UPDATE: The U.S. Justice Department made it official, confirming its investigation of the GDSs.
Gina Talamona, a spokeswoman for DOJ, said its antitrust division is investigating "the possibility of antitrust practices" in the GDS industry.
Talamona declined to identify which company or companies the antitrust division is probing.
Delta Air Lines confirms that it, too, has received a Civil Investigate Demand from the Justice Department, which is seeking information about the global distribution systems.
"Delta intends to fully cooperate with the Department of Justice in this matter," says Delta spokesman Trebor Banstetter.
Travelport also received similar correspondence from the DoJ. An official says:
"Travelport welcomes the GDS industry investigation by the Antitrust Division of the U.S. Department of Justice and is confident that it is in complete compliance with the antitrust laws. The company further states that it has received a Civil Investigative Demand (CID) from the Antitrust Division and is pleased to be working fully with the Department of Justice on this issue.
Amadeus also involved:
"We can confirm that Amadeus has received a Civil Investigative Demand (CID) from the United States Department of Justice. We will be fully cooperating with the DOJ to assist its investigation. However, this is a recent development and subsequently we are still reviewing the documentation, so we cannot provide further comment in more detail at this time."
ORIGINAL:
American Airlines says the U.S. Department of Justice is investigating the practices of global distribution systems as they relate to antitrust issues.
The airline says it received a Civil Investigative Demand from the DOJ's antitrust division. The CID states that DOJ "is investigating whether conduct by the global distribution systems (GDSs) violated the U.S. antitrust laws," the airline says.
American Airlines intends to fully cooperate with the investigation, says Ryan Mikolasik, a spokesman for the airline, and welcomes the investigation.
The Justice Department indeed has contacted Sabre about the matter and the company plans to "cooperate fully," says Sabre spokeswoman Nancy St. Pierre.
It is believed that as part of the investigation, the Justice Department will examine GDS contracts with airlines and travel agencies to determine if any practices raise antitrust concerns.
The backdrop to the Justice Department investigation is the highly charged distribution skirmishes which have been taking place between American Airlines and Sabre, Travelport, Orbitz and Expedia over the direct-connect issue as negotiations proceed about new American Airlines-GDS full-content agreements.
American Airlines filed a federal antitrust complaint against Travelport and Orbitz in April, and US Airways sued Sabre on antitrust grounds, as well. The American Airlines suit can be viewed here [pdf].
US Airways alleged that Sabre uses its market clout and exclusionary restrictions from protecting itself from competition.
US Airways spokeswoman Valerie Wunder said May 20 the airline has been contacted about the current DOJ investigation. Wunder declined further comment.
And, American Airlines alleges that Travelport uses its market power to control airline distribution and that Travelport and Orbitz Worldwide have entered into agreements with one another to exclude competition.
In the run-up to negotiations on new full-content agreements, both Sabre and Travelport have periodically biased American Airlines' flights in their respective GDSs and hiked the airlines' GDS booking fees. American Airlines, in turn, instituted surcharges on travel agents to recoup the fees.
Farelogix, which is American Airlines' direct-connect subcontractor, has also been contacted by the Justice Department an is cooperating with the investigation.
In 2009, the Justice Department began an investigation into allegations by Farelogix that Sabre engaged in anticompetitive practices when it terminated a developer's agreement. The results of that investigation are unknown.
Of the current investigation, disclosed today by American Airlines, the Farelogix CEO, Jim Davidson, said:
As many know, Farelogix has been in the middle of this distribution dispute, and we see a compelling need for the DOJ to act promptly to protect the interests of consumers. History has shown that anticompetitive conduct of the type engaged in by the GDS is not good for consumers, and the prospect of DOJ actively and expeditiously taking action to protect the interests of consumers through this investigation is clearly a move that is fully supported by Farelogix.