The three major GDSs and several airlines confirmed that they received from the Justice Department requests for information regarding DOJ's antitrust probe of GDS competition.
The investigation could span months and dovetails with other efforts to assess competition in airfare distribution.
Confirming an American Airlines statement, a DOJ spokesperson said the department "is investigating the possibility of anticompetitive practices in the global distribution systems industry."
Delta and US Airways confirmed that DOJ contacted them in relation to the probe; United Continental Holdings would not comment. All three GDS companies indicated they would cooperate in the investigation.
The requests for information from DOJ came in the form of civil investigative demands (CIDs), according to airlines and GDSs.
CIDs essentially are subpoenas for documents and in some cases depositions, according to Roy Goldberg, a partner and head of the aviation practice at law firm Sheppard Mullin Richter & Hampton, which is not involved in the DOJ probe.
Depending on what DOJ finds in its investigation — a process not open to the public — it could pursue a civil suit, issue a consent decree or, if no violations are found, do nothing.
"They could take a while," Goldberg said. "It depends on the workload of the DOJ attorneys, how quickly people respond and whether they want to take depositions or not."
According to American Antitrust Institute vice president Diana Moss, "DOJ could investigate for months."
Moss noted that in such investigations DOJ generally searches for violations of Section 1 or Section 2 of the Sherman Antitrust Act. Section 1 deals with conspiracies or collusive pricing, and Section 2 deals with attempts to monopolize markets.
DOJ would not specify which potential antitrust violations it is probing, but recent civil cases filed by AA and US Airways highlight potential issues.
For example, an AA lawsuit argues that Travelport is a monopoly provider in a "relevant product submarket" and alleges the GDS operator has violated the Sherman Act through pricing actions and decisions to exclude other technology alternatives. US Airways, meanwhile, similarly invoked antitrust violations and monopolistic pricing in its recent lawsuit against Sabre.
"The core issue here is, are the GDS providers abusing market power?" Goldberg said. "It's very clear that some airlines believe they are."
Goldberg noted that civil lawsuits could "resolve some issues," but cautioned that civil rulings from different courts could produce "an ad hoc, patchwork solution."
Antitrust civil suits and appeals could last as long as four years, according to travel industry lawyer Jeff Miller, who wrote on his blog that he sees the suit between US Airways and Sabre "ultimately being resolved through a settlement of some sort and the case eventually being dismissed by US Air."
Goldberg, meanwhile, is not ruling out further Transportation Department involvement in the issue of GDS competition.
Though DOT deferred to 2012 a new proposal on airline fee disclosure and fare transparency, it could step in and "exert primary jurisdiction" on the issue, he said. DOT has authority to set regulations on airfare distribution, whereas DOJ "isn't there to make policy. They're there to call balls and strikes. Is market power being abused? Yes or no."
The DOJ investigation could yield a few outcomes, according to Moss.
"The most full-blown scenario would be that they develop enough of a record, based on enough evidence that they've collected and analysis they've done internally, to file a complaint," she said.
"If they go down that road, they have to make pretty sure they have a good case. Stopping short of that, if there is a concern, they could talk to the parties and get them to agree to stop doing whatever they're doing. Or they could close their investigation without finding anything."
An investigation in the GDS marketplace came to light more than a year ago as DOJ interviewed industry executives following the ejection of Farelogix from the Sabre developer program. A Farelogix spokesperson, however, confirmed the tech provider has not received from DOJ any formal requests for information regarding the new probe.
"Occasionally DOJ will look informally into certain activities," said Moss. "For example, when Orbitz was formed, they were probing around and asking questions, but they hadn't issued a formal investigation. That inquiry closed down on its own, and they didn't find any issues. Once the CIDs go out, it's more formal. This is the next level up."
This report originally appeared in sister publication The Beat on Tuesday.
