Airline antitrust restrictions

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Airline antitrust regulations exist because to protect consumers from higher prices by ensuring the continuation of market competition. The Federal Government enforces antitrust laws including The Sherman Antitrust Act, The Clayton Act, and The Federal Trade Commission Act. Airlines have a history of trouble running into antitrust laws because the industry’s high concentration (small number of firms) makes it is easier to collude prices. Since it is such a big industry, (it has a large number of customers) there is support behind the regulation.

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Tradeoffs of implementing this policy may include:

  1. Pros: Regulations protect competition, which is good for the above listed reasons.
  2. Cons: Overregulation burdens companies by causing an increase of costs for their operations (hiring lawyers, etc.), which are then passed to the customers, increase in the cost of their product, in this case air travel.
Compatibility Assessment

If answered yes, the following questions indicate superior conditions under which the policy is more likely to be appropriate:

  1. When airlines are colluding prices
  2. When two airlines that make up a large portion of the market are merging

The following questions should be considered when determining how to implement this policy:

  • If someone is thought to be breaking antitrust law:
  1. Does the DOJ think they broke it? (Then the DOJ investigates)
  2. Does the DOJ have strong evidence that they broke it? (Then the DOJ brings the defendant to court)
  • If a major merger is occurring: (The DOJ reviews all major mergers in airline industry)
  1. Does the DOJ think the merger substantially lessens competition? (The DOJ investigates)
  2. Does the DOJ have strong evidence indicating the merger does substantially lessen competition? (Then the DOJ brings the defendants to court to challenge the merger. It is then up to court’s decision. The merger may fall through (because defendants don’t want a lawsuit)


  • Notable entities who have implemented or adopted this policy include:




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