American Airlines Inc v. Travelport Limited et al

Filing 439

Appendix in Support filed by AirTrans Airways, Inc., Southwest Airlines Co. re #438 Brief/Memorandum in Support of Motion, (Attachments: #1 Exhibits A-B, #2 Exhibits C-F, #3 Exhibits G-H, #4 Exhibit I) (Brandon, Elizabeth)

qAos8 rRev"l?(ìÍìsu

Issued by the

Uxrrnp SrRrBs Dlsrrucr Counr
Norlhern
American Alrllnes, lnc.

Travelport Limited, et al.

tr

*

Foil Worth Dlvlslon

SUBPOENA IN A CIVIL CASE

v.

TO:

Texas

DISTRICT OF

Case Numbe..t 4:l 1-CV-244-Y

Souhwest Airlînes Qo.,2702 Love Field Drive, Dallas, TX
75235

YOU ARE COMMANDËD to appear in the United States Dishict court

at the place, date, and

time specified below to

testi$ in the above case.
PLACE OF TESTIMONY

COIJRTROOM

DATBANDTJME

YOU ARE COMMANDBD to appear at the place, date, and time speoified below to
in the above case.

at the

Well, Gotshal & Manges LLP,200 Crescent Gourt, Sulte 300, Dallas,

111512013 9:00 am

Tèxas 75201

tr

taking of a depositlon

YOUARECOMMANDËD to produce and permit inspection and copying oftho following documents or objeæts atthe
place, date, and time specified below (líst documents or objects):

ANDNME

N YOU ARE COMMANDED to permít inspection of the following premises at the date and time specified below.
DATEANDTIME

Any organization not a party to thls suit that is subpoenaed for the taking of a doposition shall designate one or more officers,
direotor$, or managing agents, or other porsons who c.onsent to testifi on lts behalf, and may set forth, for each person designaæd, the
matters onwhich the person will tartiþ. Federal Rules of Civil procedure,30(b)(6),
ISSTITNG

(IND¡CATB rF ATTORNBY FOR

DATE

12t21t2012
¡SSUINOOFFICER

AND PHONEI.{UMBER

George Flbbe, Yetter Coleman LLP, 909 Fannln St,, Sulte 3600, Houston, Texss, 77010, [phone]
45,
¡

Ifaclon

is pending in dÍsüict other rhsn

distict

oflssuance, stato dl¡ulct under oållo number

EXHIBIT A

SWA App. 1

PROOF OF SBRVICE
PLACB

DATE

SERVED
SERVED ON (PRINTNÀMB)

MANNEROFSERVICE

SBRVBD BY (PRINTNAME)

TITLE

DECLARATION OF SERVER
Ideclareunderpenalty ofpeduryunderthelaws oftheUnited States ofAmericathatthe foregoinginformation contained
in the Proofof Service is true and coffect.

Executed on
SIGNATUREOF SERVER

DATE

ADDRESS OF SBRVER

Rule 45, Federal Rutes

ofCivil Prncedurq Subdivisions

(o), (d), and (e), æ amended on December

SuaroB.rAs.

(o) pRoTEcfloN oF PBRsoNs SUB¡ECTTo
(l) A på¡ty oran stom¿y rðpon¡ibls frtftBi¡¡usncôild sgrvlcc ofâiübpomåÁhall
ro¡¡onsblo steps to Evold lrnpoging u¡duo burdm or upenrc on a pcrson ¡ubjcct to

l,2006:

tsk6
thst

to or allcctcd by lho ðubpocne, quadr or modlþ lho subÞoens o¡, iftho party in whoso bohalf
tho rubpoma ir isucd drows a subrlsf,tisl næd for tho uslimmy or mEt6¡sl thst
b!
oth¡n¡ri¡e mot without ußilus hsdchip Frd ûtsurûs lhåt tho p€ñff to whom thc mbpocua ir

my

upon apæl8cd conditicme.

imporo upon $o party or acomoy in broaclr of this duty u appopdato smalior, which
ìncluds. but is not l¡l¡lled b, logt êâfr-hgs á¡da rcsotebls snoñey's fæ.
(2) (A) A pc¡son c,o¡¡úurdcd to p¡oduco and pcmit irepection, copying tæting,

lnspealon unlos wunandcd to appcnr for rlapæitlon, hærlng

or

c rial.

ffiot

(d)DUîËsrNRBsPoNDlllGl0SuBloBlA,

lho cat€gßi¿r In tho d€mmd.

(B)Subjeatopuqg¡aph(dx2)oftlrhnrlo, apcnot ænnundcdtoprodü€mdpeûn¡t (B)¡fa subpocne doscnots!€clryüolbmorfomr forproduciugelætontgallystorad
hfmlìou, r prmn rrponding lo a oubpoøu musl Fmduco dF ¡nformntlon in s fom o¡
brspccdon, copying, tcúing, or rrmpling ma¡ wlttrln 14 days aûor rorvlco of lho subpocna or
boforc lho timc spccl¡od for conpliancg if süoh timo is lffi thu 14 days aftor rorulcr, sono foftìr l¡r whlch rhê poleon ordinadly mrintain¡ it or ln s Sm or fmÉ thåt ss fron8bly
siåblc
upon tho püty or sttomey dosignatorl in lfto subpoaE witlfi objæüffi to producl¡B ary or all
(C) Apßr¡on ffipondi¡g lo q ¡ubpoenanc€dnoa producalhâffi o Çlêctsot¡isdly stoFd
oflhe degignôtcd nß¡erialß orinspsctiotrol'ihoprÉùdiÉs- or to produc¡nE dæbonlc€llystorÉd
lnfcrmadon ir mo¡o thán ûno &rrll'
infom¡tionindrcfo¡morfomÉrcquesled. lfobJcctionlBmÈdô,thoputysoruingthoubpoona
(D) A ponm rcspcnding lo s ¡utpoêna nc€d not povldo dismvcry ofolerronicalty
Bhâll notb! cnlilledtoinlpecl mFy, t€st, or $ulplolhematËrials orin6pcct lhcpffiisôsoxòopa
pwruanttoanordcoflhocounbywhicÀlhorubpoonawæissuod. Ifobjætionhsbc¡nnradq,
storcd infom¡tion from oourca thrt tho persq ido¡tifræ as uot ¡æonably amosdülo bccrurc
tho puty rwhg tho ruþoena ru¡ upon notlcô to thc pcrson comtrandÊd to pmduoe, move
ât any timo for En ord6r b 6m¡Gt lho production, inspmrion, copfng, t*ling, or e*npllng,
Such an ordef to €o.npcl shrll protcct Bny pÊrron Hho ls rot r ptrty ü en offrce ofa puty tom
signifl.cmt ffipm¡o r6rultürg ftm tho inrpcction, copying tcrdn& or rampling conmandcd.
(3)
ths

(A)Ondntlynot¡ôq th€sùíby which rrubpmaw*isrued

ehall

quaslrormdifr

subpffiuiflt

(t) follr to allow reason¡blE ti¡¡o fo¡ complisnæl
(ll) rcqulr* å !6rqon ìato h not I p¡rty or m ofÊffi of E püty lo Eavel to å plüo
no¡oú¡¡n 100¡nllc¡ Êomthcplæowhorclhatpøgonrosldo3, lscmployÊdorregulülybanssÉts
ùusiness in peræn, uccparhrt, subjccttothoprcvìsiomofclauo(cXgXBXiit)ofthis rüle, such
â pôr6on tllsy in ordñ tô åttönd triEl bÞ 6mmd¡d to tåvol from my such plaø within tho
stato in wltlch tho tlal is held;
(lll) roqutroe dlsclorue ofprivilogod or othorprotectodmattû a¡rd no cl(csptlo¡
walvcr appllot; or
(iv) subjæt a potion lo unduo burde¡,
(B) lfå sübpoäs
(i) rcquiloe discloauo ofâ tado secrctorother ootfldcntial ¡csca¡ch, dsvllopmônt,

ü

or

æmrclrt

lnfomaÉo4 or

the
a cloim fhnt it ir privilogod
or $bj¿ot ûô pñtc{tlon ar ülÉl.pr€puaüon natodEh, thg otå¡m rhall bc nrødo oxprossþ and
¡hrll bo iup[ôrÎêd by â dèscdpdon of thÊ naftr€ oftì6 dmurndlts, communlcalimr, or tlrlngs
not proifuc<d that ir rufürio¡t lo cnsblo tfto demandlng prrty to contc¡t ths clai¡n
(B) Ifinforo¡lion ls produccd lfl r6sponË€ to s aubpoeu thst ls eubJect to I clu¡m of
prlvllcgc or ofprotsctíon ü trlål-pr.påratlon mstcr¡al, lhoptrBonnaling thocloim nry uotiS
my püly thrt ¡e06lvod tho infumstim ofths claim md t[¡ broì¡ for ít. Afer bdng lotiÊcd,
ô pdtty must FoIllpüy f€tum¡ scqúßEf, ot dastqr thè 9pÊdflÇd Infoflnåtion and any copies it
hæ and may not uro or disclo¡o tho info¡fistion until tho slaim ie rorolved. A rccoiving parry
rnBy promptly pr€sônt tho lnfÉmaüon lo lho cor¡l undor ss¡l fo¡ a dolèffiination ofthc clÊim,
If th? r66lvln8 !üty dlmlosed th¡ lnfomtlon blfon bolng nodfiod lt must toko rcesonaùlc
6teps ta iodsvo it, fio porson who poducod ths lnfbmEdon suat prosowo tho inlbnnation
Dndl thËóldm ¡s r6Ãolved.

(ii) requlror

dl¡closu¡o of an unrohinsd oxpo.t's opìnion or information nol
dosrrtbhg ryec¡f¡ccilentó oroccu$encer in dtßË¡to and rôrulting from lha ôxpsn'r sNdyriladB
not at thê rÈqwÉt of uy palty, o¡
(iii) rcqukor a præn who is nu rparty oran oficor of ! lrty to imur Eubslanli€l
expcneo to twol mom ùen 100 nllés to anond tdÉl, thooounmay, to Fotoct a p8ráon rubJect

(c) CONfEMrr. Fstlü6 ofsny psrßon withoul adequato ôxcuso to ôboya subpomrrewod upon
thal porson m¡y bë dcomcd a oof,tompt ofthe coût fton wtrlch tho ruþoonr lssucd, ân
adoquâlo cauÈc for ßilurc to oboy oriC¡ whon a orþotne purpons to tôqulrc t nonpgrq to
attond u produco Ât a plrco nol wlthin tho llnin providod by clauso (ll) of rub¡emgraph

(cX3XA),

EXHIBIT A

SWA App. 2

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DTVISION
AMERICAN AIRLINES, INC

$
$

vs.

$

CIVIL ACTION NO. 4:l l-cv-0244-Y

$

TRAVELPORT LIMITED, ET AL.

$

PIAINTIFF'S NOTICE OX'INTDNT TO TAKE TITE
VIDEOTAPED DEPOSITION OF SOUT}TWEST AIRLINES CO.
PLEASE TAKE NOTICE that, pursuant to Rule 30(bX6) of the Federal Rules of Civil
Procedure, Plaintiff American Airlines, Inc. ("American"),
counsel,

by and through its undersigned

will take the oral deposition of Southwest Airlines Co. ("Southwest")

on January 15,

2013, beginning at 9:00 a.m., or at such date and time as is reasonably agreed upon

by the

parties, and shall continue from day to day until completed or otherwise adjoumed, at the office

of rüeil, Gotshal & Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 7520L The
deposition

will

be taken before a notary public or other officer authorized by law to administer

oaths. The deposition

will

be recorded by stenographic meansn as

well

as recorded

by audiotape

and/or videotape.

Southwest is directed to designate an offtcer, employee, managing agent, or other penron

or porsons with personal knowledge and competent to testiff on its behalf about the mattçr
identified in Exhibit

A

attached hereto (the "Topics for Deposition"). Southwest is requested to

notiff American and all other parties of the narnes of the designated individuals, their position,
and relationship with Southwest, and the Topics for Deposition on which each individual

will

testiff, no later than five (5) days before the deposition.

