The U.S. Dept. of Justice has begun looking into allegations by Farelogix that Sabre engaged in anti-competitive practices when it terminated a Farelogix developers' agreement in March.
The Farelogix FLX Platform enables major travel management companies, including Carlson Wagonlit Travel, American Express Business Travel and others, to tap into Farelogix's direct-connects with airlines, apparently at a cheaper price than the TMCs would get from the established global distribution systems. In this era of GDS deregulation in the U.S., distributors such as Farelogix also serve as a content hedge against carriers dropping out of some of the major GDSs.
Farelogix alleges that when Sabre terminated the Farelogix developers' agreement with the Sabre GDS that Sabre was using its imposing market clout in the U.S. market to snuff out a competitor. When that agreement ended, it made it much more difficult for Farelogix customers to integrate their Farelogix bookings with other reservations made through Sabre.
And, Farelogix also alleges that Sabre used its persuasive powers to dissuade existing or potential customers from dealing with Farelogix.
Tnooz has learned that the Dept. of Justice has recently begun contacting Farelogix customers about the allegations. Farelogix partner Pass Consulting, as well as Globus and Vayama (also known as Air Trade International), confirmed they have been contacted.
William Niejadlik, chief technology officer of Vayama, says the DOJ contacted the company, and sought information relating to the timelines of its dealings with Farelogix and Sabre. Niejadlik says Vayama is a Farelogix customer and had been seeking to establish a relationship with Sabre, as well.
Major travel companies often use multiple GDSs because when a particular GDS also hosts an airline, there may be advantages on the availability front to using that GDS. Cutting off Farelogix's access to Sabre, or so the argument goes, proves disadvantageous to Farelogix customers who also want to access the Sabre system.
I contacted the DOJ about the inquiry, and am awaiting a response from the government agency.
When contacted over the weekend, Farelogix President and CEO Jim Davidson confirmed that he has met with DOJ officials several times over the allegations, but he declined further comment.
Sabre spokeswoman Nancy St. Pierre said Saturday that Sabre has not yet been contacted by the DOJ about the matter.
"However, as we said earlier this year, the termination of the developer agreement with Farelogix only affected a handful of Sabre subscribers and we have worked hard to ensure their needs have been taken care of," St. Pierre says. " Our action was taken in light of the evolution of the Farelogix business model to one of content fragmentation, and what became clear was an attempt to free ride off of our database and systems. The termination was fully compliant with the terms of the agreement and with any applicable law. Sabre has not told any of its subscribers not to do business with Farelogix."
Farelogix is the surviving "alternate distributor" in the U.S. among three new-entrants of a few years ago. ITA Software gave up its distribution aspirations and turned to airline hosting. And, G2 SwitchWorks, founded by some Orbitz expatriots, was acquired by Travelport, which is using G2 know-how for travel agency desktop development.