A Tale of Two Sides: Sabre/Farelogix in the United States and the U.K.

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The authors discuss the differing conclusions of the U.S. and U.K. courts in the proposed Sabre/Farelogix merger in this Journal of European Competition Law & Practice article.

On November 14, 2018, Sabre Corporation announced that it had reached an agreement to acquire Farelogix Inc. for USD360 million. On August 20, 2019, the U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit seeking to block the transaction. The U.K.’s Competition and Markets Authority (CMA) continued its review of the proposed transaction.

Following a two-week trial in 2020, the U.S. District Court for the District of Delaware issued its opinion, denying the DOJ’s request to block the merger. Shortly thereafter, the CMA issued its final report, detailing its decision to prohibit the deal. The parties then abandoned the transaction, citing the CMA’s decision.

The Delaware District Court and the CMA arrived at different conclusions despite agreeing on several key facts. In this article, authors Kostis Hatzitaskos and Brad Howells of Cornerstone Research and Professor Aviv Nevo of The Wharton School discuss the following:

  • The Sabre decision suggests that U.S. courts might require a particularly high standard of proof in mergers involving claims of potential competition challenged under Section 7 of the Clayton Act.
  • The U.K. enforcement system seems to have greater flexibility, which at least in part allowed the CMA to reach a different conclusion than the Delaware District Court.
  • The high standard of proof and the divergence with the U.K. system are especially likely to be relevant in cases involving two-sided platforms, where the American Express decision casts a long shadow on U.S. enforcement efforts.

This article was originally published by the Journal of European Competition Law & Practice in June 2021.


The views expressed in this article are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research.

A Tale of Two Sides: Sabre/Farelogix in the United States and the U.K.

Authors

Aviv Nevo

George A. Weiss and Lydia Bravo Weiss University Professor,
Professor of Economics and Marketing,
The Wharton School and Department of Economics,
University of Pennsylvania;
Former Deputy Assistant Attorney General for Economic Analysis, Antitrust Division, U.S. Department of Justice;
Senior Advisor, Cornerstone Research

  • Chicago

Kostis Hatzitaskos

Vice President

  • San Francisco

Brad T. Howells

Vice President