US Airways, Inc., for American Airlines, Inc. as Successor and Real Party in Interest v. Sabre Holdings Corporation

USONUITTEHDE RSTNA DTIESST RDIICSTT ROIFC TN ECWOU YROTR K

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:

US AIRWAYS, INC., :

Plaintiff, :

: 11 Civ. 2725 (LGS)

-against- :

: AMENDED

: OPINION AND ORDER

SABRE HOLDINGS CORP., et al., :

Defendants. :

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LORNA G. SCHOFIELD, District Judge:

US Airways, Inc., brings antitrust claims against Sabre Holdings Corporation, Sabre Travel

International Ltd. and Sabre GLBL Inc. (collectively, “Sabre”) under sections 1 and 2 of the

Sherman Act, 15 U.S.C. §§ 1, 2. Sabre moves to exclude certain testimony of US Airways’

damages expert Dr. Rosa Abrantes-Metz and for summary judgment on US Airways’ sections 1

and 2 claims. For the reasons discussed below, both motions are denied.

A jury previously returned a verdict in favor of US Airways on its § 1 claim following a

trial that stretched over three months in 2016. Sabre appealed. In 2019, the Second Circuit

vacated the jury award based on the 2018 opinion of the Supreme Court in Ohio v. American

Express Co., 138 S. Ct. 2274 (2018) (“Amex II”), and remanded the case. US Airways, Inc. v.

Sabre Holdings Corp., 938 F.3d 43, 69 (2d Cir. 2019). The Second Circuit concluded that “based

on the evidence that was before the jury at the time it rendered its verdict, that under instructions

consistent with Amex II, the jury could have rendered (not would have been required to render) a

proper verdict in favor of US Airways on Count 1,” the § 1 claim. Id. In the same decision, the

Second Circuit reinstated US Airways’ § 2 claim, which had been dismissed early in the action.

Id.

I. BACKGROUND

The following facts are drawn from the parties’ submissions, including their Local Civil

Rule 56.1 statements, are undisputed and provide an overview of the context of the parties’

dispute.

Plaintiff US Airways was a legacy airline and one of the largest airlines in the United States

in 2012. It is now a wholly-owned subsidiary of American Airlines Group, Inc. Sabre operates a

global distribution system (“GDS”), which is a computerized platform that connects travel

suppliers, including airlines, to travel agents who purchase tickets on behalf of the traveling

public. Two other entities, Travelport and Amadeus, have operated GDSs in the United States for

more than three decades. Airlines use GDSs to distribute flight information, including airfare and

flight schedules, to travel agencies. Travel agencies include traditional travel agencies (“TTAs”),

i.e., with agents who work out of brick-and-mortar locations, and online travel agencies. TTAs

include travel management companies, which handle travel needs for large corporations and

organizations.

GDSs are two-sided transaction platforms that connect airlines and travel agents for the

purchase of airfare in a single transaction over the platform. GDSs provide a variety of services

to travel agencies, such as facilitating comparison shopping and providing access to many flight

and fare options. Between 2006 and 2012, US Airways contracted with Sabre, Travelport and

Amadeus for GDS services. During that period, Sabre held between a forty-nine and fifty-two

percent share of TTA bookings through GDSs in the United States. Travel agencies contract with

GDSs for access to their services and can receive incentive payments for their use of a particular

provider’s GDS. During the negotiations, travel agencies try to obtain increased incentives and

threaten to switch to other GDSs. GDS incentives paid to travel agencies have increased.

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One of US Airways’ experts, Professor Joseph Stiglitz, proposes two relevant antitrust

markets for US Airways’ claims. First, he proposes a market consisting only of Sabre GDS

services connecting airlines to TTAs. Second, he proposes a broader market encompassing all

GDS services connecting airlines to TTAs.

Airlines, like US Airways, typically pay Sabre a booking fee for each booking made

through Sabre’s GDS. US Airways challenges two contracts that it entered into with Sabre in

2006 (the “2006 Contract”) and 2011 (the “2011 Contract”). US Airways’ § 1 claim arises out of

the two contracts, and its § 2 claim is based on the contracts and other alleged anticompetitive

behavior by Sabre. US Airways challenges terms in the contracts that require US Airways (1) to

offer the same content through Sabre’s GDS as it offers through other booking channels, (2) to

provide content to Sabre at prices not to exceed prices charged on other booking channels, (3) not

to steer customers to book on its own website or induce travel agents to bypass Sabre’s GDS and

(4) not to impose a surcharge on tickets booked through Sabre.

