The U.S. Department of Justice has broadened its investigation of the GDS industry to include travel agencies.
A large U.K. agency with extensive operations in the U.S. has received a civil investigative demand (CID) for “an enormous amount of information” about its relationships with GDS companies, according to Richard Clarke, director of Travel Technology Research Ltd., a U.K.-based research and consultancy firm. Clark did not name the agency.
In his opening address to the Innovation in Airline Distribution 2012 conference in Miami, Clarke said the Department of Justice had expanded its investigation over the last few weeks.
The Justice Department previously sent CIDs to several airlines and all three GDS companies operating in the U.S. The department launched an investigation of GDS practices last May, following American Airlines’ filing of its antitrust lawsuit against Sabre and Travelport.
Hours of work for agencies
A civil investigative demand, similar to a subpoena in criminal cases, obliges its recipient to produce documents and information, including oral testimony, that may be relevant to an antitrust investigation.
For travel agencies that receive a CID – and more agencies likely will – complying involves hours of work amassing the requested information.
Expects more regulation
Clarke said the heightened interest in the distribution of airline tickets and other products and the nature of the relationships of airlines, travel agencies and GDS companies, is likely to result in “more regulation in the future.”
The Justice Department has “wide-ranging powers,” he said. Its actions “may change the economics. It could eliminate agency incentives and force agencies to behave in certain ways.”
Clarke added that since “GDSs’ largest individual cost is incentives, they would not be badly affected in terms of margins” if incentives were eliminated.”