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UK Court Dismisses Sabre’s Challenge Of CMA Decision To Block Farelogix Buy

By  |  May 23, 2021
CMA

The UK Competition Appeals Tribunal on Friday, May 21, dismissed Sabre’s challenge of the UK Competition & Markets Authority’s (CMA) decision to block its proposed Farelogix acquisition, which collapsed last year amid the UK regulator’s intervention and cleared the way for Farelogix’s acquisition by Accelya.

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    The judgment endorses the CMA’s approach to the share of supply test, on which the CMA relied to find jurisdiction to assess the merger. In particular, the Tribunal confirmed that the application of the share of supply test is a matter of judgement for the CMA and it has a broad discretion in determining the criteria used.

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    CMA Chief Executive Andrea Coscelli said, “We are pleased by this important judgment from the Competition Appeal Tribunal. Sabre did not challenge the substance of our finding – that the merger would lead to less competition and harm consumers – but instead sought to argue that we did not have jurisdiction over it. The Tribunal upholds our view that the share of supply test covers this type of transaction, where both companies compete closely in their innovative efforts and offer important products and services, used by UK businesses, where less competition could have serious knock-on effects for UK consumers.”

    Among other products and services, Sabre and Farelogix supply software solutions which help airlines to sell flights via travel agents including those that operate online. Their IT solutions enable airlines to create add-ons to tickets sold through travel agents such as seats with extra leg room, WiFi and meals. Additionally, the 2 companies offer services to help airlines connect with passengers via travel agents.

    On 9 April 2020, the CMA published a report blocking Sabre’s proposed acquisition of Farelogix after finding the deal could result in less innovation in their services, leading to fewer new features that may be released more slowly. Fees for certain products might also go up. As a result, airlines, travel agents, and UK passengers would be worse off. In particular, the CMA was concerned that UK passengers would miss out on the benefits of continued innovation and greater choice in and control over their travel experience

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