US Airways also challenges alleged monopoly power exercised by Sabre in the GDS

market based on the following facts in addition to a litany of disputed facts. No GDS competitor

has successfully entered the market in the last thirty years. Sabre has not innovated on

technology and uses technology its customers call outdated and calcified. Sabre’s economic

profits far exceed the economic profits of its comparator firms and main customers. Sabre

maintains a net fee that is far above the competitive level. Sabre charges airlines different per-

booking fees that are not explained by differences in the cost of providing the service.

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II. DAUBERT MOTION

Sabre moves to exclude the testimony of Dr. Rosa Abrantes-Metz concerning her

estimates of Plaintiff’s overcharge and lost profits damages. For the reasons below, Sabre’s

motion is denied.

A. Daubert Legal Standard

Federal Rule of Evidence 702 governs the admissibility of expert testimony. The rule

provides:

A witness who is qualified as an expert by knowledge, skill, experience, training,

or education may testify in the form of an opinion or otherwise if [] (a) the expert’s

scientific, technical, or other specialized knowledge will help the trier of fact to

understand the evidence or to determine a fact in issue; (b) the testimony is based

on sufficient facts or data; (c) the testimony is the product of reliable principles and

methods; and (d) the expert has reliably applied the principles and methods to the

facts of the case.

Fed. R. Evid. 702. District courts play a “‘gatekeeping’ function” under Rule 702 and are

“charged with ‘the task of ensuring that an expert’s testimony both rests on a reliable foundation

and is relevant to the task at hand.’” In re Mirena IUS Levonorgestrel-Related Prods. Liab. Litig.

(No. II), 982 F.3d 113, 122-23 (2d Cir. 2020) (quoting Daubert v. Merrell Dow Pharms., Inc.,

509 U.S. 579, 597 (1993)). A Rule 702 inquiry focuses on three issues: (1) whether a witness is

qualified as an expert, (2) whether the witness’s “opinion is based upon reliable data and

methodology” and (3) whether “the expert’s testimony (as to a particular matter) will assist the

trier of fact.” Nimely v. City of N.Y., 414 F.3d 381, 397 (2d Cir. 2005) (internal quotation marks

omitted); accord In re Namenda Indirect Purchaser Antitrust Litig., 338 F.R.D. 527, 543

(S.D.N.Y. 2021). “[A] slight modification of an otherwise reliable method will not render an

expert’s opinion per se inadmissible.” United States v. Jones, 965 F.3d 149, 160 (2d Cir. 2020).

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The party proffering the expert bears the burden of establishing Rule 702’s admissibility

requirements by a preponderance of the evidence. Id. at 161.

B. Daubert Analysis

1. Damages Models

Sabre argues that all of the damages models should be excluded because Dr. Abrantes-

Metz’s calculations do not comport with the but-for world proffered by Professor Stiglitz.

Professor Stiglitz opines that a competitive market would not emerge until five years after the

purportedly anticompetitive terms in the contract between US Airways and Sabre are removed.

Sabre contends that Dr. Abrantes-Metz’s damages model should therefore account for the five-

year delay in the emergence of a competitive market. Sabre’s argument is incorrect because

Dr. Abrantes-Metz’s model should be designed to contemplate a world in which there never was

any anticompetitive conduct, rather than a point in time when anticompetitive conduct ceased.

See Sonterra Cap. Master Fund Ltd. v. Credit Suisse Grp. AG, 277 F. Supp. 3d 521, 563

(S.D.N.Y. 2017) (noting that “computation of antitrust damages always entails the reconstruction

of a hypothetical market absent the unlawful manipulation”); see also Bigelow v. RKO Radio

Pictures, 327 U.S. 251, 264 (1946) (stating that damages in monopolization under the Sherman

Act are calculated “by comparison of profits, prices and values as affected by the [unlawful act],

with what they would have been in its absence under freely competitive conditions”).

2. Overcharge Estimates

There is no basis for excluding Dr. Abrantes-Metz’s overcharge damages estimates.

Sabre makes two arguments for excluding Dr. Abrantes-Metz’s overcharge estimates: (1) the

estimates do not account for the relative price sensitivity of airlines and travel agents when

opining that the travel agent incentives in the but-for world would be significantly lower than in

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the actual world and (2) the estimates do not account for how pricing changes in the but-for world

would impact demand for Sabre’s GDS platform. These arguments are unavailing.

