Anthony W. Swisher is a Partner, and Jody Boudreault is a Senior Associate, in the Washington, DC office of Baker Botts L.L.P. Mr. Swisher serves as the WLF Legal Pulse blog’s Featured Expert Contributor on Antitrust & Competition Policy—U.S. Department of Justice.

On May 12, 2020, the Department of Justice moved the U.S. Court of Appeals for the Third Circuit to vacate the U.S. District Court for the District of Delaware’s U.S. v. Sabre Corp. opinion.  In an opinion released on April 7, the court rejected DOJ’s challenge to the proposed merger of Sabre and Farelogix.  Despite winning the DOJ litigation, the parties abandoned their merger before DOJ filed any appeal brief because the U.K. competition authority challenged their deal.  Although the transaction was abandoned, DOJ’s motion to vacate reflects concern that the court’s reliance on the 2018 Ohio v. American Express Co. Supreme Court decision “could affect antitrust enforcement beyond the instant case.”

Specifically, DOJ argued that “this ruling—if not vacated—could have an outsized effect on cases involving competition in the digital economy, where it is not uncommon for multi-sided platforms to face competition from one-sided rivals.”  Perhaps DOJ means that the Sabre holding (in the Third Circuit where the holding is persuasive) might make it much more difficult for the agencies to challenge certain mergers.

Sabre was a litigated challenge to a leading firm’s acquisition of a small rival—the Sabre acquisition of Farelogix in an alleged “booking services” market.  Notably, the court’s analysis of Amex, product market, and economic models to determine competitive effects may heighten the agencies’ burden of proof and inform defendants’ strategy in future merger challenges.