Law, Business and Society 11th Edition by Tony McAdams

Exercise 12

Several smaller airlines sued the two giants, United and American, claiming that the two violated the Sherman Act through their computerized reservation systems (CRSs). The heart of the plaintiffs' position was that United and American were monopolists who violated the law by denying other airlines reasonable access to their CRSs. American and United had the largest CRSs, but other airlines also maintained CRSs. Neither had blocked any other airline's access to its CRS, but they had charged fees (in American's case, $1.75 per booking to the airline that secured a passenger through American's CRS). United and American each controlled about 12 to 14 percent of the total air transportation market. According to the court, the plaintiffs were "unhappy" about United and American's ability to extract booking fees from them for the use of the CRSs. The U.S. Ninth Circuit Court of Appeals ruled for the defendants, and the Supreme Court declined to review this case.
a. Explain why the plaintiffs felt wronged by American and United.
b. Explain the defendants's argument that they could not successfully charge "excessive" prices for the use of the CRSs. See Alaska Airlines v. United Airlines, 948 F.2d 536 (9th Cir. 1991), cert. den. 112 S.Ct. 1603 (1992).