As to price sensitivity, contrary to Sabre’s assertions, Dr. Abrantes-Metz analyzed the

relative price sensitivities of airlines and travel agents. In her reply report, she explained her

basis for concluding that, in the competitive world, airlines would have increased price elasticity

for Sabre’s services. Dr. Abrantes-Metz further explained at her deposition that travel agents

would be more inelastic in comparison to airlines. Sabre expresses the additional concern that

Dr. Abrantes-Metz did not quantify the price sensitivities. But Sabre points to no support for its

argument that price sensitivities must be quantified, or that quantification is even possible given

the information available to Dr. Abrantes-Metz. One of Sabre’s experts testified that the

quantification of elasticities is something that is “[i]n general . . . very hard to do” and relied on

the same style of theoretical discussion of elasticities for which Sabre now challenges

Dr. Abrantes-Metz. Sabre further argues that Dr. Abrantes-Metz’s opinion contradicts the

Supreme Court’s opinion in Amex II. Sabre plays fast-and-loose with whether they are quoting

the Supreme Court’s opinion in Amex II or academic articles specific to the credit card market

quoted by the Supreme Court in that case. To the extent Sabre quotes the legal holdings of Amex

II, Sabre points to no basis for finding that the sensitivities of the cardholders and merchants on

either side of the two-sided market at issue in Amex II apply wholesale to the travel agents and

airlines on either side of the two-sided market at issue in this case, such that the holdings and

findings of Amex II all apply to this case. The dispute between the parties about the relative price

sensitivities on each side of Sabre’s platform is a question best left for the jury.

As to Dr. Abrantes-Metz’s failure to account for demand in her overcharge analysis, Sabre

does not identify any case law or other support for its argument that overcharge damages

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estimates should account for demand. Sabre argues that failing to account for demand permits

Plaintiff to claim overcharges for bookings that would not have occurred in the but-for world.

But the point of an overcharge estimate is to account for damages incurred from bookings that

occurred in the actual world based on an estimate of the price difference between the actual world

and the but-for world. See Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 424 F.3d 363,

374 (3d Cir. 2005) (defining overcharge as “the difference between the price paid for goods

actually purchased and the price that would have been paid absent the illegal conduct”); Tawfilis

v. Allergan, Inc., No. 15 Civ. 307, 2017 WL 3084275, at *11 (C.D. Cal. June 26, 2017)

(“Antitrust law has traditionally not required direct purchasers to determine how much of the

relevant product they would have purchased in the but-for world to establish antitrust impact.”).

Had Dr. Abrantes-Metz’s overcharge estimate accounted for bookings that did not occur in the

actual world, there would be an issue with the model.

3. Lost Profits Estimates

There is no basis to exclude Dr. Abrantes-Metz’s lost profits estimates. Sabre offers three

reasons for excluding Dr. Abrantes-Metz’s lost profits estimates: (1) like the overcharge

estimates, the lost profits estimates do not account for relative price sensitivities, (2) the model

underlying the lost profits estimates implies increased prices and costs to travel agents and

travelers, but ignores these costs in modeling demand for air travel and (3) the model does not

account for opportunity costs. These arguments are unavailing.

As stated above, Dr. Abrantes-Metz considered price sensitivities. Sabre does not make

any independent argument regarding price sensitivities and the lost profits model. Sabre’s price

sensitivities argument is unavailing as to lost profits for the same reason it is unavailing as to

overcharges.

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As to demand for air travel, Dr. Abrantes-Metz testified why she believes the several

dollar increase to travel agents’ costs would not impact demand. Dr. Abrantes-Metz stated that it

would be unlikely that cost would get passed through to customers; and even if it were, (1) the

costs are very low compared to the average price of the fare and (2) business customers tend to be

price inelastic, so any impact on demand would be trivial. Ultimately, Sabre’s arguments on this

issue stem from disagreements about the impact of Dr. Abrantes-Metz’s model -- but those

concerns go to the weight and not the admissibility of her opinion.

