Judgment of the Tribunal on the application of Sabre Corporation (“Sabre”) for review under section 120 of the Enterprise Act 2002 (“the Act”) of the decision of the Competition and Markets Authority (“the CMA”) in its Final Report dated 9 April 2020.
In the Final Report, the CMA found that it had jurisdiction to consider the proposed merger under the Act on the basis of the share of supply test set out in section 23(2)(b). The CMA further found that the proposed merger may be expected to give rise to a substantial lessening of competition (“SLC”) in two markets: the supply of merchandising solutions to airlines and the supply of distribution solutions to airlines, both of which are worldwide markets. On that basis, the CMA decided to prohibit Sabre’s anticipated acquisition of Farelogix Inc. (“the Merger”) in its entirety.
On 1 May 2020, the parties announced that the Merger had been terminated.
By its application (“the Application”), Sabre challenged the Final Report on the following grounds:
• Ground 1: The CMA erred in law in that its Relevant Description of Services (“RDS”) is not a lawful basis on which to apply the share of supply test to two highly disparate supplies in the absence of any underlying rationale.
• Ground 2: The CMA erred in its approach to the requirement “supply in the UK”, by conflating supply to an American airline of “FLX Services” (as defined by the CMA) with a direct supply to British Airways plc.
• Ground 3: The CMA erred in its application of the share of supply test, in that it (i) misconstrued section 23 of the Act in relying upon an increment that was both hypothetical and vanishingly small, and (ii) irrationally and in error of law applied different, and inconsistent, methodologies in respect of Sabre and Farelogix and so failed to compare like with like.
• Ground 4: The CMA erred in its calculation of the total supply of RDS services in the UK by failing to apply its own definition of RDS consistently or rationally to third party providers.
• Ground 5: On a correct application of the standard of proof and a proper assessment of the evidence, the CMA could not lawfully have found a SLC in the merchandising market.
• Ground 6: The CMA’s SLC finding in relation to distribution was irrational and unsupported by the evidence.
Grounds 1 to 4 relate to the CMA’s assertion of jurisdiction over the Merger under section 23 of the Act. On 20 November 2020, Sabre informed the Tribunal that it no longer wished to pursue Grounds 5 and 6, which challenged the CMA’s findings in relation to a SLC. Accordingly, the Application was limited to the issue of jurisdiction only.
For the reasons given in the judgment, the Tribunal unanimously dismissed all four grounds of the Application.
