Exploring Industry Practices on Distribution and Display of Airline Fare, Schedule, and Availability Information, 75481-75487 [2016-26191]

Agencies

• DEPARTMENT OF TRANSPORTATION
• Office of the Secretary

[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)]
[Notices]
[Pages 75481-75487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26191]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

[Docket No. DOT-OST-2016-0204]


Exploring Industry Practices on Distribution and Display of 
Airline Fare, Schedule, and Availability Information

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION: Request for Information (RFI).

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SUMMARY: The industry group for travel sites, a number of its members 
which include online travel booking sites, and certain members of 
Congress have expressed concerns to the Department of Transportation 
(DOT or Department) regarding airline restrictions on the distribution 
and display of airline flight schedule, fare, and availability 
information (``flight information''). Specifically, concerns were 
raised about practices by some airlines to restrict the distribution 
and/or display of flight information by certain online travel agencies 
(OTAs), metasearch entities that operate flight search tools, and other 
stakeholders involved in the distribution of flight information and 
sale of air transportation. Airlines state that it is important for 
them to maintain control over the display and distribution of airline 
flight information while OTAs and metasearch entities that operate 
flight search tools state that actions taken by airlines to restrict 
the distribution or display of flight information are anticompetitive 
and harming consumers.
    The Department is interested in learning more about this issue. 
Pursuant to the Department's aviation consumer protection authority, we 
are requesting information on whether airline restrictions on the 
distribution or display of airline flight information harm consumers 
and constitute an unfair and deceptive business practice and/or an 
unfair method of competition. The Department is also requesting 
information on whether any entities are blocking access to critical 
resources needed for competitive entry into the air transportation 
industry. Finally, we are requesting information on whether Department 
action is unnecessary or whether Department action in these areas would 
promote a more competitive air transportation marketplace or help 
ensure that consumers have access to the information needed to make 
informed air transportation choices.

DATES: Responses should be filed by December 30, 2016.

ADDRESSES: You may file responses identified by the docket number DOT-
OST-2016-0204 by any of the following methods:
     Federal eRulemaking Portal: go to https://www.regulations.gov and follow the online instructions for submitting 
comments.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Ave. SE., West Building Ground Floor, 
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Ave. SE., between 9:00 a.m. and 5:00 p.m. ET, 
Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    Instructions: You must include the agency name and docket number 
DOT-OST-2016-0204 at the beginning of your submission. All submissions 
received will be posted without change to https://www.regulations.gov, 
including any personal information provided.
    Privacy Act: Anyone is able to search the electronic form of all 
submissions received in any of our dockets by the name of the 
individual submitting the document (or signing the submission, if 
submitted on behalf of an association, business, labor union, etc.). 
You may review DOT's complete Privacy Act statement in the Federal 
Register published on April 11, 2000 (65 FR 19477-78), or you may visit 
https://DocketsInfo.dot.gov.
    Docket: For access to the docket to read background documents and 
comments received, go to https://www.regulations.gov or to the street 
address listed above. Follow the online instructions for accessing the 
docket.

FOR FURTHER INFORMATION CONTACT: Kyle-Etienne Joseph, Trial Attorney, 
or Kimberly Graber, Chief, Consumer Protection and Competition Law 
Branch, Office of the Assistant General Counsel for Aviation 
Enforcement and Proceedings, U.S. Department of Transportation, 1200 
New Jersey Ave. SE., Washington, DC 20590, 202-366-9342, 202-366-7152 
(fax), kyle-etienne.joseph@dot.gov or kimberly.graber@dot.gov (email).

SUPPLEMENTAL INFORMATION:

Background

    Various entities have raised concerns to the Department regarding 
airlines restricting the distribution or display of information on 
their flights. We initially became aware of the issue in connection 
with certain airlines placing restrictions on flight information being 
displayed by metasearch sites that operate flight search tools. In a 
proposed rule, the Transparency of Airline Ancillary Fees and Other 
Consumer Protection Issues (``Consumer Rule III NPRM''), the Department 
sought information relating to a wide variety of distribution issues 
including information about the relationships between entities involved 
in the distribution of air transportation information. 79 FR 29974 (May 
23, 2014). In the Consumer Rule III NPRM, the Department posed 
questions related to airline restrictions on the display of flight 
schedule, fare, and availability

