This post is part of Hub and Spoke series on Antitrust Rulebook Rewrites and Pricing Algorithms. You can find previous installments here: Antitrust Enforcement and President Trump’s AI Action Plan; The Time Has Come to Regulate State Aid in the U.S.; New Developments in the Treatment of Pricing Algorithms; Continuing Antitrust Scrutiny of Algorithmic Pricing.
Consumers’ frustration with air travel has reached a peak,[1] fueled by junk fees, delays, cancellations, safety concerns, oversold flights, and lost or damaged baggage.[2] Many believe flying is worse than ever—despite the federal government’s $50 billion pandemic era bailout—and conditions may soon deteriorate further.[3]
In May, Airlines for America, the industry’s main lobbying group, petitioned the Department of Transportation to scale back consumer protections, including reducing data published in the Air Travel Consumer Report on delays, cancellations, complaints, and lost luggage.[4] The group also sought repeal of the rule requiring refunds for long-delayed flights. On September 4, 2025, the White House announced it would stop enforcing that rule.[5]
Airline consolidation has amplified these challenges. The four largest carriers—American, Southwest, Delta, and United—control 74% of U.S. capacity, with even greater dominance at the regional level.[6] Since deregulation in the 1970s, airlines have concentrated operations through hub-and-spoke networks, creating “fortress hubs” that some argue allow them to raise prices on routes in and out of those airports.[7] Against this backdrop, two industry practices are drawing increasing antitrust scrutiny: surveillance pricing and horizontal shareholding.
Surveillance pricing
Private and public enforcers have recently targeted algorithmic pricing as a key focus of antitrust scrutiny, reflecting its growing prominence in enforcement agendas.[8] The growth of algorithmic pricing has also prompted calls for a legislative solution.[9] Of particular concern is surveillance pricing, a type of algorithm that incorporates personal consumer data to set prices.
Airlines were one of the first industries to adopt dynamic pricing.[10] What started as ticket clerks manually adjusting the prices of last-minute bookings to fill empty seats, now relies on advanced algorithms and big data analytics to set prices according to “historical booking patterns, competitor pricing, time until departure, seasonality, and even weather conditions.”[11] While not inherently unlawful, algorithmic pricing can violate antitrust laws if (for example) it facilitates coordination among competitors, such as if a common algorithm vendor allows prices to be automatically aligned.[12]
Concerns about airlines’ pricing practices have grown over the past year. Most recently, Delta has drawn scrutiny when an executive stated on its Q2 2025 earnings call that the airline planned to “deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company.”[13] Senators Ruben Gallego, Mark Warner, and Richard Blumenthal responded with a letter expressing their concern that AI pricing could lead to higher fares and threaten consumer privacy.[14] Months earlier, Senator Blumenthal joined Senators Maggie Hassan and Josh Hawley in expressing concerns that Spirit and Frontier use even non-personally identifiable data (e.g., ZIP codes and browser histories) to charge passengers “different prices for the same seat type based on their personal characteristics.”[15] The In re Multiplan decision, in which a district court in Chicago declined to dismiss a conspiracy to monopolize claim based in part on algorithmic pricing technology, may embolden those seeking to level similar claims against the airline industry.[16]
Horizontal shareholding
The second antitrust theory has been long proposed but is recently finding new life. Horizontal shareholding occurs where institutional investors like mutual funds and asset managers own significant stakes in multiple companies that compete directly in the same market.[17] This structure raises concerns because investors with ownership stakes in rivals may prefer overall industry profitability over inter-firm competition. In Texas v. Blackrock, a district court declined to dismiss claims that investors coordinated to reduce coal production through ESG commitments, raising prices for consumers.[18] The ruling suggests even minority shareholders may face liability if they influence competitors’ strategies to diminish competition among them. Many have long argued that this reasoning could extend to airlines, where major institutional investors hold significant stakes across carriers. Some economists have even famously argued that airfares are 3-7% higher as a result of the common shareholding.[19] Plaintiffs may argue that overlapping ownership pressures airlines to avoid price competition—transforming what was once seen as a structural concern into a potential conspiracy. As calls to “fix” air travel grow louder, antitrust enforcement targeting algorithmic pricing and horizontal shareholding may become key tools for those seeking to rein in
[1] Megan Cerullo, These airlines had the most and least passenger complaints in 2024, CBS News (May 16, 2025, 9:24 AM EDT), https://www.cbsnews.com/news/best-worst-airlines-complaints/.
