Jet Blue and American Airlines Guilty in Antitrust Suit, Despite No Clear Harm to Consumers
American Airlines and Jet Blue violated the Sherman Antitrust Act of 1890, a federal appeals court said, by sharing revenue and coordinating service for Boston Logan, JFK, LaGuardia, and Newark Liberty airports. In his opinion, Appellate Judge William Kayatta Jr. wrote that proof of “anticompetitive harm matters not at all in this case,” apparently giving no consideration to whether anyone was actually hurt by the airlines’ actions.
The First Circuit Court of Appeals upheld Massachusetts District Judge Leo Sorokin’s decision in U.S. v. American Airlines on Friday. The case revolved around a September 2021 complaint from the Department of Justice (DOJ) against the Northeast Alliance (NEA) between American Airlines and Jet Blue. The complaint alleged that the NEA, which took effect in February 2021, violated Section 1 of the Sherman Act by “effectively merging their operations in Boston and New York City and eliminating competition.”
Though interpretations of the Sherman Act are contentious, consideration of consumers in an antitrust case should not be. Under President Joe Biden’s antitrust regime, undue consideration has been paid to competition per se instead of whether coordination between firms actually hurts consumers.
Harm to consumers is still the complaint’s stated motivation: The DOJ sued American Airlines and Jet Blue “to prevent hundreds of millions of dollars in harm to consumers that will occur if these two rivals are permitted to maintain this modern-day version of a nineteenth-century business trust,” per its complaint.
American Airlines and Jet Blue filed a motion to dismiss in November 2021, claiming the DOJ failed to plead market power, which “requires a showing that Defendants can raise price by restricting output.” Sorokin denied this motion, affirming that “n
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