I'm not saying that the DOT or FAA planned to confiscate slots w/o payment.
I am saying though that the issue of ownership of slots was raised. The airlines have all argued (including AA and others not involved in the case) that slots are private property of the airlines and the US government cannot seize private property w/o compensation.
The US government has not attempted to "seize private property w/o compensation." The feds have merely demanded that US and DL relinquish some assets in order to bless an acquisition of assets that the feds have concluded may violate Section 7 of the Clayton Act.
DL and US also raised the issue of control of slots, including the ability for the owners to decide how to dispose of them if they desire. They argued that the FAA's sole role in slot controls is for safety purposes and can reduce the total number of slots but cannot specify how they are used, including whether they can be sold or transferred to other airlines.
The airlines argued (again with the support of the ATA and other US airlines not involved in the slot deal) that there is no law that exists that allows slots to be regulated on the basis of economic reasons.
There's no need for a specific law that permits "slots to be regulated on the basis of economic reasons" when the government is well within its right to demand concessions in exchange for permitting an asset acquistion that may violate Section 7 of the Clayton Act. The concessions demanded are reasonable and the attempt by US and DL to limit the recipients of the relinquished slots is offensive to consumers.
I suspect part of the reason why the DOT has been willing to settle is because there is a very real chance that they would lose the case. I also suspect that the issue of slot ownership will not be addressed.
I don't know the details of how the case will be settled but I will bet that there will be some "splitting the difference" with some amount of slots to be distributed by the airlines (DL and US) where they desire and a few will be given to the DOT where they can distribute them. Given that WN will have a fairly decent sized operation at LGA and DCA after the FL merger, I doubt if WN will get any slots which was the biggest concern of DL and US. I suspect the total number of slots to be divested will be closer to what DL and US proposed and not the DOTs demands based on the fact that the impact of LFCs in NYC is growing as a result of the FL/WN merger.
Parties to a lawsuit settle for a variety of reasons, and the risk of losing at trial is, of course, one of those reasons.
The issue in reality is access to the airports by low fare competitors, not market concentration, per se. Remember that CO controls a lot larger portion of EWR than DL has or will have at LGA or JFK. Other carriers have larger shares than CO at EWR at their hubs.
The reason for UA/CO having to give up slots at EWR as part of their merger and likely why US and DL will have to give up some slots (whether DL or US have any say in who those carriers are remains to be seen) but the principle is to ensure that there is some level of low fare carrier access to these slot controlled airports. Given WN's presence now in NYC, DL/US's original plan to give slots to a handful of smaller airlines now seems reasonable.
On this, you're simply wrong as a matter of fact and antitrust law.
BoeingBoy, as usual, is correct on this issue. It's apparent that he understands how antitrust enforcement works. The government rarely steps in and demands that companies, even monopolists, relinquish assets out of the blue. Cases like AT&T's breakup are very rare.
But when dominant companies seek to acquire even more assets that will guarantee their dominance, the government often steps in and demands asset divestitures, just like in the US/DL slot case.
Yes, WN has acquired access to LGA and DCA, but that has nothing to do with the attempt by DL and US to increase their dominance at LGA and DCA, respectively. The proposed asset swap would still increase the dominance of DL and US, which the government has the power to alter based on the Clayton Act.
You may be correct that US and DL will end up relinquishing fewer slots than the government earlier demanded and you may be correct that US and DL will be permitted to hand-pick the recipients of the slots they give up, but your pronouncements of antitrust principles quoted above are simply not correct.
