Blumenthal, Markey Call on DOT to Promote Transparent Airline Price Competition
Price Comparison Websites Promote Price Competition in the Airline Industry by Allowing Consumers to Make Apples-To-Apples Comparisons among Fares and Flights, but Recent Reports Indicate That Airlines Are Refusing to Provide Flight Information to These Sites. In a Letter to the DOT, the Senators Called on the Department to Investigate these Complaints and Promote Transparent Price Competition That Will Allow Consumers to Quickly and Easily Make Good Purchasing Decisions.
(Washington, D.C.) – U.S. Senators Richard Blumenthal (D-Conn.) and Edward Markey (D-Mass.) are calling on the Department of Transportation (DOT) to promote airline price competition. Price comparison websites promote price competition in the airline industry by allowing consumers to make apples-to-apples comparisons among fares and flights, but recent reports indicate that airlines are refusing to provide flight information to these sites. In a letter to DOT Secretary Anthony Foxx, the senators called on the department to investigate these complaints and promote transparent price competition that will allow consumers to quickly and easily make good purchasing decisions.
“We write today because our offices have received reports that airlines may be refusing to provide flight information to third-party price comparison sites, which have helped the flying public save billions of dollars,” the senators wrote. “We believe this practice is damaging to consumers and potentially in violation of our consumer protection laws that promote competition in the air transportation industry. The Department should take these complaints seriously and investigate them as part of your broader mission to protect American consumers from anticompetitive behavior. Given the unprecedented level of consolidation among the airline industry, it is more important than ever that consumers maintain the ability to comparison shop.”
The full text of the letter is available here and below.
Dear Secretary Foxx:
We write today because our offices have received reports that airlines may be refusing to provide flight information to third-party price comparison sites, which have helped the flying public save billions of dollars. We believe this practice is damaging to consumers and potentially in violation of our consumer protection laws that promote competition in the air transportation industry. Accordingly, we urge the Department of Transportation (DOT or Department) to use its existing statutory authority to promote transparent price competition that will allow consumers to quickly and easily make good purchasing decisions.
Price comparison websites allow consumers to make apples-to-apples comparisons among fares and flights, acting as a catalyst for pricing competition. Decisions by the airlines to withhold their flight data seem intended to push travelers towards the airlines’ own websites, where they can add-on extra fees to ticket prices for seat-selection, early boarding, or bag-check and luggage handling. Many of these sites also allow consumers to mix and match flights from competing airlines to customize the best itinerary for each trip. However, when airlines restrict third-parties from accessing their flight scheduling and fare data, they make it harder for consumers to select the best price, schedule, and airport from all readily available options. Making comparison shopping more difficult for consumers could also aid airlines in tacitly coordinating their ancillary fees, helping to shroud and hide the true cost of flying from the market.
For example, Delta prohibits certain third-party price comparison travel websites, including online travel agents (OTAs) and “meta-search” websites, from fully accessing the airline’s flight data. A consumer wishing to see how Delta’s prices and schedules stack up against other carriers on the OTA TripAdvisor, or a meta-search site like Hipmunk, would be out of luck. It is impossible for these third-party websites to provide consumers with the most comprehensive and accurate information when major carriers refuse to share their flight and fare data. Consumers deserve the ability to compare flight data across multiple airlines instead of being left with no such choice.
As you know, DOT has the broad authority to investigate whether “an air carrier, foreign air carrier, or ticket agent has been or is engaged in an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation.” We urge DOT open a rulemaking to consider whether the public interest is served by airlines choosing to restrict the distribution of fare and scheduling information.
The Department should take these complaints seriously and investigate them as part of your broader mission to protect American consumers from anticompetitive behavior. Given the unprecedented level of consolidation among the airline industry, it is more important than ever that consumers maintain the ability to comparison shop. Taxpayers have supported and aided the airline industry for almost 100 years through bankruptcy protections, federal preemption of state consumer protection laws, regulated access to congested slots, antitrust exemptions, and even direct financial support. The United States has invested deeply in this industry, and the airlines have an obligation to facilitate a competitive marketplace by allowing consumers to access accurate fare and schedule information. We appreciate your close attention to this issue and respectfully request a response by April 15, 2016.
Sincerely,
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