Antitrust. Enforcement. after Deregulation

III fly because it releases my mind from the tyr­anny of petty things. . . . Я

Antoine de Saint-Exupery

ne of the recognized purposes of govern­ment is to protect the “public interest” under its constitutional authority to promote the general welfare. A full and complete definition of the term “public interest” has proven to be elu­sive. The concept of the public interest has, for example, been used to justify both the regulation of the airline industry and its later deregulation. It was invoked to justify the original restrictive regulation of the railroads in 1887 (The Interstate Commerce Act), and later used to justify finan­cial assistance to the same railroads.

The nature of the activity deemed by soci­ety, or the government specifically, to be either in the public interest or against the public interest is often a function of the “times” or of the phi­losophy of the administration that happens to be currently in charge of running the government.

In this chapter we will look at how the government attempts to protect the “public interest,” specifically in the air transportation industry. To do this we will have to review the history of Congressional legislation which makes it unlawful for the private sector or any business
enterprise to prevent or limit competition. These laws are referred to generally as “antitrust” leg­islation, which is in the public interest because competition in the business sector is beneficial to the public, resulting in cheaper and more avail­able products and services.

When this legislation was enacted by the Congress, the aviation industry did not exist. It was enacted primarily to curb abuses by the rail­road industry during the late 19th and early 20th centuries. When the commercial airline industry came along, the courts had to decide whether or how the antitrust statutes would or should be applied to airline transportation.

Once Congress had enacted this type of legislation in the form of statutes, it fell to the executive branch of government to enforce the law. The executive branch does this through its departments and agencies. Jurisdiction over the airlines has bounced around in the executive branch of government, being first exercised by the Department of Commerce, then the agency known as the Civil Aeronautics Board. After deregulation of the airlines in 1978, jurisdiction swung between the newly formed Department of Transportation (DOT) and the Department of Justice (DOJ) and, finally, today, is shared by these two departments and their agencies.

The chronological sequence of statutory law and the agencies that have enforced that law are as follows:

1, The Sherman Antitrust Act

2, The Clayton Antitrust Act

3, The Department of Commerce and its agencies

4, The Civil Aeronautics Board

5, The Department of Transportation

6, The Department of Justice

7, A combination of DOT and DOJ