EXHIBIT A

SWA App. 3

Dated: December 21, 2012

Respectfu

lly submitted"

OF COT.INSEL:

RichardA. Rothman
Robert Berezin
Eric Hochstadt
'WEIL, GOTHSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153

(2r2)3t0-8426
(212) 310-828s (Fax)
MJ Moltenbrey

PAUL HASTINGS LLP
875 lsth StreeLN.rW.
rüashington, D.C. 20005
QAÐ sst-1700
Q02) sst-r705 (Fax)

R. Paul Yetter
State Bar No. 22154200
George Fibbe
St¿te

BarNo.24036559

Anna Rotman
State BarNo.24Q46761

YETTER COLEMAN LLP
909 Fannin, Suite 3600
Houston, Texas 77010

[phone]

(7r3) 632-8002 (Fax)

Bill F. Bogle
State BarNo.02561000

Roland K. Johnson
State Bar No. 00000084
HARzuS, FINLEY & BOGLE, P.C.
777 Main Street, Suíte 3600
Fort Worúr, Texas 76102

[phone]

[phone] (Fax)
Yolanda Cornejo Garcia
State Bar No. 24012457
yo landa. [e-mail]
Michelle Hartmann
State Bar No. 24032401
michelle. harünann@weil. com

WEIL, GOTSHAL & MANGES LLP
200 Crescent Court, Suite 300
Dallas, Texas 7 5201 -6950

Qr4) 746-7700
Ql4)746-7777 (Fax)
ATTORNEYS FOR PLAINTIFF

EXHIBIT A

SWA App. 4

CERTII'ICATE OF SERVICE
I hereby certify that on December 21, 2012, I caused a true copy of the foregoing to

be

served via U,S. mail on each of the following:

Southwest AirlÍnes Co., by and through its attorney of record Alden

Virson

&

L. Atkins,
Elkins LLP, 2200 Pennsyivania Avenue NW, Suite 500 West,

Washington, DC 20037 - 17 A

\

Defendants Travelport Limited and Travelport, LP, by and through their attomey
of record, Walker C. Friedman, Friedman, Suder & Cooke, P.C., Tindall Square
Warehouse No. 1, 604 East 4th Street, Suite 200, Fort rüorth, Texas 76102;

Defendant OrbitzWorldwide, LLC, by and through its attomey of record, John J.
Little, Little Pedersen Fanlfiauser LLP,901 Main Street, Suite 4110, Dallas,
Texas 75202;arÅ

All other counsel of record wíll be served via email.

Anna Rotman

I

I

i

-3-

EXHIBIT A

I

SWA App. 5

ExII,lpIr A

I.
1.

DEFTNITIONS

The terms "You" or "Your" mean Southwest Airlines Co., as well as its

subsidiaries, parent companies, predecessor entities, or related entities, and any agent, employee,
attomey or other person acting on their behalf.
3(AA" means American Airlines, Inc.

2.

The term

3.

The term "Airline Contenf' means an airline's fares, schedules, inventory

availabilþ, and/or merchandizing information (including anoillæy products and services

and

bundled and/or branded fares), and/or an airline's product and service offerings, and/or
infonnation or data exchanged to shop, boolç ticket or otherwise purchase airline product and
service offerings.

4.

The term "Content Source" means technology and the provider(s)

of

that

technology utilized by, at least, airlines to facilitate the distuibution of Airline Content (andlor
used by other travel industry participants to fasilitate the disftibution of their produots). Content

Sources include GDS Content Sources and Non-GDS Content Souroes such as

AA Direct

Connect.

5.

The term "Direct Connect" means a Content Sowce, other than a GDS, that

utilizes, along with other technology, a direct connection

to an air carrier (including

its

reservation system) to distribute that carrier's Airline Content to travel agents,

6.

The terms "GDS" or "GDSs" mean the global distribution systems operated under

the Sabre, Galileo, Apollo, Worldspan" and Amadeus brands.

-4-

EXHIBIT A

SWA App. 6

7,

The term "Universal Desktop" means a Travelport-branded technology platform

fhat, among other functions, displays to havel agents Airline Content from multiple Content
Sources using a graphical user interface instead of a command line interface.

8.

The term "Travelport uAPl' means Travelport's applioation programming

interface to permit airlines

to bring Airline Content to travel agencies that book through the

Travelport uAPI.

9.

The term "Corporate Customer" means

Management Company where that client

a

client

or customer, or the

or

customer

employees

of a

Travel

of that client or

custotner, primarily or exclusively use the services of the Travel Management Company to assist

with, plan, book, coordinate or afiange work-related travel.

10.

The term o'Ttavel Management Company" means an entity or business approved

by the Airline Reporting Corporation ("ARC') andlor the Intemational Association of Travel
Agenoies

('IATA') to act as an agent of at least one airline and that is in the business of

providing travel-related services to Corporate Customers (including their employees engaged in
business travel) and/or leisure travelers.

11.

The term "communications" means any oral or written transmittal or receipt of

facts, information, thoughts, inquirìes, or opinions, including meetings, conversations in person,

telephone conversations, records

of

conversations

or

messages, telegrams, facsimile

transmissions, emails, letters, reports, memoranda, formal statements, press releases, and
newspaper storios. References

to communications with business entities shall be

deemed to

include all officers, directors, employees, personnel, agents, attorneys, accountants, consultants,
independent contractors, or other representatives of such entities.

-5-

EXHIBIT A

SWA App. 7

12.
out

of

The terms "concerning,"'tegæding," "relatingr" and "referencing" mean arising

consisting

of, constituting, containing, embodyÍng, reflecting, evidencing, identifying,

stating, supporting, referring to, regarding, recording, dealing with, describing, explaining,
memorializing, or in any manner whatsoever pertaining to the subject.

13.

The words "ând'n and "oC'shall be construed conjunctively or disjunctively

as

necessary to make the request or definition inclusive rather than exclusive.

14,

The terms

15.

The term "including" means including, but not limitedto.

16.

The singular shall be deemed to include the plural and vice versa. The feminine

"all," "any"

and "each" shall be construed as all, eacho any and every.

shall be deemed to include the masculine and vice versa. The past tense shall be conshued to
inolude the present tense and vice versa.

il.

RELEVANT TIME PERIOD

Unless otherwise specified, the designated corporate representative of Travelport should
possess knowledge for the time period of January 1, 2001 to the present,

III.
1.

TOPICS F'OR EXAMINATION

The teshnological capability of Southwest and the GDSs to implement a Direct

Connect dishibution model.

2,

Southwest's distribution of products and services to business travelers served by

travel agents or Travel Management Companies, including ttrough Direct Connect technology or
channels.

3.

Communications with GDSs regarding any Direct Connect initiative, including

Direct connect capabilities with respect to marketing unbundled products.

-6-

EXHIBIT A

SWA App. 8

4.

Southwest's internal analyses of whether it should use, or limit its use of, a GDS

and the costs of direct dishibution versus distribution through a GDS.

5.

The amounts paid by any GDS to Southwest or paid by Southwest to any GDS

since 2006.

6,

Southwest's share or percentage of revenue, inoluding relative to other airlines,

from business travelers.

7.

Southwest's gathering and production

of

documents

in

connection

with

the

dispute between American and any GDS.

8.

The terms of all agreements between Travelport and Southwest, and between

Sabre and Southwest, and the parties' performance thereunder.

9.

The coxnmercial aspects of Southwest's Direct Connect arrangements.

10.

The technological aspects of Southwest's connection

to

and inolusion in

Travelport's Universal Desktop and participation in Travelport's uAPL

-7-

EXHIBIT A

SWA App. 9

.É ¡, ...,

.¡ii:jì;fr'.....-.\¡.tr¿.r.¡,¡

..,.,.' ¡¿.\,...,,,.....,-

¡,1

I iirti¡.r¡'¡¡,r..¡r..?,i

-'t ,\)
REDAcrEbvnnSroñi
L:i
o

;:J

l:ll iâ:::.rí.'i-,t
tl-J

-{;i'

f'.r'
rt l';j

No. 067-249214-10

ffi,::,=)

(-rl \'¿'lÈ1

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hji::

AMERICAN AIRIINES, INC.

$

$

$

SABREn'IC., et al.

67TH JUDICIAL DTSTRICT

$

PLAINTIF'F'S SD(TË[ A]VIENDED PETTTION
Plaintiff A¡nerican Airlines, tnc. ('An

"ricart')

files its Sixth Amended Petition

against defendants and respectfully alleges as follows:

Discovery Level

1.

In light of lhe importance

and complexity

of the natteis in iszue,

discovery should be done under a LevcL 3 plan approved by the Court, pwsuant to Rùle [90.4.

Nature of the.Action

2.

This is a lawsuit to stop Sabre's moilopolistic attacks a¡d schemes that

have seriously iqjured America:r's business and harmed members of the traveling public in our
State and across the nation, as weil as to recover for the

sipificant

damages that Sabre has

inflicted upon American. Tluough the use of anticompetitive contract terms, discriminatory
refi:sals to deal, prJnitive bias actions, and secret collusive boycott agreements, Sabre is trying to

unlawftlly maintain its monopoly control over the provision of airline booking services.
hæ not only engaged in this unlawfrrl behavior itse[, but has served as the ríng leader in

a

Sabre

classic

hub-and^spoke
attack American andthose working with America¡-

3.
Sabre íntends

ì,,.-'

';.

rNTHE JUDTCIALDISTRICÌ'OF," :¿
i"1
TARRANT COUNTTV, r¡iIES

$

v

'

-1:t \ t ^rI '-)
:-i

SabrCs motive for its orcheshated attacks is clear. Through these actions,

to corrce American into abandoning its effort to modemize and steamline the
1

EXHIBIT B

SWA App. 10

''''r.r̡.:i,\,r

costly legacy system for distributing American's travel data. Sab¡e extuacts exorbitant monopoly

profits from that system, which it plans to preserve as long as it can. In its own words, Sabre's
unprecedented campaign to retaliate against and punish American is designed
so that American

will

abandon its effort

*I

to distribute its tickets

using a more efficient and superior altcrnative distibution charurel, to the detriment of American
and the flying public.

4,

Prcserving its rnonopoly is so important to Sab¡e that

it is openly

actions lhat hurt its own legitimate short-term econornic intetest. Specifically, one

of

taking

Sabre's

largest customers, American, pays Sabre millions of dollars in booking fees each year, But for
Sabre's desire to prot€ct its monopoly, it is in Sabre's interest to maximize bookings of tickets on

American flights---and the revenues it gets

fom

such bookings-and to do everytling possible

to serae its major customer well.. Instead, Sabre has use¡l its ma¡ket power to inflict

severe

fina¡rcial harm on,{merican by hindering the sale of tickets on American's fliglrts. By harnring
one of its best sources of revenue, Sabre has harmed itself, in the fonn of lost booking fees for
the tickets American did not sell. Sabre's sole purpose in sacrificing these fees was to preserve
its monopolyposition by deterring A¡nerica¡r and others frorn continuing to prusue cheaper, more

flexible, and more effÌcient means of distribution.

5.

Sabre has been planning these attacks

for at least five years. Còncerned

about the competitive threat posed by alternative distribution melhods, Sabre entered into an
amendment to its Participating Carrier Ag¡eement in 2006 that govems American's participation

in Sabre's GDS. During the negotiatiors leading up to that amendmenl Sabre demanded terms
that impede Americ¿n's abitity to develop 'tdirect coûnectr! alternatìves to the GDSs. Arnong

2

EXHIBIT B

SWA App. 11

"

Irïi:.

.ll'''¡

"..''.,¡j

other things, those provisions require American to provide "full contentl through

6.

