April 30, 2009 - EC DG COMP; U.S. DOT Regarding Antitrust Immunity


April 30, 2009

 

The Honorable Ray LaHood

Secretary

U.S. Department of Transportation

1200 New Jersey Ave. SE

Washington, DC 20590

 

Ms. Neelie Kroes

European Commissioner for Competition

European Commission

B-1049 Brussels

Belgium

 

Copy: Linsey McCallum, Head of Unit, Antitrust: Transport and Post, Directorate General for Competition

Eric Himpton Holder, Jr., Attorney General of the United States

Donna Kooperstein, Chief of Transportation, Energy and Agriculture, U.S. Department of Justice

 

Dear Secretary LaHood and Commissioner Kroes

We the undersigned write to you with great concern about the pernicious consequences for the public interest associated with the unnecessarily broad scope of the antitrust immunity granted to Continental Airlines and the Star Alliance, as announced by the U.S. Department of Transportation (DOT) on April 7, 2009. We represent corporations in the U.S., Europe and from around the world that annually purchase billions of dollars and euros of commercial air transportation services. The terms and conditions of these purchase agreements, reached through parity at the negotiating table, will have been put at great risk with this overly expansive antitrust immunity as provisionally approved.

This immunity gives the Star Alliance legal impunity to act as a group and the latent right to threaten a corporation that unless it accepts, for example, a joint airline proposal for transatlantic purchases, then immunized members of the alliance will refuse to do business with it. A collective refusal to deal, especially between a group of suppliers and a customer, is usually considered an illegal group boycott, but the immunity granted Continental-Star would completely shield members from being sued by corporations and the U.S. Department of Justice.

The implication for a corporation arising from an inability to negotiate with individual alliance members is significantly higher prices and fewer contractual benefits as the alliance would know the corporation would have few, and in some cases, virtually no options should it not agree to the terms and conditions of the deal offered. What corporation would want to be told by United, Continental, Air Canada and Lufthansa that they have no choice but to do a combined deal with all four for transatlantic service if it wants to have a discount on any of them?

What we seek is language that unequivocally states that it is the prerogative of the corporate buyer, and only the corporate buyer, to request a joint proposal from the Star Alliance. This modification should likewise be applied to past and future grants of antitrust immunity to airline alliances. A delegation of corporate travel buyers is available to visit with your staffs to explain in more detail, exactly what the corporation -- airline negotiating process comprises and why the existing antitrust immunity language is potentially highly injurious to corporations that purchase air transportation services.

Sincerely,

Institute of Travel & Meetings

Business Travel Coalition

Consumer Travel Alliance

The Travel Team, Inc. 

AutoNation, Inc.          

Deutsche Bank AG    

SEB AG

UCB Pharma     

NetApp             

Inter IKEA Group        

Arcandor AG 

SAS Autosystemtechnik Verwaltungs GmbH           

Graphic Packaging International, Inc. 

Constellation Brands, Inc.

IKEA   

Adidas

Tanger Factory Outlet Centers, Inc.   

Lowe's Companies, Inc.         

Grant Thornton LLP      

TCP, Inc.         

MIT Lincoln Laboratory           

Anthony Travel          

Boscov's Business Travel     

Caldwell Travel, Inc.   

Richcreek Vacation Center    

CI Travel         

John Proctor Travel    

Accent On Travel       

Suburban Travel        

Willett Travel   

Turon Travel, Inc.       

Cresta World Travel   

Eton Travel Agency Ltd                                  

LVMH Travel  

All Seasons Travel

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