US Airways on the Other Side of Antitrust Case

Remember the US Airways antitrust case? The Department of Justice tried to stop the company from taking over American Airlines. The case settled and the merger went ahead.

But now I read that US Airways is still involved in an antitrust case— as the plaintiff .

Sigh.

It turns out that for the past several years, US Airways has been suing Sabre, a company that provides a system travel agents use to sell tickets. The airline says , “Sabre creates barriers for competition by providing a portion of the fees it receives from airlines to travel agents.” In other words, travel agents choose to work with Sabre because it pays them. The airline also says , “If Sabre excluded US Airways from its offerings to its travel agents, those agents could no longer book US Airways tickets through Sabre. US Airways would not be able to survive the subsequent loss of revenue.” In other words, US Airways also benefits from working with Sabre.

So a victim of the anti-freedom antitrust laws is also an antitrust plaintiff. What should we say of such a thing? (Other than that bugs us crusading types.)

It’s not hypocrisy. US Airways didn’t condemn antitrust law; it defended its case, and then settled it. Nor is US Airways crusading for antitrust law now. In both cases, it’s more or less taking the law as it is and pursuing its goals within that framework.

And that, some might say, is what businesses should do. Figuring out whether a law is good or evil is a matter for philosophers like me; businessmen have more practical priorities.

One thing, though. What’s “practical” depends on what actually makes your life better. Bad laws have bad effects, as antitrust recently had on US Airways, making its merger harder to transact and (because it had to give up assets ) ultimately less valuable. When you take the law as given, instead of judging it, you don’t identify the causes of those effects. And that means that even if you protect yourself from a particular bad effect—in this case, even if you successfully get your merger to go through—you don’t make progress against the long-range threat.

There’s a case to be made for taking advantage of bad laws: one suffers burdens from them either way. But that doesn’t mean it’s practical to take those laws for granted, or to ignore that they are bad. One should at least speak up, lest one seem to endorse the very laws by which one has been victimized.

Why is antitrust anti-freedom? I explain here , and I address mergers here . My comment on the resolution of the US Airways merger case is here .

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