Sabre,I

As the ink on that agreønent was dryÍ¡g-and knowing that American

was still going to try to implement riew rlistribution technology to cornpetc with Sabre's

GDS-

Sabre's most senior executives developed a secret

rhe

I
2011 that

scheme culminated

in sabre's rernarkåble public

it wæ retatiating against American-its oldest,

announcemeÍrt on January 5,

and one of its largesq customers-by

imllernenting system-wide "biasing" of its electronic display of American's fare and flight data

in the Sabre GDS, in direct violation of its conhact with American. This biasing caused

chaos

throughout the travel industy. In just days, Sabre's actio¡s resulted ín zubstantial and ineparable
ha¡m to the traveling public and to Americau's business, goodwill, and reputatior¡ by eliminating
cou¡tless sales that Amcrican would have eamed and by mislearling the public into believing thât
American's services either no longer existe.d or \ryere not competitive with those of competing air
carriers.

7.

Blatant diqplay bias was only one of the weapons in Sab¡e's arsenal, Not

contffit to rely on iis own monopoly power to punish American, Sabre also organized
unlawfrrl group boycott against American. Sabre coordinated an agreement

an

atooogl

3

EXHIBIT B

SWA App. 12

In orchestralhrg this concerted attaclc" Sabre again
acted against its own economic interests.

It

inte.nded to, and did,

willfully depríve American

(and thus itself) of substantial revenues by unlawfully tleceiving the ttaveling public about the

availabilþ of American füghts. In short, Sabre elected to sacrifice its owr sho¡t-term revenues
and maliciously injure one of its major customers (and the travelers American serves) solely to

protect its monopoly by destroying the emerging competitive th¡eat that

AA Direct

Co'nnect

poscs in the long run.

8.
that

it

But bias and boycott were only parts of Sabre's scheme. At the same time

was both secretly and openly biasing against American, and that

a $oup boycott Sabre twice more than doubled the fees

it

it was secretly organizing

charges to disüibute American fare

and flight data, again in breach of the parties' contract. These punitive price increases
drauratically incrcascd American's annual distribution costs and imposcd much higher prices on
American tharr Sabre charges to airlines that are not trying or able to implement new diskibution
methods. And, yet again, having just doubled American's booking fees, Sabre had no legitimate
econo¡nic reason to ieduce the nurnber of America¡r bookings made through its GÐS. This is
exactly what Sabre did, however, by biasing its displays and organizing a group boycott against

American. This cónduct makes no economic sense-unless Sabre knew thaf it would enable it to
continue to earn monopoly profits over the long term.

9.
and disruption.

Sabre's retaliation scheme was intended to anil did cause enorrnoq harm

Its GDS is and long has been the largest non-di¡ect source of bookings for

American By skewing the elechonic display of American flight dat4
Sabre and those

it

and

was working with impeded or prevented

4

EXHIBIT B

SWA App. 13

American from selling tickets to untold numbers of potential travelers in this County, across the
State and nation, and elsewhere. This caused needless disruption, loss, inconvenience, and
burden, to American, the public, and the ftavel iudustry, all to achieve Sabre's goal of preserving

I
¡

I
I
I

the current monopoly distribution system.

i
I.

i0.

To stop this irreparable harm, American was forced to seek relíef fron this

Corrrt based on the tcrms of the parties' current dist¡ibution contract. On January 10, 201 1, after

a contested heanng, the Çourt ente¡ed a TRO enjoining Sabre from biasing, disfavoring, or
disadvantaging Arnerican's fare and flight data within the Sabrc

GDS.

Sabre then agreed to

entry of an extended TRO, to læt tluough a February 14,2011 hearing. Subsequently, the
parties submitted a¡rd the Court signed an z\greed Order abating the case on January 26,20L1,to

allorv for settlement discussions, The discussions \ryere unsuccessful, and the abatement expired
on June 1,201 1.

I

1

.

On June 1 0,

201 I

, Sabre unveiled the most dramatic weapon in its long-

plamed attack. At a hearing before the Court, Sabre a¡mounc¿d its plan to escalate its punitive
campaign against American by terminating the parties' base distiibution conftact on August 31,

201l, again in violation of the parties' conhact. Sabre's threat was unmistakable-it was going
to make American "go dark" in the Sabre GDS. If Sabre had carried out its tlueat, American
flights no longer would be displayed in the Sabre GDS, which accounted for ovü $7.? billion

of

American's sales in 2010. Among its various attacks, this rvas Sabre's most destructive. In
essence) Sabre was threatening to refuse to display the travel infonnation of its oldest and one

of

its biggest ct¡stomers--.c'ausing untold harm to American, to travelers, ønd to Sabre itselfsimply to preserve Sabre's monopoly, by forciug American to abandon its efforts to adopt a
adopt a new and better distribution system.

5

EXHIBIT B

SWA App. 14

,..¡-f;."Lr-r'r..,..'....."..-l¡ì,....¡|

12.

Sabre's threat was iutended

to cause widespread panic among the travel

agents, corporate customers, and the tuaveling public who use Sabre to book American's flights.

Numerous customers

American

a.s

told American that they would be forced to stop booking flights

the August

3l

termination date approached due

on

to uncertainty about post-sale

serr¡ice anrJ support. Sabre's threat to terminate dispLay of American's fare and

flight content-

a{ter an almost fifty-year relationship thal produces considerable economic rervards f'or Sabro*-

was designcd solely to thwa¡t and punish American's efforts to find a nÌore efficient, lower cost
means of distributing its tickets, and to force American to agree

to onerous nel contract terms

that would serve to consolidate Sabre's monopoly po\ryer over airline distribution.

13.

Fiually, faced with significant new antitrust claims by American based on

rccent discovery disclosures about Sabre's scheme, and with an impending temporary i4junction
hearing at which this Court lvould assess the laq'fulness of Sabre's threat to make American "go

dark in the Sabre GDS,

Sabre backed

down- On August 30, 2011, the parties an¡ounced

an

cxtension oftheir current dishibution confract through and beyond the final trial and verdict in

this matrer. The extension allows American to develop and pursue its claims tluough nial
ïvithout the tb¡eat of termínation by Sabre, as American seeks fr¡il compensation for the damages

that Sabre's actions have caused- as wcll as iniunctive relief to neutralize fhe anticornpetitive
\4'e:pons that Sabre has been using to preserve its monopoly hold over American.

Parties

14.

American is a Delaware corporation with its worldwide headquarters in

this County, at 4333 Amon Carter Boulevard,Iort V/orth Texas 76155.

¿

EXHIBIT B

SWA App. 15

t:

i

I
I

t:

15.

Defendant Sabre Inc. is a Delaware corporation with its principal place

of

4

l'

business at 3150 Sabre Drive, Southlake, Texas 76092. Ithas appeared by counsel and answered

in the

.L

case.

16.

i

Defendant Sabre Holdings Corporation ('Sabre Holdings') is a Delaware

corporation with its princÍpal place of business al 3150 Sab¡e Drive, Southlake, Texas 76092.

[t

I
I
I

i

has appeared by counsel and answered in the case.
17

-

Ðefendant Sabre Travel Intemational Limited ('Sabre Travel')

is

a

foreigr corporation with its principal place of business at 3150 Sabre Drive" Southlake, Texas
760ì92.It has appeared by counsel and answered in the cæe.

Jurisdiction and Vcnue

18.

The Cou¡t has subject matter jurisdiction over this case. The amounts in

controvarsy are within its jurisdictioual limits.

19-

The Court has personal jruisdiction over defendants. They are foreign

corporations that maintain their principal places of business in this County and Ftate; they have
committed torts in the State and purposely availed themselvcs of the benefits of Texas law; they

have done substantial business

in this

State systematically

for years; a¡rd

Sabre Travel has

breached a contract entered into in and governed by the laws of this State.

20.

Venue is proper in this County, pursu¿Lnt to Tex. Civ. Prac. & Rem. Code

$ 15.002. A substantial part of the activities, events, and damages at issue occu¡red here.
Facts Giving Rise to úhis lrction

A.

Distribution of Anerican's Fare and Flight Informatiou

21.

Three compa¡ies-Sabre, Travelpor! a¡d Anadeus-operate global

. disnibution systems

('GDSs') which a¡e the elecfronic "plurnbing" of the travel industry that

t-r-avgl

-qonngcl

Scenclet

ylft {llio.: res3rvations systems. tu:d:*

:11aæd

S-a!y in.the

qæfv.

I
I
I
I

I

7

!

I

.,1

I

EXHIBIT B

SWA App. 16

'!.

it

1i¡r a number

1996 and

fi:lly in 2000.

1960s and operated
beginning

in

of years. American divested its

ownership

f¡r,

of

¡, rJ¡.

.

l.

¡

J

¡\¡, ¡ ¡r-- "rtrr ¡,

Sabre

Since then, the two cornpanies have h,ad a¡r unbroken

contractual relationship goveming dishibution of A:nerican's content tbrough the Sabre GDS
that continues to the present day.

22-

Each GDS provides a service by which havcl information, including fares

and availability, for participating air carriers such as American is displayed via a computer to
subscribing travel aþents ("subscribers'). Subscribers then use the GDS to book tickets for

tle

public for travel on American or another participating carrier. Of the three GDSs, Sabre is by far
the largest; more than 60% of all airline ticket sales made by U.S.-based travel agencies are made
through Sabre.

23.
charges

Travel agent subscribers do not pay to use Sabre's services. Rather, Sabre

its aùline customers, such as American, a supracompetitive "booking fee" for

cach

booking that a travel agent makes tbrough its GDS. Sabre then "kicks backl' a portion of the fee
to the travel agent. Thus, when travel agents decide which'GDS to subscribe to, they often have
an incentive to choose the GDS

24.

tÏat

charges the bighest, not fhe lowest, booking fees.

American and most other domestic airlines depend upon tavel agencies to

sell airline tickets to consumers. Although the airlines sell tickets directly lo consumers through

their websites, call centers, and ticket offices, the majority of aìrline passenger revenues are
generated by tickets sold tÏuough travel agencies- Approximately

generated

5I% of American's revenue is

by "brick and mortar" lravel agencies, and another 10-159á is generated by online

agencies, such as Orbitz, Travelocity, and Expedi4 that use a GDS to make bookings.

25.
revenue

Business Favelers, who account for a disproportionÂrely high share of the

of most airlines (including American), are particularly

EXHIBIT B

dependent on travel agents.

SWA App. 17

:ll

j::i

lii.

i.

Maay businesses contract with a travel agency to rnanage their employees' business travel, and
require that employeçs use that travel âgency whcn they purchæe airline tickets for business

travel, even

if

the traveler locates a less expensive fare elsswhere. Businesses prefer travel

egencies because they offer a variety

of services, such as ensuring compliance with corporate

travel policies, negotiating and implernenting corporate contracts

for discounted airfares,

and

accourting and other data management services, Because of these additional services, these
business customers would not substitute purchases

response

of tickets directly fro¡n individual airlines in

to an increase in ûre price of services charged, or a decrease in the level of servicc

provided, by travel agents o¡ the GDSs used by travel agents.

26.

At present, travel agents rely almost exch.rsively on GDSs

as their sôurce

for flight information. Although sorne travel agencies subscribe to more than one GDS, most
rely on a single GDS in any particula¡ location or for any given corporate customer. Using
multiple GDSs imposes additional costs on the travel agent because of the additional ti'qe, effort,

and expense needed

to

enter a sea¡ch

in more than one CDS, because using multiple

GÐSs

requires additional fraining costs, and because the travel agent's accounting, billing, and
recordkeeping systems typically are designed to ir¡teroperate wÍth a particulat GDS.

27tavel

Because business bavelers purchase nearly

agents, and because most travel agents get their

all of their

tickets through

flight infonnation through only one GDS,

American and other airlines that wish to sell to business travelers must make their flights
available through all

tl¡ee GDSs or else forgo a zubstantial number of higþer-yieldìng ticket

sales.

28.

This systenr, whereby the GDSs charge afulines supracompetitive booking

fees for tickets sold using their systerns, and then share the resulting monopoly profrts with the

o
¿

EXHIBIT B

SWA App. 18

lravel agencies that subscribe to those systems, is cornmonly referred to in the indushy as "the
GDS rnodel." Both the GDSs and most travel agerrcies have a vested interest in preserving the

GDS model and protecting Ít from compelitive th¡eats posed. by new entr¿mts or new ways of
distributing airline tickets

B,

The Sabre FCA autl Arnerican's Direct Connect System

29.

