On August 15, 2019, the American Antitrust Institute (AAI) commented in response to the U.S. Department of Transportation’s (DOT) Order to Show Cause in the SkyTeam’s latest request for expanded antitrust immunity on transatlantic routes. The order in docket DOT-OST-2013-0068 proposes to grant the request for antitrust immunity. The grant of immunity would allow SkyTeam to coordinate freely on pricing and other key metrics that directly affect competition and consumers.
“Consumers, businesses, legislators, policymakers, and other stakeholders should be very concerned by the DOT’s Order to Show Cause in the SkyTeam immunity proceeding. It fails to respond to important competition and consumer issues raised by advocacy groups,” said AAI President Diana Moss. “An open, transparent, on-the-record, advocacy proceeding is the major channel through which the public can express its concerns to U.S. sector regulators as they deliberate on key legal and policy issues.”
AAI’s comments explain that the DOT’s Order to Show Cause fails to recognize the implications of highly concentrated transatlantic alliance markets, ignores recent economic evidence on the adverse fare effects of immunity, and disregards other key arguments presented by AAI in earlier rounds of comments. These include the spillover effects of immunity on U.S. behind- or beyond-the gateway markets resulting from the growing dominance of U.S. carriers.
AAI’s comments are the third set filed in the SkyTeam immunity proceeding. In its initial round of comments, AAI made a strong case for why the DOT should carefully scrutinize arguments that antitrust immunity creates public benefits. AAI’s comments draw from analysis in a March 2018 White Paper that highlights the important linkage between antitrust immunity for the international airline alliances and consolidation in the U.S. airline industry.