On August 20, 2019, the U.S. Department of Justice (DOJ) sued to
block Sabre Corporation (Sabre), a provider of a global distribution
system (GDS) to travel agents, from acquiring Farelogix, Inc.
(Farelogix), an IT provider to airlines. DOJ advocated a killer acquisition
theory, portraying Sabre as a dominant firm intent on “tak[ing] out”
Farelogix, a “disruptive competitor that has been an important source of
competition and innovation.’” Yet after a full trial, Judge Leonard P.
Stark of the U.S. District Court for the District of Delaware roundly
rejected the notion that Sabre was buying Farelogix simply to snuff out a
nascent competitor. Tasked with predicting future competitive
conditions, he instead reached the opposite conclusion: that Sabre
“intend[ed] to continue offering [Farelogix’s product] by integrating it
into the Sabre GDS platform,” which would allow Sabre “to better meet
the demands of airlines and travel agencies.” Thus, far from diminishing
innovation, Judge Stark believed that the merger “may well promote” it.
Where did the DOJ’s theory go wrong? And what parallels can be
drawn between Sabre and other recent merger litigation losses by