As to opportunity costs, Sabre argues that the lost profits estimates disregard opportunity

costs in contravention of Dr. Abrantes-Metz’s own stated methodology. US Airways

persuasively argues that Dr. Abrantes-Metz’s included opportunity costs in her model. The issue

here is whether Dr. Abrantes-Metz was correct to include opportunity costs as a cost in the profit

function or whether, as Sabre contends, she should have treated them as an actual cost subtracted

from revenues. The parties’ dispute goes to the weight of the opposing approaches rather than

admissibility. Accordingly, Sabre’s motion to exclude Dr. Abrantes-Metz is denied.

III. SUMMARY JUDGMENT MOTION

Sabre presents its motion for summary judgment addressing three distinct arguments:

(1) the statute of limitations, (2) the allegedly speculative nature of the link between injury and

damages and (3) insufficient evidence of monopoly power. To the extent that Sabre seeks

summary judgment based on the exclusion of Dr. Abrantes-Metz report and testimony, that

argument is rejected because the report and testimony are not excluded. For the reasons that

follow, Sabre’s motion for summary judgment is denied.

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A. Applicable Law

1. Summary Judgment

Summary judgment is proper where the record establishes that “there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). A genuine dispute exists “if the evidence is such that a reasonable jury could return

a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);

accord Electra v. 59 Murray Enters., 987 F.3d 233, 248 (2d Cir. 2021). “Only disputes over facts

that might affect the outcome of the suit under the governing law will properly preclude the entry

of summary judgment.” Liberty Lobby, 477 U.S. at 248; accord Saleem v. Corp. Transp. Grp.,

854 F.3d 131, 148 (2d Cir. 2017). Courts must construe the evidence and draw all reasonable

inferences in the non-moving party’s favor. Electra, 987 F.3d at 248. When the movant properly

supports its motion with evidentiary materials, the opposing party must establish a genuine issue

of fact by citing to particular parts of materials in the record. Fed. R. Civ. P. 56(c)(1)(A).

2. Sherman Act

Section 1 of the Sherman Act provides, “Every contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with

foreign nations, is declared to be illegal.” 15 U.S.C. § 1. Restraints of trade are limited to

“unreasonable restraints.” US Airways, Inc., 938 F.3d at 54 (citing State Oil Co. v. Khan, 522

U.S. 3, 10 (1997)). Some restraints of trade are per se unreasonable. Id. If a restraint of trade is

not per se unreasonable, then it is analyzed under the rule of reason, which requires, at its first

step, the identification of the relevant market. Id. at 55. “Market definition is ordinarily a deeply

fact-intensive inquiry.” Id. (internal quotation marks omitted).

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Section 2 of the Sherman Act makes illegal the monopolization or attempt to monopolize

“any part of the trade or commerce among the several States.” 15 U.S.C. § 2. “To establish a

violation of § 2, plaintiffs must prove that defendants possessed monopoly power, and willfully

acquired or maintained that power in the relevant market.” Geneva Pharms. Tech. Corp. v. Barr

Labs. Inc., 386 F.3d 485, 495 (2d Cir. 2004); accord Charych v. Siriusware, Inc., 790 F. App’x

299, 302 (2d Cir. 2019) (summary order).

B. Analysis

1. Statute of Limitations

In Count II of the Fifth Amended Complaint, US Airways alleges that Sabre unlawfully

maintained monopoly power in violation of § 2 of the Sherman Act, through the contractual

constraints that are the subject of Count 1 as well as other anticompetitive conduct. US Airways

seeks damages it suffered during the four years preceding the filing of this action, i.e., from April

21, 2007, to the end of 2012. Sabre moves for summary judgment excluding any damages arising

out of the 2006 Contract, i.e., those incurred before the 2011 Contract became effective on

February 23, 2011. The motion is granted. US Airways’ damages arising out of the 2006

Contract are time-barred, but damages arising from other anticompetitive conduct are not

precluded.

Under the Sherman Act’s statute of limitations, damages are recoverable if a plaintiff files

suit within four years after a cause of action accrues. 15 U.S.C. § 15b. “Generally, a cause of

action accrues and the statute begins to run when a defendant commits an act that injures a

plaintiff’s business.” Zenith Radio Corp. v. Hazeltine Rsch., Inc., 401 U.S. 321, 338 (1971). But

if a defendant is engaged in a continuing antitrust violation, a subsequent “‘overt act that is a part

of the violation and that injures the plaintiff,’ e.g., each sale to the plaintiff, ‘starts the statutory

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period running again, regardless of the plaintiff’s knowledge of the alleged illegality at much

earlier times.’” Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997) (quoting 2 P. Areeda & H.

