Antitrust Law Daily Wrap Up, ANTITRUST NEWS: American Antitrust Institute files comments on airline ancillary fees rulemaking, (Sep 30, 2014)

By Peter Reap, J.D., LL.M.

The American Antitrust Institute (AAI) filed comments with the U.S Department of Transportation (DOT) yesterday in response to the May 23, 2014, Notice of Proposed Rulemaking (NPRM): "Transparency of Airline Ancillary Fees and Other Consumer Protection Issues" (Docket DOT–OST–2014–0056). The AAI's comments address the importance of transparent ancillary service prices for competition.

“Federal antitrust enforcers have recognized the powerful role of pricing transparency in protecting consumers and competition,” the AAI stated in its comments. “As the Federal Trade Commission has noted, for example, non-transparent pricing of ancillary fees can negatively affect competition by reducing the consumer’s incentive or ability to switch suppliers during the search process. Pricing transparency can defeat these adverse effects.”

Lack of transparency is of particular concern to the AAI, in light of (1) increased consolidation and concentration in the domestic industry and stronger incentives to coordinate on capacity, fares, and ancillary fees, and (2) the consumer lock-in that is promoted by non-transparent ancillary fees. “The proposals outlined in the DOT NPRM to increase transparency in airline ancillary fees therefore can protect consumers not just from unfair and deceptive acts or practices, but also from unfair methods of competition,” the AAI notes. Further, the AAI’s comments address “a number of areas where the NPRM’s proposals to enhance pricing transparency will serve both of these interrelated goals.” The AAI supports a number of the DOT's proposals in the NPRM and urges the DOT to apply ancillary fee transparency requirements uniformly to all market participants and across all distribution channels.

News: Antitrust