On September 22,1998, American and The Sabre Group, [nc. entered into

the Sabre Participating Carrier Distribution and Services Agreement

('?CA').

On July 31, 2003,

the PCA was amended and Sabre Travel replaced Sabre Inc. (formerly known as Thç Sabre
Group, Ino.)

in all

respects as a party to the

PCA. The PCA

establishes the fare and flight

information that American will make available to Sabre Travel for distribution through its GDS.

In turq the PCA requires Sabre Travel to display Ameri.can's content in an unbùsed manner,
meaning that Sabre Travel cannot disfavor American fares relative to otherwise comparable fares

of competitors, such as by ranking them lower on the Sabre computer scrcen. Finally, the PCA
sets the booking fees that American pays Sabre Travel ior bookiogs made through Sabre's GÐS.

Over the years, American has paid Sabre biilions of dolla¡s

in

booking fees, which a¡e the

primary seurce of GDS revenue.

30. In ¡ecent years, American

has successfrrlly incoçorated newer, more

robust" and less expensive technologies into the distribution

ofits products and services.

These

ne\ryef technologies are cenhal to Arneúcan's distribution strategies, rvhich seek to inhoduce new

and more efficient products that allow
and more beneficially,

it to interact with its customers more ofteq more olosely,

in ways that a¡e not adequately supported by tlie current antiquated

and,

costly system dominated by legacy GDSs like Sabre.

31.

As evidenced by its anticompetitive behavior, Sabre is acutely aware thnt

th¡s1 ney lechnologies-known as "direct 6o¡Ígçtslr-present a competitivÊ tlìreat to ib

''ïro

EXHIBIT B

SWA App. 19

lucrative GDS business. A direct connect sysiern allows an airline to use the latest technologies
to provide access to an airline's fares, inventory, and other products directly to tlavel agencies, at
a fraction of the cost charged by Sabre and other GDSs. On the other end, technologies exist that

allow agencies to incorporate information provided by the direct connect system seamlessly into
other information sources fhey use, Iike GDSs. These products, which are offered by numerous
venclors, allow a travel agent to efficiently aggrêgate fares/flight data f¡om multiple sources, so

that the agent cau make an i¡fonned decisioD {rmong services offered by multiple airlines. Direct
connect systems have existed since the mid 2000s and are now proven technologies that have
been used by some <lf the largest airlines to connect with some of the largest

32.

tavel

agencies.

American and its travel agencies have every right to use direct connect

technology in lieu of or along with more expensive, less capable, and less eflicient legacy GDS

systerns- For several reasons, howeveç the wrlawful conduct of Sabre has prevented these
altemative distribution methods.fron displacing or even exerting competitive pricing discipline
on the GDSs.

33.

In theory, American could encourage the GDSs to compete with respectto

booking fees by withholding its participation in a particular GDS since, over, timo, a GDS that
does not provide airline ticketing sewices for ær airline like Ame¡ican would be less valuable to

consumers and thus fo travel agents.

ln reality,

ho'wever, this would cause American

to suffer

immediate and enormous harm in Tcxas from the loss of ticket sales by travel agent subscribers

to the GDS. The GDS, on the other hand, would suffer only future. and uncert¿in,

cos.ts due to

its inabìlity to book Ainerican's tickets because it is protected from immediate harm by high
switching costs and long-term contacts with travel agents. As Sabre knows, the loss of a
significant number of ticket sales is a sacrifice that neither American, nor any other network

11

EXHIBIT B

SWA App. 20

¡i-r.,--....

r.,.,..

airline, can afford to make and remain a viable airline competitor. Accordingly, Sabre has
concluded that Ä¡nerican could not lvithstand the devastating losses

it lr,ould suffer as a rssult of

Sabre's punitive campaigrr" and tbat the benefits Sabre would realize frorn quashing the Direct
Connect competitive th¡eat were worth the short term loss of revenues that Sabre would suffer in
the process.

34.

Sabre's contracts with travel agents also inhibit American's abÌlity to shift

bookings away from Sabre. These contracts tend to haVe long terns a¡d are effectively
exclusivc because they are strucfured to reward travel agents with hefty'ïncentive pa¡rments,, for

booking all, or substantially all, of their segmenfs tfuough Sabre to the exclusion of any other
distribution method. A travel agent that fails to book a sufficient numbcr of segments through
Sabre is penalized with "shortfall fees" that effectively strip away the incentive payments for atl
or nearþ all of that agency's bookings- Thus, in sorne cases, for American to encourage a fravel
agent to book through non-Sabre methods, it would have to reimburse the agent not only for the.

incentive payments the agent lost for Americanos bookings, but also for lost payments 'for every

other ticket'sale as well, even though those other sales stili went through thc GDS and even
though A¡nerican received no revenue ûom them. In other instances, the travcl agency would
have to disgorge to Sabre sigrrificant lump sum payments or otherwise suffer disproportionately

large financial penalties for falling below contractually set tbresholds. These types ofincentive
payment provisions effeðtively make

it

impossible for American to incentivize agents to switch

to direct cooo"ct dishibution even though it is mo¡e efficient.

35'
designed

Finally, Sabre has engaged in a sustained campaign of retaliatory conduot

to thwart Americans' and other airlines'

aftempts

to shift

bookings

alternatives. Sabre's weapon of choice for punishing its custoruers, when

it

to lower-cost

believes they are

L2

.EXHIBIT B

SWA App. 21

ínsufficiently loyal to Sab¡e's lucrative GDS model, is bias. Sabre knorvs ihat by biasing its GDS
displays to disfavor*-or exclude entirely-an airline's flights (or seats on those flights), ít can

inflict substantial and unavoiclable financial damage on its customers, who will lose significant
revenues from lost ticket sales. Sabre lnows that those lost revenues

f

The losses that airlines suffer from bias, even over relatively short periods of time,
substantially outweigh the benefits the ai¡lines can hope to obt¿in by pursuing more efficient

distribution altematives. Âccordingly, bias is a very effective tool to force airlines to accede to
Sabre's dcmands-

36.

Ä key element of

Sabre's plan was to use bias

to inllict enough pain to

force Ame¡ican to abandon its efforts to move to rnore efficient means of distribution Sabre's
concerted effort to punish American included biasing the display of American's info¡mation in

its GDS and by facilitating

Sabre has

aiso organized, monitored, and polìced a group boycott in wlúch

te-and did-"book away'' from American.

37.

Sabre's conduct is not for any legitimate purpose and

it is contrary

to

Sabre's valid, short-term, business interest to disfuibute the tickets of one of its la¡gest customers

to tavel agencies. I¡stead of tryine to generate more booking fees from American, Sabre þas
done everything in its power, including enlistìng the support and agreemeot

punish American so that

it

offto

abandons its "direct connect" initiative and other airlines do not

attempt to follow .A¡nerican's path. The purpose and effect

of Sab¡e's conduct is to maintain its

monopoly position in the antiquated legacy ticket distribution system.

C.

TheAmended Sabre Distribution Contracf

38.

On September 1, 2006, American and Sabre Travel sigued an amendment

to the PCA called the Distribution Content and Modified Paynr.ents Amendment ('Amended

l3

EXHIBIT B

SWA App. 22

ri¡.ji,itlr,¡,..

PCA').

r...,:.r.

\..'..¡!.1,.1r".

.¡

The Amended PCA states that American ís to provide Sabre Travel timely, accurate, and

cornplete access to Àmerican's "FuIl Content."

American has complied with all
obligalions to provide Full Content under the Amended PCA, even though Sab¡e's insistence on

the clause is anticompetitive and conhary to Texas law. The clause makes it impossible for
Arnericau to encotrage Sabre Subscribers to move to lower-cost distril¡ution channels by making
more-desirable content available tlrough thos e cha¡rnel s.

39.

In retum for Full ContenÇ Sabre has a duty to properly display American's

fare aud flight data. Sabre rnay not knowingly disadvantage or disfavor American's content
within the Sabre GDS relative to any other carrier that participates in the Sabre GÞS.

40.

Travel agencies expect fair and unbiased display of Amerìcan's travel

infonnation through the Sabre GDS. So do federal regulators, including the U.S. Department of

("DOT'). In 2004,

Transportation

when the GDSs were no longer owned by airlines and the

DOT desidcd to deregulate GDSs, it cautioned that "there is some potential for conduct by the
systems that could prejudice airline competilion (most notably the sale of display bias).-

41.

Sabre has long been awa¡e

.A,merican's direct connect

of

and sought

to impede competition from

system. In fact, the tech;ology wâs an issue in the parties' last

conkact negotiations al¡nost five years ago, and di¡ect connect is mentioned by narne in the
Amended PCA,

American has complied \¡/ith its obligations under the

AmendedPCA.

l4

EXHIBIT B

SWA App. 23

l.ijiì:i:-j.î

r r'.

-'.,

42-

As early as November 2006, only a few months after the Amended PCA

between Salrre and American was signed and five years
Sabre began

prior to the contract expìratíon

ì.
I

tÌate,

to formulate a multi-faceted plan

ì:
i:
i
I
I

I.
t:

D.

Termination of Farelogix

43.

For an alternative provider of airline booking services such as AA Direct

Connect to be a practical substitute for usc of a GDS from the perspective of a t¡avel agent, the
travel agent needs to be able to transfer information about tickets sold through that service to the
software progmms----called

fron! mid, and back office apptications. that the agency

functions such as billing and qualify assurance. In addition, many agencies
alternative booking channel to be viable onty

uses for

will f¡rd

an

ifthey can aggregate and compare content f¡om

muJtiple suppliers, whethe¡ received through multiple direct corurections or, through a direct
connection and a GDS. A. number

of

technologies and technology providers exist that a¡e

capable of performing these inleroperability a:rd'aggregation functions. Oue such techriology

provider, Farelogix, has worked with ¿\rnerican and other airlines for several

1'ears to develop an

eflicient, flexible technology platform for airline direct connects.

44.

Farelogix was a member of Sabre's "authorized rxer".program beginning

in June 2005, and signed the original Sabre Developer Agreement in August 2007. l¡January
2009, however, as it became increasingly clea¡ to Sabre that di¡ect connect technology presented

t5

EXHIBIT B

SWA App. 24

a serious potential competitive threat to the GDS model, Sabre abruptly tcnninated Farelogix's

developcr agreement. The only reæon Sabre had for terminating Farelogix was that

it

was

working to help airlines-and especially American---establish direct conncctions with t¡avel
agents. Without a valiil developer agreement, Farelogix does not have access to the APls that a¡e
needed to allow its software to interoperate

with Sabre subsuibers' front-, tnid-, and back-ofTice

systems. Sabre has also terminated other developers who assisled in the development of
distribution platforms that th¡eatened Sabre's monopoly position.

E.

American's.Your Choice Program

45-

On Jr¡re 15, 2010, in its ongoing effort to better serve fhe traveling public

ar¡d its customers, American announced

tavel experisnce môre

its "Your Choice" prog¡am. Designed to make the

personalized, cost-effective, and flexible, Your Choice offers extra

services that passengersi can buy for a modest fee at the time of booking. The initial offering

of

the Your Choice program was lhe "Boarding and Ftexibility Package," which offers customers

without elite ûequent flyer status the option to receive priority boarding, free standb| rights, and
a $75 discount

off of the normal $150 change fee fare rule. Ameriban files

a "fâre basis code"

specially designated for the Boarding and Flexibility Package, which code it makes available to
Sabre for

distibution to its Subscribers via its CDS.

46.

Customers who book the Boæding and Flexibility Package fare basis code

directly with American*through ¿\Â.com or the direct con¡rect system-receive additional
sen¿ices that are not available to customers who book that fare basis code índirectly, through a

GDS. Thus, custt;mers who book through Sabre

can receìve a reduced change

fee. Those who

customize their travel gxperience by buying directly, tbrough AA.com or the direct connect
system, also can receive priority boarÅing and ûee standby

rights. Your Choice services

also

include in-flight Internet access, confimaed ftight change, and Admirals ClubÐ access, but at this
16

EXHIBIT B

SWA App. 25

time only the Boæding

ald Flexibility

Package' is available

to

agencies using direct co¡rnect

technology.