Hovenkamp, Antitrust Law ¶ 338b (rev. ed. 1995) [hereinafter “Areeda”]); US Airways, Inc., 938

F.3d at 68. For example, in Hanover Shoe, the Supreme Court treated the defendant’s lease-only

policy and refusal to sell its shoe-manufacturing machinery as an ongoing act of monopolization

and held that the statute of limitations began anew each time the defendant refused to sell. See

Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 502 n.15 (1968). The plaintiff

was entitled to recover damages incurred during the four years prior to bringing suit, even though

the plaintiff had been subjected to the policy decades earlier. Id. In Hanover Shoe, both the

actionable conduct (refusal to sell) and resulting damage were required to have occurred within

the limitations period. The continuing violation doctrine “generally does not permit the plaintiff

to recover for the injury caused by old overt acts outside the limitations period.” Klehr, 521 U.S.

at 189.

The Second Circuit in Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir.

1979), recognized an exception to this general rule requiring conduct within the limitations

period, stating: “We hold, therefore, that a purchaser suing a monopolist for overcharges paid

within the previous four years may satisfy the conduct prerequisite to recovery by pointing to

anticompetitive actions taken before the limitations period.” Id. at 296. The court distinguished

between plaintiffs who are competitors and plaintiffs who are purchasers. “Although the business

of a monopolist’s rival may be injured at the time the anticompetitive conduct occurs, a

purchaser, by contrast, is not harmed until the monopolist actually exercises its illicit power to

extract an excessive price.” Id. at 295. The court reasoned that a defendant’s ongoing use of its

ill-gotten monopoly power forecloses any “claim on the repose that a statute of limitations is

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intended to provide” and concluded that “[t]he purchaser’s cause of action, therefore, accrues

only on the date damages are suffered.” Id. (internal quotation marks omitted).

Neither Hanover Shoe nor Berkey Photo involved an anticompetitive contract as the

instant case does. In the prior appeal of this case, the Second Circuit, following the Sixth, Eighth

and Ninth Circuits, held that a defendant does not commit an overt act restarting the statute of

limitations each time a plaintiff pays a defendant a supracompetitive price pursuant to an

anticompetitive contract to which they are a party. US Airways, Inc., 938 F.3d at 68-69. Instead,

the performance of the contract is merely a “manifestation” of the prior act of making the

contract. Id. at 69. Accordingly, the Second Circuit expressly held “that each supracompetitive

price charged to US Airways by Sabre pursuant to the 2006 contract was not an overt act of its

own, but a manifestation of the prior overt act of entering into the 2006 contract. That act, which

began the running of the statute of limitations, was performed more than four years prior to the

filing of this action.” Id.

That holding, which affirmed the limitation on damages US Airways can recover on its

§ 1 claim, is equally applicable to the § 2 monopoly claim. Although the Second Circuit did not

mention Berkey Photo or the § 2 claim in its statute of limitations analysis, nothing in the Court’s

analysis or holding placed any significance on the difference between the two Sherman Act

provisions. To the contrary, the Second Circuit’s basis for distinguishing Hanover Shoe was not

that it involved an ongoing monopoly, but rather that its claims did not arise out of a contract to

which Plaintiff and Defendant were parties. Id. at 68. This interpretation -- that each contractual

payment by US Airways was not an overt act for purposes of restarting the statute of limitations

-- is also in line with the law of other courts. See Areeda, ¶ 320c4 (rev. ed. 2022) (collecting

cases and stating, “[t]he courts consistently hold that if the monopoly is created by a single

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identifiable act and is not perpetuated by an ongoing policy, the statute of limitation runs from the

time of commission of that act, notwithstanding that high prices may last indefinitely into the

future.”). Accordingly, US Airways cannot recover damages from Sabre’s alleged conduct to

maintain monopoly power if that conduct was merely the performance of the 2006 Contract.

US Airways can seek § 2 claim damages arising from other monopolizing conduct,

provided that the resulting injury occurred during the four years preceding the filing of the

lawsuit. See Berkey Photo, 603 F.2d at 295-96. US Airways contends that Sabre engaged in such

anticompetitive conduct beginning in or about 2004 to 2012, including imposing retaliatory costs

on airlines that attempted to circumvent Sabre’s GDS, entering into exclusionary contracts with

travel agents and thwarting potential competitors’ entry into the GDS market. This conduct is in

addition to and independent of the 2006 Contract. Plaintiff argues that if Sabre had not engaged

in this conduct, then US Airways would have been able to move its bookings to alternative

distribution channels. To the extent US Airways can prove that (1) Sabre engaged in willful

conduct to acquire or maintain monopoly power independent of the 2006 Contract, (2) Sabre had

monopoly power at the time of the conduct and (3) the conduct resulted in damages within the

four-year statutory period, then US Airways can recover those damages under § 2 of the Sherman

Act consistent with its statute of limitations.