[2] Teresa Murray, Plane Truth 2025: Airline complaints rise, U.S. PIRG (May 15, 2025), https://pirg.org/edfund/resources/plane-truth-2025/.
[3] Aaron Gordon, Flying Is Worse Than Ever After Massive Airline Bailout, Consumer Watchdog Says, Vice (Mar. 29, 2023 11:12 am), https://www.vice.com/en/article/flying-is-worse-than-ever-after-massive-airline-bailout-consumer-watchdog-says/.
[4] William J. McGee, U.S. Airlines Try to Abandon Passenger Rights and Performance Reports—to Secretly Police Themselves, Frommers (Sept. 4, 2025), https://www.frommers.com/tips/miscellaneous/u-s-airlines-try-to-abandon-passenger-rights-and-performance-reports-and-secretly-police-themselves/.
[5] David Shepardson, US drops Biden plan to require airlines to pay compensation for disrupted flights, Reuters (Sept. 4, 2025, 7:33 PM EDT), https://www.reuters.com/legal/government/us-drops-biden-plan-require-airlines-pay-compensation-disrupted-flights-2025-09-04/.
[6] OAG, The Biggest Airlines in the US (July 1, 2025), https://www.oag.com/blog/biggest-airlines-in-the-us#:~:text=The%20%22big%20four%22%20US%20airlines,of%20538%20
million%20between%20them.
[7] William J. Mcgee & Ganesh Sitaraman, How to Fix Flying: A New Approach to Regulating the Airline Industry, Am. Econ. Liberties Proj. and Vanderbilt Pol’y Accelerator at 5 (January 2024).
[8] James J. Kovacs, Continuing Antitrust Scrutiny of Algorithmic Pricing, SCL-LLP.com (Sept. 30, 2024), https://scl-llp.com/continuing-antitrust-scrutiny-of-algorithmic-pricing/; Harrison McAvoy, New Developments in the Treatment of Pricing Algorithms, SCL-LLP.com (July 2, 2025), https://scl-llp.com/new-developments-in-the-treatment-of-pricing-algorithms-the-in-re-multiplan-decision-congresss-rejection-of-an-ai-regulation-moratorium/.
[9] See, e.g., Prohibiting Surveillance Pricing and Wages (Feb. 2025), available at https://www.economicliberties.us/wp-content/uploads/2025/02/Real-Surveillance-Prices-and-Wages-Report.pdf.
[10] Grace Baldwin, The History of Dynamic Pricing in 7 Minutes (Or Less), Omniaretail (Oct. 28, 2024), https://www.omniaretail.com/blog/the-history-of-dynamic-pricing.
[11] Marijana Bjelobrk, The turbulence of dynamic pricing in the airline industry, Price2Spy (Mar. 13, 2024), https://www.price2spy.com/blog/dynamic-pricing-in-the-airline-industry/.
[12] Max Landaw and John Allaire, Antitrust & Other Legal Risks in the Age of Algorithmic Pricing, InfoLawGroup (Feb. 17, 2025).
[13] David Shepardson, Delta plans to use AI in ticket pricing draws fire from US lawmakers, Reuters (July 23, 2025, 2:27 PM EDT), https://www.reuters.com/sustainability/boards-policy-regulation/delta-plans-use-ai-ticket-pricing-draws-fire-us-lawmakers-2025-07-22/.
[14] Letter from Senators Gallego, Blumentahl, and Warner to Ed Bastian (July 21, 2025), available at https://www.gallego.senate.gov/wp-content/uploads/2025/07/Delta-AI-Letter.pdf.
[15] Letter from Senators Hassan, Hawley, and Blumenthal to Ted Christie and Barry Biffle (Jan. 22, 2025), available at https://www.hassan.senate.gov/imo/media/doc/airlines_letter.pdf.
[16] See McAvoy supra note 8.
[17] Keagan Potts, Anti-ESG Sentiment Spurs States to Test Horizontal Shareholding Antitrust Theory, SCL-LLP.com (Dec. 10, 2024), https://scl-llp.com/anti-esg-sentiment-spurs-states-to-test-horizontal-shareholding-antitrust-theory/.
[18] Texas v. Blackrock, Inc., No. 6:24-cv-437-JDK, 2025 U.S. Dis. LEXIS 147891 (E.D. Tex. Aug. 1, 2025).
[19] José Azar et al., Anticompetitive Effects of Common Ownership, 73 J. of Fin., no. 4, 2018, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2427345.