[[Page 75482]]

information. The Department stated that it was ``considering whether 
carriers should be prohibited from restricting the information provided 
by ticket agents when those ticket agents do not sell air 
transportation directly to consumers but rather provide consumers with 
different airlines' flight information for comparison shopping.'' 79 FR 
29970, 29974 (May 23, 2014).
    While the rulemaking was pending, representatives of certain OTAs 
and representatives of metasearch sites focused on travel, and their 
outside counsel, met with Department representatives and urged the 
Department to consider taking action. Those entities stated that 
airlines that restrict distribution of airline fare, schedule, and 
availability information to metasearch sites are engaging in unfair 
practices and unfair methods of competition. They further stated that 
they were focused on enforcement action or industry guidance rather 
than rulemaking. See Docket item DOT-OST-2014-0056-0776.
    Subsequently, many questions and concerns have been raised with the 
Department by members of Congress as well as various stakeholders 
regarding airline restrictions on the distribution and display of 
flight information by third parties. The Department met with 
representatives from OTAs, metasearch entities, airlines, and other 
industry stakeholders to learn about the issue and how airline 
decisions to place restrictions on the distribution and display of 
airline flight information may impact both consumers and the broader 
air transportation industry. The Department wanted to understand 
whether the issue of primary concern to industry stakeholders was (1) 
airlines refusing to provide any flight information to non-airline 
entities such as an OTA or metasearch entity; (2) airlines providing 
flight information to non-airline entities but placing restrictions on 
how that information is displayed; or (3) airlines providing flight 
information to an OTA but restricting the OTA from distributing that 
information to a metasearch entity that operates a flight search tool 
but does not itself sell tickets. In addition, the Department wanted to 
understand the impact on consumers.
    In meetings with representatives of airlines and online travel 
entities, the Department asked about the restrictions and why some 
airlines are restricting some OTAs, metasearch entities that operate 
flight search tools, or other industry stakeholders from accessing 
flight information or from distributing and displaying flight 
information. The Department also asked how such restrictions may impact 
consumers who use OTA and metasearch Web sites to research and book air 
travel.
    The Department learned that some airlines have issued cease and 
desist letters to some OTAs demanding that these companies stop 
distributing airline flight information to some metasearch entities 
that operate flight search tools or have included language in their 
contracts with OTAs prohibiting them from sharing airline flight 
information with any metasearch entity that has not been approved by 
the airline. Additionally, some airlines have issued letters to 
metasearch entities operating flight search tools demanding that these 
companies stop displaying the airline's flight information or limiting 
how the entities display the airline's flight information on their 
flight search tools.
    Some airlines have explained that such actions are because there 
are certain Web sites marketing air transportation operated by entities 
with which the airline does not want to be associated because the 
entities provide inaccurate or incomplete information, or provide poor 
customer service. Additionally, certain airlines have alleged that some 
of these entities may have engaged in fraud. Further, several airlines 
have stated that they wish to control how the information regarding 
their flights is distributed so that the airline can market services 
the way it chooses, through the outlets it chooses. Some airlines also 
state that controlling the outlets through which information on their 
flights is distributed helps control their distribution costs.
    Historically, competition in airline distribution has contributed 
to technological and retail innovation that has benefited both industry 
stakeholders and business and leisure air travelers and further 
enhanced airline competition. Meanwhile, airlines and ticket agents had 
commercial incentives to display airline information to consumers as 
widely as possible. Generally, market forces should ensure that 
airlines will continue to display their fares in the outlets where 
consumers want to find them and that those same market forces would 
then result in airlines accruing the commercial benefits of displaying 
their services in as many reputable outlets as possible. However, some 
stakeholders have argued that the marketplace is no longer balanced and 
consumers are being harmed so the Department should not rely on market 
forces to resolve these distribution and display issues.
    On April 15, 2016, the White House issued Executive Order 13725: 
Steps to Increase Competition and Better Inform Consumers and Workers 
to Support Continued Growth of the American Economy (the ``Executive 
Order''). The Executive Order expresses the importance of a fair, 
efficient, and competitive marketplace and notes that consumers need 
both competitive markets and information to make informed choices. The 
Department shares the goal of ensuring consumers are provided with 
information they need to make informed choices. In particular, as 
directed in the Executive Order, the DOT wants to identify any specific 
practices in connection with air transportation, such as blocking 
access to critical resources, that may impede informed consumer choice 
or unduly stifle new market entrants and determine whether the 
Department can potentially address those practices in appropriate 
instances. The issues raised in connection with airlines restricting 
ticket agents' ability to distribute or display flight information may 
potentially create the type of undue burdens on competition that the 
Executive Order has directed agencies to address. However, the 
Department needs to learn more about the issue to understand whether 
Department action is appropriate.

