NEW DISTRIBUTION CAPABILITY AND COMPETITION 593 Those provisions continue to operate today under the Federal Aviation Act of 1958, as amended. Following the deregulation of the air transport industry in the US in the late 1970s and the dissolution of the CAB in the early 1980s, antitrust scrutiny of airline agreements and practices is conducted by the US Department of Transportation8. For instance, when airlines reach agreements at IATA conferences, such as at the Passenger Services Conferences (PSC) in the case of IATA Resolution 787 on NDC, IATA must file with the Department of Transport (DOT) for approval of the agreements and in some cases, seek antitrust immunity for such agreements9. The goal of antitrust law is not to protect the consumer but to protect competition10. Of course, the effect of antitrust law is protection of both the consumer and the competitor from anticompetitive behaviour, but this is a secondary effect of protecting competition itself. Whilst this is true for things like the Sherman and Clayton Acts, the laws applicable to air transport twist slightly this principle11. The antitrust laws applicable to airlines under the Federal Aviation Act place an emphasis on the consumer. For example, under 49 USC §§ 41308 and 41309, the DOT can approve agreements or requests for authority to discuss cooperative arrangements if they are not ‘adverse to the public interest’. This public interest test is regularly applied in a manner that focuses on the interest of the consumer. Likewise, under the oft derided 49 USC § 41712, the DOT may take actions against air carriers, both foreign and domestic, and ticket agents engaged in unfair and deceptive practices or unfair methods of competition. 8 David Heffernan and Reese Davidson, “Airline Alliance and Antitrust Immunity” in David Heffernan & Brent Connor, Eds., Aviation Regulation in the United States (American Bar Association, 2014) 179, 182. [Hereinafter, ‘Heffernan and Davidson’]. 9 US DOT, Order to Show Cause (Action on IATA Agreement, 21 May 2014) online: https://www. transportation.gov/sites/dot.gov/files/docs/IATA_Res_787_showcause.pdf [hereinafter ‘DOT Order to Show Cause – IATA Res 787’]. 10 Shawcross and Beaumont, Air Law (LexisNexis, 2018) Volume 1, Part X, Chapter 41, p. X-1 (For example, on the purpose of competition law in the United Kingdom, the authors state, “Competition law attempts to attain the objectives of competition policy by seeking to preserve, through the imposition of statutory controls, the freedom of the market place from artificial distortion”) [Hereinafter, ‘Shawcross and Beaumont’]. 11 It should be noted that the air transport industry was deregulated at a time when a broad shift in US antitrust policy (and, hence, antitrust enforcement) was underway. In that sense, the current approach to antitrust enforcement in the air transport industry, which places an emphasis on the consumer, might simply be the by-product of broader changes in antitrust law enforcement that occurred in tandem with airline deregulation and a movement to ‘open skies’. See, Lina M. Khan, “Amazon’s Antitrust Paradox” (2017) 126 Yale L J 710, 718-721 (Explaining that the influence of the Chicago School approach to antitrust law was embraced by the Reagan Administration, leading to a shift from an emphasis on economic structuralism, which had pervaded antitrust enforcement up to the 1980s, to an emphasis on consumer welfare under a price theory, which ignores broader network effects of horizontal cooperation and effectively ended prohibitions on vertical consolidations).
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