Antitrust: Cartel and Federal Trade Commission

1197 WordsJan 23, 20145 Pages
Research Paper – Antitrust Introduction The purpose of this paper is to discuss antitrust law with regard to federal regulations. In the form of a case study, this paper will examine the legal obstacles faced by the merger proposal between US Airways Group Inc. and American Airlines' parent corporation AMR. The focus of the paper is to examine the legal hurdles posed by antitrust laws used to block the merger and then briefly explore possible ethical issues associated with allowing US Airways Group Inc. and AMR to merge. Antitrust Laws There are three core federal antitrust laws in effect today in our US legal system. They are the Sherman Act, The Federal Trade Commission Act, and the Clayton Act…show more content…
External Obstacles In 2005, US Airways and AMR publically proposed a merger that was met with a great deal of resistance. The government has the responsibility to regulate mergers to ensure the merger doesn't violate antitrust laws. This merger had to be reviewed by several agencies such as the U.S. Justice Department, the U.S. Department of Transportation, the Air Transportation Stabilization Board, the Security and exchange commission, and U.S. Bankruptcy Courts. This was a very high profile merger proposal and it was met with a great deal of opposition (Cobb, et al., 2006). The airline eventually won Department of Justice approval but had to agree to give up some airport slots to clear antitrust concerns. Both airlines agreed to the terms in order to keep the merger proposal alive (Majcher & Russell, 2013). Because of a Philadelphia to London route the proposed merger also had to gain some clearance by the European Commission. The airlines once again agreed to give up the route to alleviate any international anti-competitive effects (Knibb, 2013). Ethical Concerns The Department of Justice and six state attorneys-general together filed a suit against the merger arguing that the merger would lead to an increase in airfare, in fees, and also limit choices also the merger agreement will cost workers jobs as American Airline was forced to relinquish hub status at several

More about Antitrust: Cartel and Federal Trade Commission

Open Document