Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Travel agency asserts that Altour violated Sherman Act and forced it out of business, (Dec 6, 2013)

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

Planetarium Travel, Inc., a former franchisee of American Express Travel Related Services Company, Inc. (“Amex”) has filed suit in the federal district court in New York City, alleging that four affiliated entities—Altour International Inc., Altour Air LLC, Altour Service, Inc., and Altour Management Technology LLC (collectively, “Altour”)—engaged in an anti-competitive scheme to drive Planetarium Travel out of Amex’s franchise network in violation of the Sherman Act (Planetarium Travel, Inc. v. Altour International, Inc., December 2, 2013).

According to the complaint, Amex controls a major market share of the supply, distribution, and sale of discounted first and business class airline tickets, as well as lodging and travel related services. For the 17 years prior to its termination, Planetarium was a franchisee of Amex and, as such, was given access to Amex’s wholly owned travel offices, other franchisees, and preferred supplier affiliates (together, the “Network”).

Altour is one of the world’s largest independent travel enterprises, with a billion dollars in leverage and $850 million in annual sales, Planetarium contends. Further, Altour engaged in a scheme to restrain Planetarium’s association with the Amex Network and the relevant travel markets by pressuring Amex to terminate its franchise relationship with Planetarium and to instead add Altour as one of its franchisees. Altour fully achieved its goals of restraining Planetarium from the relevant markets and insulating itself from price competition when Planetarium recently was forced to enter a wind-down process and to settle its contract-based litigation with Amex.

Planetarium asserts that Altour violated Section 1 of the Sherman Act by knowingly approaching and combining with Amex, each possessing market power, conspiring to restrain competition in the relevant markets, and by monopolistic means and overt acts, which unreasonably restrained competition through horizontal price fixing and horizontal market division. As a result of these actions, the prices for discounted first and business class tickets for Amex card members increased and the price of first and business class tickets increased to supra-competitive levels for discount consolidators such as Planetarium.

Planetarium also contends that Altour violated Section 2 of the Sherman Act by attempting to monopolize the relevant markets. Claims for violation of the New York Donnelly Act and for tortious interference are also included in the complaint.

Planetarium requests that it recover threefold the damages that it sustained, its costs of suit, and any addition relief as may be just.

The case is No. 1:13-cv-08538-AT.

Attorneys: David J. DeToffol (DeToffol & Associates) for Planetarium Travel, Inc.

Companies: Planetarium Travel, Inc.; Altour International, Inc.

News: Antitrust FranchisingDistribution NewYorkNews