U.S. airlines face two new class action lawsuits accusing American, Delta, United, Southwest, Alaska, Hawaiian and JetBlue of using shared pricing and shopping data to keep ticket prices high. Airfares rose 22.4% over the past year, according to the government's September inflation report.
The suits target the Airline Tariff Publishing Company (ATPCO) and its subsidiary 3Victors, which operate data-sharing systems used by airlines daily. ATPCO's Iris system collects shopping data from airlines and returns competitive information. PriceEye supplies pricing alerts that draw attention to differences. DemandView identifies demand based on search activity. 3Victors describes the arrangement as "the more you contribute, the more you receive."
The lawsuits, Ward v. ATPCO filed in federal court in Seattle and Brown v. ATPCO filed in Virginia, argue that these systems give airlines visibility into competitor pricing they would not otherwise have, including offers that have not resulted in sales. If an airline expects every price cut to be matched immediately by rivals, it may not discount to fill seats.
The same information can reduce ticket costs. An alert about being underpriced lets an airline lower fares to stay competitive. Better demand data can support adding flights or larger aircraft, increasing seat supply and supporting lower prices.
Whether this constitutes a legal violation remains uncertain. An airline can generally observe a public price and match it without violating antitrust law. But an agreement to exchange sensitive information that makes competition less vigorous falls into legal gray area. The lawsuits allege this violates the Sherman Act by unreasonably restraining competition, though the cases must reach the discovery stage to establish actual agreements and data flows.