined that certain provisions found in most GDS/airline distribution agreements were anti-competitive. These provisions – generally grouped together and labeled as “full content provisions” – include a full-content provision, a content-parity provision, a surcharge prohibition provision, and a direct-connect prohibition provision.

While the trial results will certainly take some time to play out in the market, one thing is for sure – airlines should be strategizing how they will use this anti-competitive determination to open up their market and distribution opportunities.  It is certainly going to be a once-in-a-long-lifetime of GDS contract provisions negotiation opportunity.

From my point of view, the trial was quite interesting on multiple fronts. So I thought I would share some observations regarding my first opportunity to testify in a jury trial.

As a non-expert witness, I could not actually attend any of the trial proceedings until after I testified. So my first glimpse into the trial was when I was escorted in through a back door and seated directly in the witness box, snuggled in nicely between the judge and the jurors.  No introductions, no handshakes, and no exchanging of pleasantries before getting down to business. In other words, this was not a business meeting that so many of us are accustomed to.  I was immediately sworn in, and then it was off to the races – pausing only momentarily for a sip of water or to look up a line or two from four large bound books (literally over 1,000 pages) of my previous multiple-year-old depositions. (In case you aren’t aware, I had three previous depositions as the Sabre lawyer attempted to, what is called in the legal business, “impeach me.” Yikes!)

A couple of observations:

  • Being a juror is hard work.  This was a very complex case and from what I could tell, the jurors were extremely engaged, attentive, and taking lots of notes.  At the end of my testimony (and that of others who were called to the witness box) the jurors were allowed to submit follow-up questions to the judge. After I testified, the lawyers and judge disappeared for a while,  after which the judge returned to  ask me five or six questions submitted by the jurors.  The questions were relevant, intelligent, and demonstrated the grasp that the jurors had on this case.  Quite amazing.
  • Look at who did and did not show up. An open court room doesn’t necessarily mean people actually show up to watch. I found this quite interesting. Here we were, at a trial that had significant impact on pretty much every airline in the world that is not happy with their GDS full content, parity provision, surcharge and direct connect prohibitions. Yet, not a single airline representative (other than AA) in the house.  What gives?  Lack of interest?  Didn’t know the trial was happening?  Figured you would read the transcripts?  Anyway, I thought this was quite interesting.

There was however one person that seemed intent on grasping all there was to grasp throughout the long weeks of trial – a GDS lawyer. Wonder what his motivation was?

Guess you’ll just have to Ask the Question!

It’s certainly no secret that while Farelogix doesn’t like to start fights, we seldom back away from a good one, especially one that threatens innovation, competition, or our business. It is also no secret that we have been embroiled in a number of airline/GDS lawsuits, a Department of Justice investigation into the possible antitrust activities of the GDSs, and a few rounds with the DOT. We, like many others, have the scars of ongoing business disruption and legal fees to show for it.

We continue to fight because we believe things are not right in the GDS-dominated indirect distribution channel and consumers, corporations, airlines, tech companies, and, yes, even travel agencies, are paying the price. With all the allegations and investigations going around, I wonder if the old saying is true: Where there is smoke, there’s fire.

In case you missed it, check out United States District Judge Terry R. Means’ Sealed (now unsealed) Order Denying Motions (by Travelport, Sabre, and Orbitz) to Dismiss the antitrust lawsuit filed by American Airlines. Not only may you find it an interesting read, you can judge for yourself whether there really is some fire here.

As always, your comments are welcome.