47.

In July 2010, Sabre questioned fhc Your Choice progrâm in

Arnerican. It claimed thaf Arnerica¡r was obligated to provide to Sabre
services

access to

an cmail to

all Your Choice

for distribution to its travel agent subscribers through the Sabrc GDS. On August 4,

2010, American answered Sab¡e's questions rvith a witten response that explained how Your
Choice complies rvith A:nerican's duties under the amended

PCA.

Sabre took no visible action

at that time.

48.

Secretly, however, Sabre began plar,rring a retaliatory attack on American

intended

abre's

skategy included

f'.

Sabre Colludes

49.

o Exclude

Throughout 2010, Sabre,

Direct Connect
were in regular

communication with each other about the tbreat that "A¡nerican's activities posed to the GDS

For example, in Se,ptember 2010,

l7

EXHIBIT B

SWA App. 26

50^

One of the reasons airlines are interested in direct connect technologies is

that they facilitate the airlines' ability to sell tlreir passengers customized ancillary services*
such as advanced boarding, airport lounge access, or preferred seating-that the GDSs cannot

offer.

51.

of

Representatives

Sabre,

communicated

regularly to coordinate their strategies for addressing the airlines' desire to sell ancillary services
without enabling direct connect to gain a tochold in ihe markel For example, at the same time
Sabre was refaliating against American

for its direct connect efforts, it was also negotiating

a

new conf¡act with U.S. Ainvays. Sabre,

I
52.

53.

18

EXHIBIT B

SWA App. 27

I

I
I
!

:

54.
participation

in

also communicated with ons another though thcir

Sabre

initiatives sponsored by BTC:

in particular,

Open Allies for Airfare

i

i
I
I,
I
I

Transparency. This coaiition, ostensibly organÍzed to advoc¿te before Congrcss and regulatory
agencies about transparency

of

fees

for ancillary services,

served. as

a vehicle

f"; I

to enter into agreements with one anolher and coordinate
their attacks on American.

55. In fact in Nove¡nber 2010, Kevin Mitchell, the Chairman of BTC,
observed

56.

Sabre

comm'nicated with one another through

Ialso

I

communicate their posif,ion vis-a-vis American and

*d th.fin

Direct Connect to

I

AA

tum would pass on what it learned to

For example,

Similarly, when American announced that it had reached a
direct conneet agreement with Priceline, an online travel agency,

57.

The collusion befween Sabre,

rvas conducted at the highest levels

they

recognized that their communications crossed the line of legitinate competition on the merits.

19

EXHIBIT B

I

SWA App. 28

I

I
G.

Orbiþ.' (and Travelport's) Refusal to Honor ifs Direct Connect Obligations to
American

58.

Alsó throughout 2010, American was in protracted negotiatíons with

Orbitz, the third largest odine travel agency in the U.S, over Americær's new direct connect

technology. Orbitz was established in 2000 as a direct-connect-centered agency by its then
airline owners. ln 2006, a corûpany affräated with Travetport, the second largest GDS in the
U.S, (after Sabre), had acquired a controlling interest in Orbitz. Thereafter, Orbitz had begun
increasing its use of GDSs to disEibute American's product by reducing the number of bookings
processed through "Supplier

59.

Link,"

a di¡ect connect system used by Orbitz.

American had been negotiating with Orbitz to retum

di¡ect connect agency. By laie 2010, however,

we now kttow, unable-to

it

it to a cost-effective,

became cle¿¡ that Orbite was

unwillíng{r,

implernent American's newest di¡ect connect technologies.

Unbeknownst to American at the time, Travelport-intending to replace Orbitz's direct conne¡t
bookings with more expensive Travelport GDS bookings-had entered a contract with Orbitz
that expressly prohibited OrbiÞ from using an American direct connect syste.m. In late 2010,
Orbitz arurouncod it woutd not implement

H.

a

new direct connect system with American.

Travelport Âttacks American

60.

On November

l, 2010, American gave 3O-days notice to Orbitz that it

intended to terminate c€rfain negotiated agreements with

Orbitz. In response, the same

day,

20

EXHIBIT B

SWA App. 29

Travelport noiifìed American that

it would

raise

by 100% the booking fees it

bookings of American fliglrts by Travelport subscribers

in

chæges for

markets outside the United States-

American was advised that the doubled Travelport booking fee was purely punitive, to ¡etaliate
against American for terrninating the Orbitz agreement.

61.

On November 5,2010, Travelport sued Amerìcan in Chicago. In a case

filed in the Circuit Cou¡t of Cook Corurfi Travelpoil ticd to enjoin Americau's terrnination of

Orbitz. On the

same day, American sued lÌavelport

in this County for

declaratory relief

concerning the dispute. Amcrican subsequently non-suited Travelport without prejudice.

62-

By this timc, American's commercial dispute with O¡bitz became a public

topig since Orbitz publicly discloscd the parties' disagreement in an S.Ë.C. filing. The Orbitz
CEO accused American of trying to force travel agencies to get infonuation directly from the

company instead

of through

GDSs, despite the fact that Orbitz had been receiving content

directly from Amerioan ând other airlines for years. On December 21, 2010, the Chicago court.
denicd Travelporl's motion to pretiminarily enjoin termination of the contract ancl Americau then
terminated the Orbitz agreemenL

I.

(

Sabre Joins

63-

Arnerican's decision to end its relationsbíp wíth Orbitz generated much

kade press coverage. Sabre feared that

if

an agency like Orbitz recommitted itsetf to a direct

connect relationship, other agencies would see that the technologies were not only viable, but
also superior to GDSs. Sabre vigorously argued against thc r¡se of di¡ect cônnect systems, both

to the industy generally and to
capabitities

of d.i¡ect connect

Subscribers

systems, as

(tavel

agencies), grossly misrepresenting the

well as American's intentions in seeking to expand

their use. Sabre saw American's decision to ternrinatp Orbitz as an opportunity to ramp up

a

2r

EXHIBIT B

SWA App. 30

i.
t'

rrt,.r

-,-

-.¡-rr11rt

¡.,.a,..i

¡,\

¡¡¡,,\..r,¡...ì_¡.

¡

coordinated public relations campaign against

íts direct

corurect efforts, as

rvell as direct

i
I

' discussions witht¡avel agencies about ways to oppose American's cffbrts.

64-

Responding

to public GDS criticism and

I

i

misinfonnation, American

explained its shategy and the direct connect teclrnology, as it is entitled to

do. For êxample,

the

Sabreled coalition was misleading the public, cotlsumers, and the press by. arguing that
American intended to use dircct connects to make
agencies to compare options.

it

more diffìcult and expensive for havel

In fact. proven techaologies were already in place, and in

inst¿urces were being markefed

sorns

by GDSs, that would allow agencies to easily aggregate

and

compare American's services to those of other carriers. That is precisely what Orbitz had done

for years, and consumers had used their website to shop for and compile services of mrrltiple
airlines in a completely tratrsparent and easy to use display. Orbitz began moving away frirm
recciving information directly f¡om airiines only after

it

became controlled by entities with an

ownership interest in Travelport. A:nerican had no expectation or intent that direct connect
technologies would elirni¡ate choice or make its selling process less hansparent. To correct

misinformation in the marketplace spread by Sabre and others, as well

as questiors

ftom tavel

agencics, American explained that its direct connect strategy was motivated by a desire to reduce
costs and ofÏer more and better product offering to its customers.

65.

This generated substantial industry discussion about American's strategy

and system, as the trade press reported on the option, other innovations, and American's vision

for modernizing the antiquated distibution system for airline fa¡es. For months, American had
been answering rnedia questions about the progranL layrng out the pros and cons

of a direct

connect systen. Sabre never objected to the propriety of Arnerican's statements, responses, and
explanations about its in¡ovative direct connect system*untü January 5, 201l, when

it publicty

22

EXH¡BIT B

SWA App. 31

annourced its punitive, anticornpetitive plan to introduce systemwide biæing against Amcrican's
sernces

66. In the period leading up to its January 5 announcement, Sabre had
continued

Itmid-Novernber

2o1e

67.

Arouud the same'time,

68.

Bxpedia, the largest online havel agency and a Sabre subscriber,

I

On December 23, 2010,

shortly after Arnerican terminated Orbitz, Ëxpedia began biasing American's flights and
schedules, by deliberately listing them lower in the Expedia.com search display rhan those

other airlines. Expedia stâted thât

it

was taking this action

in

support

of

for Orbitz (one of

,1

EXHIBIT B

SWA App. 32

Expedia's closcst compctitors). In response, American announced that

it

rvould continue to

provide its airfare content to travel agencies, þoth through GDSs and its direct connect partners.

69.

On January 1, 2011, Expedia completely removed American's fare and

flight content from Expedia.com. Expedia's statement on the subject publicly attacked

the

ditect connect shategy: "Arnericau Airlines is attempting to introduce a new direct connect
model that

will result in high costs a¡d reduced transparency for

consumers, maki.ng

it difficult

to compare American Airlines' ticket prices and options."

70.

Sabre also met with representatives

of

I

I

I

{

I

24

EXHIBIT B

SWA App. 33

7I.

To encourage and

72-

Sabre wæ prohibited by thc terms

join its boycott

and obtaín their

agreernent

of a separate contract with Arnericair

relating to Sabre's wholly-owncd online tavel agency Travelocity from biasing Travelocity's
dirpluy, but there was no such contractual restriction on Sabre's ability to bias the displays

of

Travelocity for Busjness ("TBizu), Sabre's wholly-orvned havel agenÇy serving corporate
customers.

73.

Although

Sa.bre had been

it was only on Jan¡rary 5,20LL, when

it implemented

systcmlvide

bias against American, that Sabre discloscd to the traveling public that it would no longer

fulfill

its cont¡actual duty to fairly and accurately display, and not to bias, Amcdcan's fare and flight
content within the Sabre GDS. On that day, Sabre deliberately intuoduced widespread, deceptive

and harmful bias in its eJectronic GÐS display of America¡'s content, making

it difficult

o¡

virnrally impossible for travel agents easily and quickly to access information regarding
American's fare aud flight information. Sabre stâted that it made changes in

itr GDS "that alter

the order'in which some of American Àirli¡es' flights âppear in availability ând shopping

25

EXHIBIT B

SWA App. 34

ti

displays."' Sabre admitted thc disruption causecl by its action, acknowledging
"concems

,ag*aio,

the potential impact of these actions on these operations."

74.

After Sabre implementcd its systemrvidr

75.
tim*that

custorncr

Sabre tried to

ui*inn[

justify its wrongful bias by falsely claiming-for the fìrst

Á¡nerícan had breached the Amended PCA. First, Sabre allegedthat its anti-bias

was terminated because American supposedly had publicly "marketed'

duff

a direct conn.ect

'þrogram" through the media or at industry meetings to GDS subscriben, which ¡\merican has

I

i.
¡.

never done. Second, although American had fully complied with its obligation to provide Fu[l

!.

Content for distribution via the Sabre GDS, Sabre tlisparaged American by claiming, rvithout

li

detail, that "American has taken action to iinpose a costly, unproven and urr¡recessary systemr

while witliholding some fare contenf' that "makes

it

harder and more costly to comparison

shop." In fact, Ame¡ican has not v/ithheld "fare content."

76.
ímmddiately,

it

Also on January 5. 2011, Sabre gave public notice that, effective

was r:nilaterally increasing-by more than double-the fecs

it charges

to

American for bookings made by Sabre Subscribers of An¡,erican's flights in the United States,
Caribbea¡U Canada Mexico, Europe, the South Paci.ûc, Asia, Latin Americ4 the Midd.le E¿st,

26

EXHIBIT B

SWA App. 35

:r

and

Africa-

Sabre said that

it

''¡.as "eliminating the substa¡rtial price discounts
[American] has

eqjoyed consistent with its príor iong-term commitments to provide l'ull content."

77.

Sabre's i¡creases were unjustified and wholly punitive.

always provicted Sabre access to Full Content under the Amended.

PCA.

'American

had

Sabre had no valid

basis to double its booking fees.

78.