2. Nature of Injury and Damages Estimate

Sabre argues that the causal link between Sabre’s conduct and US Airways’ injury and

damages is impermissibly speculative warranting summary judgment in Sabre’s favor. This

argument is unavailing.

Sabre’s speculation argument is based on a mischaracterization of Professor Stiglitz’s

report and testimony. Professor Stiglitz discussed many possible changes to the market that

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would emerge in the absence of the alleged anticompetitive conduct by Sabre. Sabre’s

memorandum of law in support of its motion for summary judgment cherry-picks aspects of

Professor Stiglitz’s expert opinion to construct a purported causal chain proposed by US Airways,

then attacks that construction as speculative. That causal chain is a creation of Sabre, not US

Airways. Instead, Professor Stiglitz testifies to multiple ways that a competitive market would

result from the termination of Sabre’s allegedly anticompetitive conduct, with different changes

by Sabre leading to different changes by the other actors in the two-sided market. The jury can

credit any of the potential pathways to market change hypothesized by Professor Stiglitz to find

that a more competitive market could emerge in the absence of Sabre’s purportedly

anticompetitive conduct. As before, “[t]he expert [report and] testimony of Professor Stiglitz . . .

is evidence from which a reasonable jury could conclude that[,] but for [the alleged

anticompetitive conduct], price competition would be unrestricted, and the Sabre fee would

decrease as a result of market forces.” US Airways, Inc. v. Sabre Holdings Corp., 105 F. Supp.

3d 265, 287 (S.D.N.Y. 2015).

Sabre’s argument that the causal link is too speculative because it involves the conduct of

third parties is unsupported. The third parties are all direct participants in the two-sided market.

There is no reason to believe that US Airways could model changes to the market without

hypothesizing about those third parties’ conduct. Because this case concerns a two-sided market,

it is well within reason for considerations of market players to involve more third parties than a

typical antitrust case. Further, the hypotheses are not wholly unfounded here where Plaintiff has

proffered evidence that at least some third parties (such as Air Canada and American Airlines)

took action to circumvent or challenge Sabre’s allegedly anticompetitive contractual terms, and

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that other third parties (such as G2 and Farelogix) attempted to compete with Sabre and were

allegedly thwarted by Sabre.

3. Proof of Monopoly Power

a. Sabre-Only Product Market

Based on the evidence, a reasonable jury could find that there is a Sabre-only product

market. Sabre argues no Sabre-only market exists because there are other GDSs, all GDSs

provide interchangeable transactions to airlines on one side of the market and all GDSs compete

for travel agency customers on services and price on the other side of the market. For the reasons

below, Sabre’s arguments are unpersuasive.

“‘[A] single brand of a product or service’ may ‘be a relevant market under the Sherman

Act’ if no substitute exists for that brand’s products or services.” US Airways, Inc., 938 F.3d at

66. The question is whether the Sabre platform is interchangeable with other booking

alternatives, including the other GDSs. Id.

Here, US Airways presents evidence that, from the airlines’ perspectives, Sabre’s

platform is not interchangeable. Part of that evidence is based on the “single-homing” activity on

the travel agent side of the market. A reasonable jury could conclude that Sabre maintained a

lock on the travel agent side of the market and that, from the perspective of US Airways and other

providers, the services of the GDS platforms were not reasonably interchangeable because a

contract with another GDS would not provide access to the market of Sabre travel agent

purchasers locked in on the other side of the Sabre GDS platform. This view is supported by the

analysis of Professor Stiglitz, which shows that airlines would not switch to a different GDS in

response to a slight GDS price increase.

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US Airways similarly presents evidence that on the travel agent side of the market,

Sabre’s product was not interchangeable. First, Professor Stiglitz conducted an analysis of the

cross-elasticities of demand, which showed that there would be insufficient substitution to GDS

or non-GDS alternatives if Sabre imposed a significant non-transitory increase in price of 5%.

