DOJ’s failure to prove its "Killer Acquisition" claim in Sabre/Farelogix and parallels to other recent government merger litigation losses

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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 government enforcers?