During this time period, Sabre cor¡tinued to

As a result of Sabre organizi¡¡g 1¡¡*
boycott,

79.

Finally, Sabre and Travelport instigated and coordinated a broad PR

campaign against Amcrican's direct connect strategy ancl system that was also intended to protect

their monopolistic booking fees by preserving their antiquated, costly iegacy distribution system.

Thus, a November 29, 20lO a¡ticle

in

Business Travel News reported that Travelport "is

circulating a merno that offers 'myth-busting' en AA's direct connect initiative."

J.

TRO Âgainst Sabre and Subsequeut Developments

'

80.

On January 10, 2011, at American's request and after a contested hearing,

the Court entered a TRO enjoining Sabre from biasìng, disfavoring, or disadvantaging American
27

EXHIBIT B

SWA App. 36

content ,¡¡ithin the Sabre GDS. Expedited discovery then commenced in eamest, in preparation

for an expected Temporary lnjunction hearing. On January 21,2011, Sabre agreed to an o¡der
extending the TRO for several wecks, through the date of the Temporary Injunction hearing.
Subscquently,

the Court signed an Agreed Order abating the case to allow for

discussiors. The discussions were unsuccessf,{, and the abatement expired on June

8l-

Sabre had agreed that during the abatement

it would not

settlement

l, 2011.

bías Anterican's

çontent. But, ùnbeknownst to American, Sabre did not abandon its exclusionary

scheme.

Throughout the month ef J¿¡nary 2011, Sabre carefully

.82

Sabre did not disclose to American that

it

was continuing its efforts to
t.

punish American

I
I

i
I
I
!

¡

I
ì

i.
I
I

i

no
LO

EXHIBIT B

SWA App. 37

83.

Sabre also

As

a

result,

o¡ì numerol¡s occâslons,
complained to Arnerican that thcy could not find American flights, fares, or seats in Sabre's

displays. Although Sabre knew
Sabre sirnply told American that Sabre was not the source of the display problern.

84-

Discussions between American and Sabre during the abatement period

were unsucc€ssñ¡l, and the abatement expired on June 1,
that day, Sabre filed papers in the Federal

201l.

Just minutes after midnight on

Distict Court for the Northern Disfiict of Texas, Fort

Worth Division, seeking to intervene in an antitn¡st suit filed by American against Travelport
and Orbitz, a¡rd to file Sabre's own antihust and other claims agarnst Americ¿m. Later that day,

American a¡nended its federal complaint to add Sabre to the litigation.

85.

On July 8, 2011, Sabre notified American that effectivc immediately it

was again unilaterally, substantially, and punitively.increasing the fees

for

bookings made

by Sabrc

Subscribers

of

American"s fligbts

it

charges to American

in the United

States and

Ca¡ibbean.

K

Sabre Threatens lhe Wholesale Removal of .{rnerican's Flighfs from

86.
201

1.

Ih GDS

The Amended PCA has a stated term of five years, tlrough September 1,

Sabre contended that the Amended PCA would have expired" on Augr:st 3 I , 20 I

l, and that

the underlying PCA-which has been in place since 1998, obligates Sabre to disfribute
American's flights, and has no fixed term-would have expired on August

3l æ well.

On

.29

EXHIBIT B

SWA App. 38

August 28, Sabre a¡d Arnerican agreed to extend fbe Amended PCA until 14 days after a jury

verdicl dismissal,

or judgment on the antitrust claims in this case.

87.
Sabre

Sabre hæ stâted that,

will tenninate its

if

.A.rnerjcan does not prevail on its antit¡ust claims,

busîness reladonship

with American unless Americarr agrees t<l be

tocked into a new long{erm contract with onerous, anticompetitive terms. hr particrrlar, Sabre
has refused to deal with American-ending a long-stantling and consistently profrtable business

relationship-unless Ämerican agrees to a Full Content clause that would prevent American
f¡om offering enhanced or more-flexible fare and flight content tluough non-Sabre tlistribution
channels. Sabre's insistence on a "full content" requirement is exclusionary and anticompetitivo
because

it prevents

.A,merican

from encouraging travel agents or consumers to use alternative,

less-costly distribution channels

by making certain content available only through

those

chamels. Thus, a ftill-content provision hurts.both competition and consumers in Texas while
simultaneous ly maintaining Sabre's monopoly po\r'er.

88.

Furthermorc, tbc firll-content provision on rvhich Sabre insists would

prevent Àmerican fiom providing premium content tlrough other distributors even

if

Sabre's

own outdated computer systems are incapable of processing that content. Because Sabre, due to
its own lack of invesbnent in its infrastructure,
American's hands so that no one can offer
destroys any incentive

"r*ot

them.

offer certain types of fares, it seeks to tie

Such a tactic is baldly anticompetitive, as

for airlines and distribution system providers to innovate and

it

robs

consumers in Texas and elsewhere of the fruits of such innovation.

89.

In addition to the full-co¡tent provision, Sabre has th¡eatened to terminate

A:nerican unless it accepts several other illegal and anticompetitive provisions, including several
that a¡e even more exclusionary and restrictive than the terms of the existing Amended. PCA.

30

EXHIBIT B

SWA App. 39

90.

Just as the contract provisions upon which

it

insists arç anticompetitive

and exclusionary, so too is Sabre's refusàl to deal with American unless American accepts them.

.American cânnot afford to forgo revcnue from the business l¡aveiers who buy tickets through
Sabre Subscribers. Thus, unless Sabre is enjoined from t¡¡minating the parties' longstanding
relationship, Americau may have n0 choice but to agree to whatever onerous terms Sabre insists

upon. The result rvill be continued maintenance of

Sabre's rnonopoly, harrn

to American in

'l'exas in the form of higher booking fees and degraded service, and harm to consumers and
competition in Texas in the form of higher prices and stifled innovation. Indeed, Sabre is fully

u*"r" oi its power
punitive actions

to destroy Ame¡ican's business and of American's inability to withstand the

it is threatening,

and has again comrnenced

taking. In facl it is this very

understanding that is driving its strategy of taking punitive actions against .American, which but

for its anticompetitive campaign to quash the tlirect connect initiative, would bc entirely contrary

to Sabre's own business interests-and are contrary to any legitìmate businoss interest it might
have.

L.

Sabre's Conduct llarmed ¡\rnerican

91.

Sabre's rmlawful actions have l¡armed the traveling public, the travei

industry, and American. Sabre's and its co-conspirators' display bias caused significant,
unwarranted confxion, frushation, and aager
corporatÈ customers.
because

in the havel indrutry and with

American's

It forced travel agents to take extra steps to locate American's

fares

it buried American's farcs by listing them at the bottom of the screen viewed by uavel

agencies (or dropping them from the fust screen entirely), even where these were the least
expensive and/or best scheduling options

for tho customer. Coçorate

customers expressed

irritation and anger towa¡ds A-merican because of unwananted delays and difFrculties caused by
Sabre's

conducl

Sabre's unlawful actions also triggered

sifficant

confusion in the consurner

31

EXHIBIT B

SWA App. 40

marketplace. It lecl consumers to believe, incorrectly, that American was thç instigator of a move

that causes thcm inconvenience, delay, and potential extra expense, becausc Amerícan's fa¡es
were not as readily available from Sabre travel agencies as consumers bave come to expec! even

whcn American's fares were lower priced or ils schedules were superior to competing airlìnes'.
Tlús adverse impact on consumers was especially pronounced here in this County and in other
a¡cas where American is the prefened airline.

.

92.

Extensive media coveragç

of Sabre's retaliatory actions

gave consumers

the false impression that American is an ¿¡nti-consurner compmy, a dcception that Sabre opcnly

promoted. This led to negative word-of-mouth campaigns that are coordinated by Sabre and
other GDSs a¡d continue to this day, particularly

in social medi4 that question America¡r's

motivÊs, integrity, aud cornmitment to consume.rs.

93-

Sabre's secret and public biasrng of its displays, and its orchestation of a

boycott of American

caused American to lose significant nunrbers

of

ticket sales in amounts which are as yet impossible to quantify. In addition, Sabre's conduct
cause¡I American to lose goodwill and positive rela[ions

with havel agents, corporate customers,

'aod consu*ers in this Courty and elsewhere.

M.

Antitrust Market Definition

94.

The diskibution of airline fare, flight, and. availability information and the

provision of ¡eservations and tickcting capability to t¡avel âgents

("tìe provision of airline

booking services") is a relevant product market for ptuposes of the Texas Free Enterprise and

Antifrust Act of 1983 (''TFEAA.). The overwhelminþ majorþ of busïness travelers rely on
travel agents to identi$ ftights and fares aud to purchase tickets for havel on network airlines.
These travele¡s do not view other ways of purchasing airline travel, such as purchasing through

an airline website, as a reasonable substitute for pr:rchæing tickets through a havel agency.
32

EXHIBIT B

SWA App. 41

til

Because an airline that does not distribute its tickets through travel agencies would lose a

significant number of ticket sales for business travel to compcting airlines, American does not
consider the use of other distribution chnnnels, such as an ai¡line's website, to be a reasonable
substitute for the provision of airline booking services to lravel agents.

95.

The provision ofai¡line booking services to Sabre subscribers is atelevant

product submarket. Due in substantial part to the anticompetitive and exclusionary conduct at
issue

in this

case, American has

little abiliry to shift bookings from customers of

Sabre's

subscribers to other GDSs, ¿irect coìrn"c! or other distribution chan¡rels when Sabre increases its

booking fees or degrades the quality

ofits displays.

Thus, other providers of airline booking

services do not serve as a competitive check on Sabre's ability to ¡aise prices or reduce the
services

it provides to American. If American and other nettork airlines want to seli tickets to

travelers that use a Sabre travel agency, they have no practical alternative but to participate in the
Sabre GDS.

96.
N.

The relevant geographic rna¡ket is the United States.

Barriers to Eutry

97.

The relevant markets a¡e characterized by dnrable barriers to entry by new

GDSs that protect tbe monopoly power of the incumbent GDS providers. Since 2004, at least
three companies,

ITA, G2 Switchworks, and Farelogix, have attempted to launch a new GDS,

and ail have failed. Therc has been no successfi:l entry of â n€w GDS in thc U.S. in over 25

years. Defendants' anticompetitive conduct and agreements bave reinforc¿d these barriers to
entry by rival GDSs.

98.

Newer, more efficient tecbnologies such as America:r's dírect connect

system do not face the same entry baniers from fixe,rl costs and network effects as

a

GDS

enhant. Howevet, defendanæl anticompctitive conduct and agreements have erected substantial
33

EXHIBIT B

SWA App. 42

barriers

to entry by alte.mative

methods

of providing airlinc booking services, and have

effectively foreclosed altemative distribution systems from the market.

O.

I\{arket Power

gg.

The market for the provision of airline booking services in the United

States is highly concentuated, with only a few rnarket participants. Sabre possesses substantial
market power in this markel.

.

100.

Sabre possesses monopoly power

in the submarket for the provision of

in tire United States- In this

airline booking services to Sabre subscribers

subrnarket, Sabre

possesses a dominant market share. Sabre's monopoly power over Âmerican is demonstrated by

recent events. For example, Sabre was able
degrading the quality

to double Àmerican's booking fees while

of services it provides Anerican by biasing its displays against

was not constrained in its abilify to take this action against American because
Ame¡:ica¡r would. not

it

also

it. Sabre

lcrew that

be able to respond to Sabre's actions by shifting its tickets sales to

alternative distribution channels. In fact, Sabrc has repeatedly demonstrated and used its power
to raise prices and e:<clude competitors.

First Cause of Action
@reach of Contract by Sabre Travel)

101.

American tealleges the material facts in the preceding paragaphs.

t02. The Amended PCA is a valid, enforceable

conhact binding on Sabre

Travel, and as a party American is entitled to sue for its breach. American has met all conditions
precedent lo and otherwise complied with the Amended PCA.

103. By intentionally

biasing, disfavoring a¡d disad.vanagng the display

American's content in its GDS, Sabre Travel has breached the Amended
material,

willful,

of

PCA. Its breach is

and without excuse.