Sabre attempts to discredit Professor Stiglitz’s opinion by pointing to deposition testimony that

travel agents were “willing to switch.” That travel agents were willing to switch is disputed,

despite Sabre’s averment to the contrary. US Airways presents evidence that the average length

of a relationship between a travel management company and a GDS is nineteen years, that

Sabre’s renewal rates were 98.9% and 99.9% in 2010 and 2011 respectively and that despite

threats to switch, travel agent switching rarely occurred.

Second, US Airways also presents evidence that there are “no viable substitutes available

to the travel agents who use Sabre’s services [because] travel agents are locked into the Sabre

platform because of the prohibitively high costs of switching to alternative booking channels and

incentive payment structures.” US Airways, Inc., 938 F.3d at 66. For example, US Airways

presents evidence that TTA locations use only one GDS and rarely switch and that many factors

impede travel agent switching, including long-term contracts, non-linear incentive structures and

user-unfriendly interfaces. Sabre does not contest this evidence, but instead deems it immaterial

because there is evidence of competition between GDSs for multi-year contracts.

Third, Sabre’s assertion that there is undisputed evidence of competition on the travel

agent side is ill-founded. Sabre contends that, because incentives for travel agents increased,

there was competition in the GDS services market, and therefore any other evidence that there

was no competition is immaterial. Professor Stiglitz disputes that the increase of incentives is

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evidence of competition. As a result, the existence of competition in the travel agent side of the

market is in dispute, and it is up to a jury to weigh the evidence.

Sabre’s reliance on In re American Express Anti-Steering Rules Antitrust Litigation, 361

F. Supp. 3d 324 (E.D.N.Y. 2019) (“Amex Anti-Steering”), is misplaced. In Amex Anti-Steering,

the District Court granted partial summary judgment and rejected a market limited to a single

platform because, on one side of the market, cardholders treated American Express’s credit cards

interchangeably with other credit cards; and the only reason merchants on the other side of the

market could not do the same was because of contracts they voluntarily entered with American

Express. Id. at 345-47. The merchant plaintiffs did “not ma[k]e a legally permissible allegation

that Amex possessed pre-contract market power that compelled [the merchants’] acceptance” of

the contracts. Id. at 347. Here, in contrast, Plaintiff offers evidence from which a reasonable jury

could conclude that Sabre had sufficient market power to force US Airways to accept the

anticompetitive contracts.

b. GDS Services Market

US Airways offers significant evidence from which a reasonable jury could find that

Sabre exercised monopoly power in the GDS market, precluding Sabre’s request for summary

judgment on this issue. This evidence includes (i) net pricing that has approached double the

competitive level, (ii) excessive profits, (iii) a flow of payments from GDSs to travel agents that

would not exist in a competitive market, (iv) ability to price discriminate by charging airlines

different fees, (v) maintenance of a high, stable market share while selling obsolete technology,

(vi) retaliatory conduct against airlines that promote innovation, (vii) structural barriers to entry,

(viii) artificial barriers to entry, (ix) the failure of even one GDS competitor to emerge within the

last thirty years and (x) that Sabre had between a forty-nine and fifty-two percent share of TTA

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bookings through GDSs in the United States from 2006 to 2012. See generally Geneva Pharms.

Tech. Corp., 386 F.3d at 500 (“Monopoly power is ‘the power to control prices or exclude

competition’” and can be proven “directly through evidence of control over prices or the

exclusion of competition, or it may be inferred from a firm’s large percentage share of the

relevant market.”); FTC v. Shkreli, No. 20 Civ. 706, 2022 WL 135026, at *32 (S.D.N.Y. Jan. 14,

2022) (same).

US Airways also points to evidence that Sabre controls between forty-nine and fifty-two

percent of the market for TTA bookings through GDSs in the United States. This is enough to

support a finding of monopoly power when combined with other evidence. See Broadway

Delivery Corp. v. United Parcel Serv. of Am., Inc., 651 F.2d 122, 129 (2d Cir. 1981)

(“Sometimes, but not inevitably, it will be useful to suggest that a market share below 50% is

rarely evidence of monopoly power, a share between 50% and 70% can occasionally show

monopoly power, and a share above 70% is usually strong evidence of monopoly power.”);

Hayden Publ’g Co., Inc. v. Cox Broad. Corp., 730 F.2d 64, 69 n.7 (2d Cir. 1984) (“[A] party may

have monopoly power in a particular market, even though its market share is less than 50%.”);

Sitts v. Dairy Farmers of Am., Inc., 417 F. Supp. 3d 433, 477 (D. Vt. 2019) (“[M]arket share in

the range of 50% is evidence of monopsony power . . . .”).