Departmental Authority Under 49 U.S.C. 41712 and 40101

    Under 49 U.S.C. 41712, the Department has authority to prevent 
unfair or deceptive practices and unfair methods of competition. 
Certain OTAs and metasearch entities have stated that airline 
restrictions on the distribution and display of flight information 
amount to an unfair, deceptive, or anticompetitive practice that harms 
consumers and an unfair method of competition, therefore the Department 
has authority to act under 49 U.S.C. 41712. Meanwhile, airlines have 
stated that the manner in which they distribute their fare, schedule, 
and availability information is a private contractual matter between 
airlines and third parties. Airlines further contend that they have the 
right to determine who they do business with and where and when their 
content is displayed. They state that the Department has no role in 
this issue because airlines are not engaging in any unfair or deceptive 
practices or unfair methods of competition.
    The Department also is mandated to encourage and enhance consumer 
welfare through the benefits of a deregulated, competitive air 
transportation industry under the Airline Deregulation Act of 1978. The 
Department places maximum reliance on competitive market forces and on

[[Page 75483]]

actual and potential competition while preventing unfair, deceptive, 
predatory, or anti-competitive practices in air transportation pursuant 
to 49 U.S.C. 40101. As a general rule, the Department does not 
intervene in private contractual agreements between airlines and third 
parties unless there is a market failure. However, to the extent 
commercial arrangements constitute or further an unfair or deceptive 
practice or unfair method of competition, resulting in harm to 
consumers, it would be within the Department's authority to prohibit 
parties from implementing such agreements or place restrictions on such 
agreements. As a part of any review of potentially unfair or deceptive 
practices or anti-competitive behavior by an airline or ticket agent, 
the Department considers legal precedent to make sure that any action 
taken is within the boundaries of Departmental authority.
    Accordingly, the Department is requesting information on whether 
any entities are blocking access to critical resources needed for 
competitive entry into the air transportation industry, whether 
Department action in this area would promote or hinder a more 
competitive air transportation marketplace, or whether Department 
action would help ensure that consumers have access to the information 
needed to make informed air transportation choices.

Distribution of Airline Flight Information and Airline Restrictions

    The distribution of airline flight information is a complicated 
process that involves a number of industry stakeholders but for 
consumers it is currently relatively simple to obtain flight 
information from airline Web sites and to find and compare flight 
information on online travel entity Web sites Consumers routinely book 
air transportation through direct and indirect (non-airline) channels, 
including through Web sites that operate flight search tools that 
either lead consumers directly to airline Web sites or to an OTA with 
the authority to book tickets on behalf of an airline.
    Airlines make flight information available through their own 
channels, such as airline Web sites, call centers, and airport agents, 
as well as outlets that range from traditional ``brick and mortar'' 
travel agents and corporate travel agencies to OTAs. Although airlines 
with sufficient market presence and high load factors may have 
incentives to limit the outlets through which their fares are 
displayed, airlines are generally motivated to ensure their flight 
information is widely available to increase consumer exposure and 
generate sales. Historically, the most efficient and cost effective way 
for airlines to distribute flight information was to provide it to 
entities that consolidated the information of multiple airlines and 
made it available to interested parties. Accordingly airlines have in 
the past provided information on their flights with few or no contract 
restrictions on the redistribution of flight information.
    Industry participants, such as travel agents and metasearch 
entities that want the flight information of multiple carriers, have in 
the past been able to obtain flight information by subscribing to 
distributors of schedule information such as the Official Airline Guide 
(OAG) and Innovata, distributors of fare and fare related data such as 
the Airline Tariff Publishing Company (ATPCO) and Societe 
Internationale de Telecommunications Aeronautiques (SITA), and global 
distribution systems (``GDS''), which aggregate and distribute combined 
flight information that generally includes schedules, fares, and 
availability to subscribers. It is our understanding that in most 
cases, OTAs that market flight information directly to the public 
through Web site displays obtain that information from GDSs as their 
primary non-airline source. OTAs sometimes distribute flight 
information obtained from GDSs and other entities onward to metasearch 
entities that operate flight search tools. These metasearch entities 
often combine information obtained from OTAs with information obtained 
directly from GDSs and other distributors and/or airlines. Regardless 
of the source, the information is generally combined and displayed on 
online travel sites marketed to consumers in flight search tools 
displaying flight information for multiple airlines.
    Just as airlines have financial incentives to widely distribute and 
display information on their flights, OTAs and metasearch engines 
operating flight search tools have financial incentives to distribute 
and display airline information. It is common for metasearch entities 
that operate flight search tools to include in search results links to 
OTAs that are able to sell air transportation on behalf of an airline. 
Stakeholders have informed the Department that there are a number of 
fee structures that exist between metasearch entities operating flight 
search tools and the entities that provide them flight information, 
whether airlines or OTAs. In connection with the relationship between 
an OTA and a metasearch engine, although fee structures may vary, 
generally speaking, when consumers follow a link from a metasearch 
entity flight search tool to an OTA Web site that allows consumers to 
book flights, the OTA pays the metasearch site a referral fee. 
Additionally, OTAs generally receive payments from GDSs for bookings 
made directly on OTA Web sites. GDSs in turn are paid a fee by airlines 
for such bookings. Accordingly, although airlines often benefit from 
having their flights marketed through a variety of outlets, airlines 
prefer to have consumers book directly through an airline channel, for 
which the airline generally bears the cost of operating its own channel 
but avoids paying booking fees to others such as GDSs, OTAs, or 
metasearch entities.
    Certain airlines have placed restrictions on certain third party 
industry stakeholders such as GDSs and data aggregators, prohibiting 
them from distributing information to any entities that the airline 
does not approve. Additionally, certain airlines are prohibiting OTAs 
from distributing flight information on to metasearch entities, 
although it is not clear how many airlines have imposed these 
prohibitions. Some airlines are also prohibiting particular OTAs or 
metasearch entities from displaying flight information for an airline's 
codeshare partners, and at times, preventing OTAs and metasearch 
entities from displaying an airline's flight information altogether. In 
other instances, some airlines are prohibiting metasearch entities 
operating flight search tools from displaying flight information for 
that airline with any links to OTA Web sites. Instead, the only links 
must be to airline Web sites. As discussed below, representatives of 
ticket agents allege these airline restrictions harm consumers whereas 
airlines argue that they have legitimate business reasons for imposing 
these restrictions.