34

EXHIBIT B

SWA App. 43

;'

104. By unìlaterally

increasing American's fees for flights bookecl by Sabre

iî
t,

i,

Subscribers through its GDS, Sabre Travel has breached the Amended

PCA. Its

breach is
1..

material, willful, and without excusc.

105.

::

1;

Americnn has been damaged by Sabre Travel's breaches of the Ameuded

.PCA.

Second Cause of Action

(Group Boycott in Violation of lhe
Texas Frce Enterprise and .r\ntitrust Âct of 1983 by All Sabre Defcndants)

106,

American re-alleges the material facts in the preceding paragraphs,

107.

In addition to operating the largest CDS in the United States, Sabre owns

and operates two online travEl agencies under the brand niuses Travelocify and Travelocity
Business

("TBiz"). Travelocity

and

îbiz

are horizontal competitors of Sabie's fravel agency

subscribers.

108.

Between November 2010 and- continuing through at least January 2011,

Sabre

35

EXHIBIT B

SWA App. 44

109. After it

was enjoined by this court from directiy biasing its primary

displays,

110. In f:rtberance of this

111.

conspiracy, Sabre subsequently

-

These agreements among Sabre

constitute an illegal group boycott intended to
cûerce American into abandoning its direct connect initiative.

Il2.

This group boycot! and Sabre's participation in it,'have directly

proximâtely caused injury to American's bwiness and property

and

in Texas. Additionaily, the

had an anticompetitive effect on

agréements betrveen Sabre

it

consumers

in Texæ.

consumers

to find and purchase tickets on American flights, American hæ sold fewer airline

Speoifically, as a result

of

these agreernents,

has been h¡rder for

tickets, and botli consumers a¡rd Anerican have been denied access to newer and more efficient
means of disuibuting airline services.' These ir¡juries,

in the form of

higher prices and less

innovation, are iqjuries to the competitive process and a¡e the type that antitrust laws are
intênded to prohibit and thus constitute antitrust injuries in Texas.

Thircl Cause of ¡\ction

rexasFreeE"Í:;#'T:ff
1

l3

.

åi#lå",iÎff #'Hgîr"åiil'ff..nur.odanrs)

American re-alleges the material facts in the preceding paragraphs.

114. Sabre hæ

enfered

into collusive

agreements

36

EXHIBIT B

SWA App. 45

I
I
I

t.

with fhe specific intent of preserving defendaut Sabre's

l:

:

monopoly over the provision
violation of thc 'l'exas

Fre e

of airline booking

services

to its travel agent subscribers in

Enterprise and Antitrust Act of I 983, Section t 5.05þ) of the Texas

Business and Commerce Code.

l
I
I'
t,

t:
I
I
¡

ì

115. In addition ø taking its own retaliatory

actions directed at American,

support Sabre's campaign to punish arrd retaliate

Sabre

against American for its efforts to introduce a colnpeting distribution model, di¡ect connect.

Recognizing the common financial interest that they share
charge supracompetitive booking fees, in response

to

in maintaining

Sabre's

ability

to

Sabre's requests,

These agreements were entered into rvith the specific intent to

inflict

severe fìnancial damage to

American so that it Would capitulate to Sabre's demands and abandon its efforts to establish a
competing rneans of providing airline booking services to fuavei agen.ts that includes American's
premium content.

116.

Sabre and

agreed

to take these

actions against American, with the common goal of excluding A¡nericants direct connect from

the market and preserving their long-term financial interest

in maintaining Sabre's ability to

ext¡act supracompetitive booking fees from Arnerican and other airline carriers. There is no
legitimate business justification for the retaliatory agreen:ents between and among Sabre

ll7.

Sabre's agïeements with other industry participants, including

arrd

I

have directly and proximately caused injury to American's business

and propeity

in Texas. Additionall¡ the

agreements betrveen Sabre

37

EXHIBIT B

SWA App. 46

had an anticompetilive effect on consurners in Texas. Specifically, as a rezult
i

of these agreernents, it has been ha¡der for consumers to find and purchæe tickets on ,q¡nerican
flights, American has sold fe'"ver airline tickets, and both consuners and Arnerican have been
denied access to newer an<l more efficient means of dist¡ibuting airline services. These injurics,

in the form of higher prices and less innovation, are injuries to thê competitive process and are
the type that antitrust l¡ws are intencled to prohibiL ancl thus constitute antitnrst injuries in Texas.

i

:
:

tÌ
i
i

Ï'ourth Cause of ActÍon.
I

rex

a

s

Ì-r ce E nre

II
1

B.

19.

rp,Íiäiff

i-i:i, T J:i

ii;i ii'ff

s ab r e

o * ren

aa n

ts)

American realleges the material facts in the precedíng paragraphs
Sabre possesses rnonopoly power in the market for the provision of airline

booking sçrvices to travel agencies that subscribe to its GDSs. Through anticompetitive and
cxclusionary acts and practices, Sabre has willfully maintained, and unless restained. by this
Court,

will

continue to maintain and abuse, that monopoly power- These practices inolude: (a)

requiring that American agree to restrictive contract terms, including the "full content" provision,
as a condition of participation in Sabre; (b) entering into reshictive contracts with travel agencies

that eflectively prevent American from incentivizing those agencies to use AA Direct Connect to

book flights on American; and (c) terminating and interfering with third party developers who
sought to assist American in implementing its direct connect system. Sabre has acted with intent

to illegally maintain its rnonopoly over the provision of ai¡line bookìng sewices to its subscribers
and its illegal conduct has enabled

it to do so in violation of the Texas Free Enterprise

Antitust Act 1983, Section 15.05(b) of the Texas Business

and

ancl Com¡ne¡ce Code.

120. ' Sabre's illegal conduct has directly and proximately caused injury to
American's business and property and to competition in Texas- American

will be forced to

38

.EXHIBIT B

SWA App. 47

cont¡nue paying monôpoly prices for access 1o Sabre's GDS, and Sabre

will

continue to block

price competilion among GDSs as well as competition from newer technology and more efficienl
meâns

of rtistribution of airline services to travel agents, These irijuries, in the form of higher

prices and less .innovation in Texas, are of the type the antitrust laws are intended to prohibit and
thr¡s constitute a¡titrust injuries in Texas.

l2l.

willful and/ot flagrant. Therefore, American is

Sabre's illegat contÌuct was

entitled to treblc damages, including reasonabie attorney fees, under Section i5.21(a)(1) ofthe
Texas Busiuess a¡rd Commerce Code.

122.

American has suffered and

will continue to suffer irreparable

harm due to

Sabre's illegal contact that carurot adequately be.compensated with money darnages. Because
America¡r's legal remedy

will

not be adequate to compensate for irreparable injuries inflicted by

Sabre, American is cntitled to permanent i4junctive relief.

Fifth Cause of ,¿\ction
(Agreements in Restraint of Trade in ViolatÍon of thc
Texas Free Enterprise and Antitrust Act of 1983 by All Sabrc Defendants)

123.

.A,merican rcalleges the material facts in the preceding paragraphs.

124. The

restrictive provisions

in

Sabre's contracts

subscribers constitute contracts in un¡easonable reshaint

with its tavel

agent

of trade or cornmerc€ in violation of

Section 15.05(a) of the Texas Business and Commerce Code.

.725.

The rest¡ictive provisions in Sabre's long-term contràcts,with American

and other participating aírline carriers constitute contracts in unreasonable restaint of hade or
cornmerce in violation of Section 15.05(a) of the Texas Bminess and Commerce Code-

L26.

Sabre's illegal conduct has directly and proximately caused injury to

Arnerican's business and property and

to

competition

in Texas. Sabre's

anticompefitive

39

EXHIBIT B

SWA App. 48

agreements rryith travel agency subscribers

and with participating airlines have

harmed

competition in fhe market for the provision of airline booking services to travel agents, and have

ì
i

dírectly and proximatcly caused injury to American's business and property. Specifrcally,

;:

:-

American

will

be forced to continue paying monopoly prices for acccss to Sabre's GDS, and

i:

ii
n

Sabrc

will continue to block price cornpetition among GDSs as rvell as competition frorn newer

I

I'

tecbnology and more efficient meâns of distribution of airline services to travel agents. These

I
I
I

i

injuries, in the form of higher prices and less innovation, are of the type the antitrust laws arc

ì

!

;

intended to prohibit and thus constitute antitrust iq¡udes.

127.

Sabie's illegal conduct was

willfi:I and/or flagrant. Therefote, American is

entitled to treble damages, inclurling reasonable attorney fees, under Section 15.21(a)(l) of the
Texas Business and Conrmercc Code.

.

.

128.

American has suffered and

will

continue to suffer irreparable harm due to

Sabre's illegat contact that cannot adcquately be compensated with money .lomages. Becausc

Arnerican's legal remedy

wiil

not be adequate to compensate for ineparable injuries inflicted by

Sabre, American is entitled to permanent i4junctive relief.

Siith

Cause

ofAction

(Agreement Not To Compete in Violation of the
Texas Free Enterprise and Antitrust Act of 1983 by All Sabre Defendants)

I79.

American realleges the material facts in the precedlng paragraphs.

130. Sabre and

have conspired and agreed wíth one anothe¡ not to

compete with one another

In

furtherauce

of that

conspiracy, Sabre and

communicated with one another, directly and through interrnedia¡ies

have regularly
to

40

EXHIBIT B

SWA App. 49

I

provide assurances that they would not implernent AA Direct Connect,

131.
restraint

of trade or

Thcse agreements constitutc a conspiracy aud/or contracts in rurreasonable
corrrmerce

in violation of Section

15.05(a)

of the Texas

Business and

Commerce Code.

132.

Sabre's illegal conduct has directly and proximately caused injury to

American's business and property and to competition
agreeluents

*ith

[have

iu Texas.

harrned competition

Sabre's anticornpetitive

in the market for the provision of

airline boOking services to travel agents, and have directly and proximately caused injury to
Atnerican's business and property. Specificall¡ American
monopoly prices for access to Sabrc's GDS, and Sabre

will

be forced to continue paying

will continue to block price competition

arrong GDSs as well gs compefition from newe¡ technology and more efficient me"ns of
distribution of airline services to t¡avel agents. These injruies, in the form of higher prices and
less innovation, are of the type the antitn:st laws æe intended to prohibit a¡d thus constitute
antitrust iqjuries.

133.

Sabre's illegal conduct was wilLñrl and/or flagranl. Thereforc, American is

entitled to heble damages, including reasonable attomey fees, under Section 15.21(a)(i) of the
Texas Br¡siness and Conrmerce Code.

134.

American has suffered and

lvill

continue to suffer ineparable harm due to

Sabre's illegal contact that cannot adequately be compcnsated with rnoney damages. Because

American's legal remedy will not be adequate to cornpensate for irreparable iqiuries inflicted by
Sabre, Amerîcan is entitled to permanent iqiunclive relief.

Seventh Cause of Action
Cfortious fntcrfercnce with Contract by All Sabre Defendants)

4t

EXHIBIT B

SWA App. 50

t

n'.r,i1.

::r¡:.lf

,.

¡'.

f ,¡J.,,,-.r

r,¡¡ .. ¡¡ r

135.

American realleges the material f¿cts in the preceding pruagraphs-

136.

: ;iirili

In order to sell tickets to the general air traveling public on American's

flights, all travcl agents must

137.

be granted

written permission to do

so by American.

American and each of the travel agents who sell tickäts on American,

íncludiug Sabre's travel agency subscribcrs (collectivel¡ the "Sabre Travel Agent Subscribers'),

are parties to the Agent Reporting Agreement known as the *ARC Agreement" The ARC
Agteement sets fofh the terms and conditions pursuantto which Sabre Travel Agent Subscribers
agree to

"faci[tate" the issuauce of tickets by airlines, including American, to fhe public ',in a

compeútive and efftcient rnanner." Among other things, the ARC Agreement requires those
Subscribers to

"at all times maintain ettucal standards of business... in its dealing with

clients, the public

... and þmerican]" and it proscribes "fraudul€Dt conduct."

