Antitrust & Intellectual Property

Air Ticket Price Collusion

Allegation: Collusion in ticket pricing

Major U.S. Airlines in Litigation For Ticket Price-Fixing Conspiracy

Following a Justice Department into consistently high airline ticket prices despite the fact that oil and jet fuel prices plummeted 40% in recent years, multiple lawsuits were filed accusing the major U.S. airlines of acting as a price-fixing cartel in violation of both federal and state antitrust laws. These lawsuits have been grouped together by the Judicial Panel on Multidistrict Litigation.

In consolidating the cases, the JPML determined that all of the actions share factual questions arising out of allegations of a conspiracy by the airlines to fix prices for domestic tickets by keeping flight capacity artificially low. The airlines have a collective market share of approximately 80 percent, according to court documents.

Elizabeth Cabraser Named to Plaintiffs’ Executive Committee

In February 2016, U.S. District Judge Colleen Kollar-Kotelly appointed Elizabeth Cabraser to the three-member Executive Committee overseeing the airline price-fixing antitrust litigation.

The litigation follows the U.S. Department of Justice’s investigation into the airline industry seeking to ferret out possible illegal conduct, including concerns that the major U.S. airlines conspire to limit seat availability which drives up airfares on existing seats. The Justice Department sent “civil investigative demand” letters — which are similar to subpoenas — to American, United, Delta, and Southwest Airlines.

Keeping The Airlines Honest Requires Consumers To Take Action

Government antitrust prosecutions can result in the levying of fines and penalties against corporations that commit misconduct. However, the consumers who were forced to pay higher prices or lost income due to the price fixing conspiracy do not receive any share of the government fines.

This is one reason why the enforcement of antitrust laws by individual consumers through class action lawsuits is so important. Class action lawsuits enable a group of consumers to represent all consumers affected by the same price conspiracy and recover damages from large, powerful corporations.