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Airline Passengers' Post-Merger Challenge Dismissed
Description Customers of Northwest Airlines in Minneapolis sued, contending that the 1986 merger of Republic into Northwest had lessened competition resulting in higher than average fares. Court dismissed suit because no post-acquisition anticompetitive activity was shown.
Topic Antitrust
Key Words Lessening Competition
C A S E   S U M M A R Y
Facts Passengers who used Northwest Airlines out of the Minneapolis-St. Paul (MSP) airport sued Northwest for violating Section 7 of the Clayton Act for its 1986 purchase of Republic Airlines, contending that the merger had "the effect of substantially lessening competition in the relevant markets," especially MSP, which, they claim, has higher-than-average fares because of the large market share of Northwest at MSP. The merger had been approved by the Department of Transportation, but did not have antitrust immunity.
Court Decision Case dismissed. There are no cases "in which a mere 'holding' of acquired stock or assets has been sufficient for a section 7 claim independent of a challenge to the initial acquisition. The court concludes that there must be a holding and anticompetitive use of the stock to maintain a challenge for post-acquisition conduct." There is no "post-acquisition use when Republic ceased to exist effective of the merger and all Republic stock was turned in and extinguished."
Citation Midwestern Machinery Co. v. Northwest Airlines, Inc.,, 1998 WL 12150 (D. Minn.)
990 f. Supp. 1128 (D. Minn., 1998)

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