138.
are parties to the

its

r\dditionatty, Arnerican and each of those Sabre Travel Agent Subscribers

AA

Addendum to the ARC Agreement (the "4.4. Addendum'). The

Addendum clarifies the "responsibilitìes and duties"

of

AA

those Subscribers under the ARC

Agreement. Among other fhings, the AA Addendum requires those Subscribers to "strictly
adhe¡e to.American's cuùent instructions, rules, ¡egulatiors, reQuirements, conditions of sale or

carriaþe, tariffs, and procedures
exchanging, refi:nding

.... in booking any reservation or issuing, reissuing, selling,

or reporting any ticket calling for hansportation on American"

and

prohibits those Subscribers from engaging in "fraudulent ticket activity,,'

139.

A¡rerican and certain Sabre Travel Agent Subscribe¡s also are pæties to

addition¿I agreernents. These agreements rewa¡d those Subscribers for "demonshating superior
performance

in the sale of air

transportation" on American. Arnong other things, these

agreements expressly require those Subscribers

to engage in "good faith dealing," to comply

42

EXHIBIT B

SWA App. 51

f"J)_

f I ifr¡,-¡l¡,'

rvith "all applicable federal, state and local larvs and regulations in the performance of the
serviccs" tJrereunder, and

to

use "information pertaining

to A¡nerican's

business

methodologies and strategíes" only to perform the¡eundet.

140.

Consequently, American has existing contractual relationships with

numerous Sabre Travel Agency Subscribers, includiug both brick and mortar travel agencies and

online travel agencies.

141.

By virtue of its position as the laigest GDS operator in the United

States,

its specific know'ledge of the industry in general, and its contractual relationships rvith the havel
agents and entities rsing its GDSs, including thc Sabre Travel Agency Subscribers, Sabre knew

or had reason to know of the existing confoacts betwecn American and the Sabre Travel Agency
Subscribers and of Americau's interest in these contacts. For example, the ARC Agreement and

AÂ Addendum are publicly available contracts.

L42. Sabrc

defendants have

willfirlly and intentiona[y interfered with

American's previornly existìng contrach¡al relationships
Subscribers, and deprivcd American

143.

with

Sabrc's Travel Agency

of the benefit of those relationships.

Specifically,I

Sabre defendants did so by engaging in improper and unjr:stified acts, and

including:
I

43

EXHIBIT B

SWA App. 52

iljil
I

¡

a

ö

t,

l

causing confu.siou or misunderstanding regarding the source or sponsorship

goods

or services in violation of the Texas Deceptive Trade

of

P¡actices-

I

I
I

l'
i'
I

Consumet Protection Act;

I
1.

t.

r

otchestrating, monitoring and/or participating

effort to engage in

t

engaging

in a concerted and. collective

a group boycott of American; and

ilr unlawful conducÇ as stated herein, in violation of the Texas

Free

Enterprise and Antitrust Act.

144.

Sabre knew (arrd, indeed, intended that) its con.duct would interfere with,

result in the breach of, hinder and/or impede or othenvise render performance substantially more
burclensome, di.fficult and expensive under the agreements between American and the Sabre

Travel Agency Subscribers.

145.

Sabre's conduct has proximately caused harm to Ame¡ican by caruing

American, ünong other things, to lose ticket sales that would have resulted from Sabre Travel

Agency Subscribers booking tickets on American ftights absent the interference by Sabre.
Sabre's conduct also has caused a significant amount

of unwar¡anted confusion, frustration, and

ânger among the air traveling public. Consequently, American's goodwill and its relationships-

which took years for American to develop-have been darnaged-

1,46. Because Sabre acted with

actu¿I.

malice to interfere witJr American's

existing contractual relationships with Sabre Travel Agency Subscribers, Àmerican seeks and is
entitled to recover exemplary damages.

Eighth Cause of Action
(fortious Interference rvith Prospecfive Contractual Relations by AII Sabre Defendnnfs)

L47.

American realleges the material facts in the preceding paragraphs,
44

EXHIBIT B

SWA App. 53

I

i

148. The

Sabre defendants have

Arnerican's reasonable expectation

of

willfully and íntentionally intcrfered wirh

prospcctivc business relationships with the travcling

public that rvould purchase tickets for air transportation on American. S¿bre's retaliatory actions
have, among other things, misled Sabre Travel Agency Subsc¡ibers and Corporate Customers
regarrling American's fare and flight availability. Sabre's actions also have (i) thwa*ed the
ability of the Sabre Travel Agency Subscribers to make reservatiorn for and otherwise sell airline

tickets

for flights on American, (ii) thwarted the ability of

reservations for tickets for flíghts on American, and

Corporate Custorners

to

make

(iii) thwarted the ability of America¡r from

issuing tickets sold through Sabre Travel Agency Subscribers, including

to

Coqporate

Customers, and

I49.

Sabre engageü

in

independently tortious and unlarvfuI acts by, among

other things, using misleading and deceptive acts and practices
disparaging American's serviccs by false

in commerce,

including by

or misleading representations of fac! which

have

interfered with ¡\merican's ability to sell tickets through Sabre Travel Agenoy Suhsøibers and to
Corporate Customers while Ame¡ican conÍinued to pursue direct connecl

150. But for Sabre's tortious

and unlawful conduct, there is a reasonable

probability that American and Sabre's Travel Agency Subscribers and Corporate Cwtomers
would have booked additional travel on American resulting in increased sales of American
tickets.

.

151.

Sabre knew and intended that its conduct would interfere with any firtr¡re

ticket sales on American by Sabre's Travel Agency Subscribers and to Corporate Custorners.

152-

Sabre's conduct has proximately caused harrn to American by cáusing

Àmerican to lose, ârnong other things, ticket sales that would have resulted from Sabre Travel

45

EXHIBIT B

SWA App. 54

li

I
I

Agency Subscribers ancl Corporate Customers booking tickets on American flights absent the
inte¡ference by Sabre. Sabre's conduct also has causccl a signifìcant amount of wrwarranted
confusion, frustratior¡ and anger among tl:e

air haveling public in general and American's

l,'
t:

t:
lr
i

'.:

;l

Corporate Customers

in particular. Coruequently, American's goodwill and its relationships

I
I

I.
I

rvith C<lrporate Custome¡s*which took years for American to develop-have been darnaged.

I

I

153.

Because Sabrc acted

prospective relationships

with achral malice to interfere with American's

with Sabre Travei Agency Subscribers and Corporate

Custorners,

American seeks and is entitled to recover exernplary darnages.

'
154.

.A.ttorney Fees

American has been required to retain attomeys to prolect its rights

anal

prosecute this claim. Pursuant to Tex. Civ. Prac. & Rem. Code $$ 38.001 American is entitled to
recover its reasonable attomey fees and costs necessarily expended in this nratter. All conditior¡s
precedent have been pcrformed or have occurred.

Jury Demand

155.

Arnerican demands that its claims be tried by a jury.

Prayer for Relief
For these reasons, plaintiff American Airlines, Inc. respectfully requests;iudgment against

all ofthe Sabrs defendants, after trial or final hearing,

as

follows:

")

The Court enter fi¡al judgment against the Sabre defcndants and
American on all its claims, as proven and supporled by the evidcnce;'

b)

The Court order the Sabre defendants to pay the amount of achral damages
Americair h¿s suffered as a result of Sabre's illegal acts, plus treble or exemplary
darnages, plus American's court costs and reasonable attorney fees incurrèd in

in favor of

pro secuting this action;

c)

The Court permanently enjoin the Sabre defendants inthe following respects:

46

EXHIBIT B

SWA App. 55

i
I
:
I

i

From entering into or enforcing any provision in any agreemeDt wilh

Ð

American rclated to participation in the sabre GDS that requires American

to provide Sabre with "Full Content. or prohibits American from
providing to any other GDS or distribution channel content that it tloes not
also provide to Sabre;

iÐ

'

From entering into or enforcing any provision in any agreement with
American related to participation in the sabre GDS that prohibits or
otherwise pr€vents American fiom providing finaàcial incentives to travel
âgents, corporate customers, or other industry players to book Âmerican
tickets through any other CDS or dist¡ibution cha¡urel that arc better or
otherwise different from the incentives it provides to book througb the
Sabre GDS;

iii)

From conditioning American's abilíty to participatc in the sabre GDS on
American agreeing uot to enter into, solicit encourage, or promoto
agreements to provide its contont directly to tavel agents, corporate
customers, or other industry players using AA Direct connect or similar
technology, or to publicly ma¡ket AA Direct Connect;

iu)

From entering into or enforcing any provision in any agreement with
travel agents, co4rorate customers, or other industry pþors that explicitly
or otherwise prevents such a party from obtaining Àmerican fare a¡â
flight information and booking American ftights tbrough AA Di¡cct
Connect;

v)

From biasing the display of American's fare and flight information,
booking away from American's flights, increasing American's booking
fees, or solicitilg or encouraging travel agents, corporate customers, or
other indusby players to do so;

vi)

From ¡etaliating against Americar¡ or soliciting or encouraging travel
agents, corporate customers, or other industry players to retaliate against
American, including by biasing the display of ¡\merican's fare and ftight
information, increasing booking fees to Amerícarq or booking away frõm
American flights, because American uses or promotes AA Direct cãnnect
or similar technolog¡1

vii)

From retaliating in any way, including by terminating its agreements,
against any technology çonxpany that works with American to implement
AA Direct Connect;

viiÐ

From taking any action, including .tbe enforcement of conhactu¿l
provisions, to prevent or impede the aggregation of AA Direct connect
inforrration with fare and flight information from sabre's GÐs, or to

47

EXHIBIT B

SWA App. 56

i.r

i

I
I

prevent or impede the interoperation

of AA Direct connect.with other

i:
I

computer systems, including front-, mid-, and bacþofûce systems;

ix)

I;

From imposing discrÍminatory fees for entering "passive segments" i.nto
the Sabre GDS; and
ri

x)
d)

I

From refì.rsing to accept Passenger Name Records ("pNfu',) fi.om AA
Direct Connect into Sabre's TRAMS systems.

'fhe court enter a take nothing judgment for Anerican and against the

sabre

defendants on their counterclaims;

I

I
I
I

:.

Ð

The court order the sabre defendants to pay pre-judgment and post-juclgment
interest as nay be allowed by law; and

Ð

the Court grant to Americarr all additional relief
jwtly entitled, whether at law or in equíty^

to which it has shown ìtself to be

I

I
I

l,

48

EXHIBIT B

SWA App. 57

ii

I

t,

Respectfirlly submittcd,
'I
i

X

OF COUNSBL:

I

t:
I

Bill F. Bogle

I
I

WE[L, GOTHSI{AL & MANGES LLP

State BarNo. 02561000

Richard ¡\. Rothman Qtro hac vìce)

767Fifr¡Avenue
New Yorþ New York 10153
(2r2)310-8426
(2t2) 3t0-828s (Fax)

Roland K. Johnson
St¿te Ba¡No. 00000084

TIARRIS, FINLEY & BOGLE, P.C.
777 j|rla:nStreet, Suite 3600

DEWBY & LEBOEUF LLP
MJ Moltenbrcy Qro hac více)
1101 NewYork Avenue, N.W.
Washington, D.C.20005
Qoz)346-8738
QaÐ346-8t02 (l'ax))

:

t.

Fort'Worth, Texas 761 02
[phone]
[phone] (Fax)

R

Paul Yetter

Stare Ba¡ No. 22154200

A¡naRohran
State Bar No,24046761

.

YETTER COLEMÄN LLP
909 Fannin, Suite 3600

Ilouston, Texas 77010
[phone]
[phone] (Fax)
Yolanda C. Ga¡cia
State Bar No.24012457
WBÏL, GOTSHAL & MANGES LLP

200 Crescent C1., Suite 300
'
Dallas,Texas 75201
Qt4) 746-?800

Qt4)746-7777 (Fax)

CERTTFICATE OFSER\TCE

I certify that on thìs /3 th day of lanuary,2012, a true copy of this docurnent was served
on all counsel forthe Sab¡e defendantsbyhand delivery and/or ernail.

é*#eø
Bill F. goCte

313527

49

EXHIBIT B

SWA App. 58

I