A group of 21 plaintiffs from across the U.S. have filed a class-action complaint against Sabre, Travelport and Amadeus, accusing the GDS providers of collusion and of engaging in practices designed to thwart competition.
The plaintiffs are seeking injunctive relief to correct the "anti-competitive market effects" allegedly caused by the GDS providers as well as unspecified cash damages.
All three GDS companies said they would "vigorously" fight the case in statements to Travel Weekly.
The 104-page suit, filed on July 14 in the U.S. District Court for the Southern District of New York, centers its allegations on contracts the GDS companies entered into with airlines in 2006, after the DOT stopped regulating distribution systems. Those contracts require airlines to make all of their flight offerings available on each of the three GDSs, the suit says. They also prohibit airlines from selling flights at lower costs through their own distribution systems or through other channels. In addition, airlines cannot levy surcharges on travel agents for using a GDS rather than a less costly alternative.
The result of those contractual constraints, says that suit, is that Amadeus, Travelport and Sabre, which together account for more than 99% of the GDS market in the U.S., have been able to charge "supracompetitive" fees that have led to higher ticket prices for airline passengers.
"By requiring fares available through a GDS to be priced at parity, regardless of the distribution channel, the contractual restraint eliminates price competition among the defendants, neutralizes the potential of lower-cost entrants and stems the shift of booking to the airlines' own websites, thereby insulating the GDS fees from competitive pressure," the complaint alleges.
The airlines were compelled to enter into such a contract, the suit contends, because the GDS providers, faced with new threats from airline websites and from start-up electronic-booking companies, colluded to make sure that the airlines entered into full-content agreements.
The GDSs used "cartel"-like tactics during negotiations for the 2006 contracts, according to the suit.
"Facing the specter of financial ruin from having their flights 'delisted' by the GDSs, the airlines ultimately acceded to defendants' demands and executed the contracts," it says.
In an email statement to Travel Weekly, Amadeus painted a very different picture of the GDS' impact. The GDS, Amadeus said, has ensured that travelers across the world have both the transparency and the choices they demand.
"Global distribution systems have been instrumental in facilitating an era of unprecedented mass air travel, delivering value both to the airline industry and to the traveler," the statement reads.
CORRECTION: The headline on this report was corrected to reflect that the suit was filed against GDSs.