Tuesday, August 31, 2010

Consumers seek injunction against Continental/ United Air Lines Merger in Northern District of California

A group of customers of Continental Airlines and United Air Lines have requested the Judge Richard seeborg U.S. District Court for the Northern District of California to issue a preliminary injunction forbidding the companies from merging according to Bloomberg who covered today's hearing.

The plaintiffs argue in their motion for a preliminary injunction that allowing Continental and United to merge that the newly formed company would be the largest airline.  That new company would have fewer departures in six of seven major hubs and control a greater share of both the domestic and international markets.  The plaintiffs conclude that would violate Section Seven of the Clayton Act which forbids mergers that reduce competition.

The airlines respond that the market is already very crowded and competitive, and that the merger is not likely to change that.  It follows that the justice department looked at the case and chose not to pursue it because it could not find an anticompetitive outcome to the corporations proposed actions.  Finally, the parties disagree over which cases apply to govern the outcome of the case.

The case is Malaney v. UAL Corp., No. C 10-2858, and the motion is below the fold.

Here is the heavily redacted motion:
Malaney v. UAL

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