Sabre responds that US Airways does not have evidence that Sabre has the power to

exclude “all competition generally” because two of Sabre’s competitors still maintain a share of

the market. Sabre erects too high a bar. Direct evidence of monopoly power does not require

evidence of the exclusion of all competition. Sabre argues that US Airways lacks the “rare” and

“unambiguous” direct evidence of monopoly power, but the case Sabre cites holds that control of

less than 50% of the market “would not automatically preclude a finding of monopoly power by a

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jury entitled to assess monopoly power on the record as a whole.” Broadway Delivery Corp., 651

F.2d at 130; see also Epic Games, Inc. v. Apple Inc., No. 20 Civ. 5640, 2021 WL 4128925, at *95

(N.D. Cal. Sept. 10, 2021) (“A share between 52 and 57 percent . . . is enough to permit the Court

to evaluate the state and durability of the market.”); In re Payment Card Interchange Fee &

Merch. Disc. Antitrust Litig., 562 F. Supp. 2d 392, 400 (E.D.N.Y. 2008) (“[A] finding that

MasterCard’s market share is less than 30 percent would not, in any event, foreclose the

possibility that the Individual Plaintiffs may succeed on their Section 2 claims.”).

Sabre may be correct that at least some of the evidence Plaintiff claims to be direct

evidence is indirect. But the distinction between direct and indirect evidence is unimportant here

given the volume of evidence Plaintiff has identified combined with evidence of Sabre’s market

share, all of which could support a jury’s finding that Sabre exercised monopoly power. US

Airways has satisfied its burden of producing evidence that Sabre controlled prices or excluded

competition. See Shkreli, 2022 WL 135026, at *32 (“A plaintiff can establish a defendant’s

monopoly power either ‘directly through evidence of control over prices or the exclusion of

competition, or it may be inferred from a firm’s large percentage share of the relevant market.’”).

Whether the control or exclusion is as Sabre states, “at most” because the GDS services market is

an oligopoly controlled by Sabre, Travelport and Amadeus, or because of illegal monopolistic

conduct by Sabre, is a matter left for the jury. See Geneva Pharms. Tech. Corp., 386 F.3d at 500-

01 (holding that whether circumstances were a substantial impediment to competition “is a matter

left for a jury”).

Sabre argues that US Airways’ monopolization claim against Sabre fails because US

Airways alleges that Sabre’s two competitors also have monopoly power. This argument is

unavailing. Sabre does not identify any controlling case law to suggest that an entity cannot be

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liable under § 2 for exercising the power to control prices or exclude competition in a market

because some other entity also exercises the same power in that market. An “antitrust

defendant’s unlawful conduct need not be the so/e cause of the plaintiffs’ alleged injuries,” so

long as the conduct was a “substantial or materially contributing factor in producing that injury.”

In re Publ’n Paper Antitrust Litig., 690 F.3d 51, 66 (2d Cir. 2012) (internal quotation marks

omitted). In re Inclusive Access Course Materials Antitrust Litigation, No. 20 Civ. 6339, 2021

WL 2419528, at *14 (S.D.N.Y. June 14, 2021), does not support Sabre’s argument because that

case involved § 2 claims against three defendants and allegations of monopoly power based on

the three defendants’ shared control of the market. /d. Here, US Airways’ § 2 claim is not based

on multiple entities’ shared control of the market. US Airways has proffered sufficient evidence

for a reasonable jury to conclude that Sabre had monopoly power.

IV. CONCLUSION

For the reasons stated above, Sabre’s Daubert motion is DENIED, and Sabre’s motion for

summary judgment is GRANTED IN PART and DENIED IN PART. Sabre’s request to exclude

any damages arising out of the 2006 Contract, i.e., those incurred before the 2011 Contract

became effective on February 23, 2011, is GRANTED, but damages arising from other

anticompetitive conduct are not precluded. The motion for summary judgment is otherwise

DENIED. Sabre’s request for oral argument is DENIED AS MOOT.

The Clerk of Court is respectfully directed to strike the Opinion at Dkt. No. 1129.

Dated: April 15, 2022

New York, New York

UNITED STATES DISTRICT JUDGE

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