US DoJ Gets Tough On Anti-Trust

The US Department of Justice is finally waking up from a long slumber and wasting no time in putting some teeth into the enforcement of anti-Trust legislation.

First up - they are likely to deny the merger between NASDAQ and NYSE Eurnext. Next they are likely to deny the AT&T/T-Mobile merger.

What does this mean in travel?

There are 3 major issues on the table today.

First Google - there is now strong evidence that Google will be the target and eventual recipient of stringent anti-Trust measures. It has already paid fines for bad behavior - such as criminal charges related to the Pharma ads issue, This will have big issues going forward for hotels and air activity

Second - GDS behavior. With the protagonists agreeing to a time out for 3-4 months - this moves the Justice Dept's investigation into a common time line with the various lawsuits. With Travelport looking to address its financial woes - a GDS merger is decidedly off the table.

Third for any additional airline merger - the DoJ is going to pour cold water on that. By now any assessment of the situation will see that pricing power has returned to the airlines driven by scarce supply. Thus any additional airline merger type activity will not be viewed favorably in my opinion. that said - the DoJ and the DoT clashed several times on this subject and the DoT won.

Bottom line here folks... be careful what you wish for...

Cheers

DOJ nabs guilt pleas from 5 more airlines nets $504 million

Nearly doubling the fines it had levied on bad airline behaviour in coluding on cargo rates earlier this decade, the US DOJ announced that 5 more airlines have now copped a plea.

In this latest round AF-KL Group comes out as the bad guys. Of the 5 airlines named and shamed (and fined) they paid the lion's share of the fines $350 Million for Air France, KLM and Martinair. The balance of the fines came from 2 other airlines - Cathay Pacific and SAS.

The airlines also agreed to cooperate with the DoJ which would indicate that there are more guilty parties waiting to be caught and fined. Whether one of them will end up in jail like the Qantas man remains to be seen. For sure there is likely to be some civil suits filed once the criminal cases are all done.

So the US Government was funding part of today's fight in Iraq courtesy of some foreign airlines. I am sure there is a moral in here somewhere.

Cheers

Timothy