An American Airlines plane is seen between two US Airways planes at Washington's Ronald Reagan National Airport. Susan Walsh/AP

Management

An Antitrust Lawsuit Against US Airways and American Airlines Shows the US DoJ Means Business

The move is another sign of the department's recent aggression on antitrust.

Gina Chon,
Quartz

August 14, 2013

By Gina Chon

Quartz

The deal to merge US Airways and American Airlines, which would create the world’s largest airline, has suffered a big setback. In a surprising move, the US Justice Department filed an antitrust lawsuit, saying the transaction poses “substantial harm” to consumers. That means US Airways and American will have to offer more concessions, like giving up more take-off and landing slots at airports, to try to win approval, or risk losing the deal all together.

The move is another sign of the department’s recent aggressiveness on antitrust, in contrast to the George W. Bush years, when it was seen as lax. Under the Barack Obama administration, antitrust officials have blocked AT&T’s acquisition of T-Mobile, and wrangled more concessions out of beer brewer Anheuser-Busch InBev before it approved the company’s deal for Corona maker Grupo Modelo.

The Justice Department also won an antitrust lawsuit against Apple, which was accused of working with five book publishers to increase the price of e-books. That successful track record has no doubt emboldened government officials even further.