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U.S. Seeks to Vacate Sabre, Farelogix Antitrust Decision

May 13, 2020, 3:18 PM

The Justice Department has asked a federal appeals court to nix a recent court opinion approving the now-abandoned merger between travel companies Sabre Corp. and Farelogix Inc. out of concern for its potential impact on future suits involving technology platforms.

A district court opinion in favor of the $360 million merger should be vacated because the government can’t appeal the decision now that Sabre and Farelogix have terminated their transaction, the DOJ said Tuesday in a filing with the U.S. Court of Appeals for the Third Circuit.

Sabre and Farelogix abandoned their deal May 1 less than a month after Judge Leonard Stark of the U.S. District Court for the District of Delaware ruled in favor of the merger, dismissing the DOJ’s antitrust lawsuit that sought to prevent the deal.

A vacatur of Stark’s opinion is appropriate “because the district court’s decision could affect antitrust enforcement beyond the instant case” the DOJ said.

The U.S., which moved to appeal the merger decision April 8, has disputed Stark’s reading and application of a recent Supreme Court case, Ohio v. American Express Co., in the Sabre-Farelogix opinion.

Interpreting the Supreme Court’s American Express opinion, Stark concluded that Sabre and Farelogix don’t compete with one another because they’re not both two-sided platforms, which serve two separate and distinct markets.

The Supreme Court held that, to demonstrate antitrust harm, plaintiffs must show that both sides of a two-sided platform would be harmed by the alleged anti-competitive conduct.

Farelogix’s merger with Sabre isn’t anti-competitive, as the DOJ alleged, Stark said. Farelogix is a one-sided platform, serving just airlines, whereas Sabre is a two-sided platform serving various consumers, he said.

Few courts have grappled with the 2018 American Express decision, the DOJ said. That means the Sabre-Farelogix opinion, if it remains in place, “could have an outsized effect on cases involving competition in the digital economy, where it is not uncommon for multi-sided platforms to face competition from one-sided rivals,” the agency said.

Attorneys for Sabre and Farelogix haven’t yet taken a position on the DOJ’s move to vacate the lower court’s opinion, the government said.

The case is United States v. Sabre Corp., 3d Cir., No. 20-1767, Motion to Vacate filed 5/12/20.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com