Availability of Flight Information and Concerns Regarding Proprietary 
Nature of Flight Information

    In connection with airline restrictions on ticket agent 
distribution or display of flight information, some ticket agents have 
stated to the Department that they believe flight information is public 
information and that airlines should not be allowed to place 
restrictions on it. Conversely, airlines believe flight information is 
both proprietary and protected under intellectual property laws and 
that airlines have the right to maintain control over its distribution 
and display.
    As a result of the availability of airline flight information 
through so many

[[Page 75484]]

outlets (e.g. GDSs, OAG, ATPCO, Innovata, etc.), some industry 
stakeholders believe that airline schedule, fare, and availability 
information is not airline property and is instead similar to bus or 
train schedules that are widely available to the public. Some OTAs and 
metasearch entities that operate flight search tools have stated that 
airlines have historically provided airline flight information to the 
general public and that it is purely factual data; therefore, according 
to these entities, airline flight information has historically not 
been, and still should not be, considered the intellectual property of 
airlines.
    On the other hand, airlines state that despite the fact that 
airline flight information has historically been disseminated and 
available to the general public, airlines have invested significant 
money in developing methods to set schedules and fares, to effectively 
market air transportation, and ultimately to fill as many seats as 
possible on the flights an airline operates. Further, unlike bus or 
train fares and schedules that change infrequently, airline fares, 
schedules, and availability can change many times a day in response to 
a competitive marketplace. According to many airlines, as a result of 
the investment that airlines have made in developing flight prices, 
schedules, and availability, the flight information that they produce 
and distribute to the air transportation industry is proprietary 
information.
    Additionally, airlines have indicated that they have an interest in 
controlling where and how flight information is displayed in order to 
control airline distribution costs and ensure adequate customer 
service. Unlike service providers and makers of consumer products that 
do not sell directly to the public and only sell through an 
intermediary, airlines sell their services directly to consumers as 
well as through agents. Despite this distribution model of direct and 
indirect channels, airlines generally retain control of fares, 
particularly in domestic air transportation, and do not allow agents to 
discount or increase fares or to play any role in establishing 
schedules or seat availability. As such, some airlines believe that 
because they control fares and the related services, they are entitled 
to retain ultimate control over how and where this information is 
distributed and/or displayed.

Consumer Options for Researching and Purchasing Air Transportation

    Some ticket agents have indicated to the Department that a 
potential consumer harm that may stem from allowing airlines to 
restrict the display and distribution of flight information is a 
reduction in consumers' ability to view a full range of flight options 
in one location. They also state that ticket agents that operate flight 
search tools typically display information in a manner that is helpful 
to travelers seeking to purchase air transportation. Flight search 
tools consolidate flight options for consumers on one Web site so that 
consumers do not need to visit multiple Web sites to identify the 
options for air travel on a number of airlines for a given itinerary. 
Such flight search tools may also combine the flights of multiple 
airlines or various one-way fares for consumers in an attempt to 
identify the most cost-effective and efficient itinerary. According to 
ticket agents, combining carriers, one way tickets, or both are options 
that average consumers would be unlikely to find on their own when 
searching multiple airline Web sites. These flight search tools often 
default to ranking flight options in order from the lowest to highest 
cost flight option but offer other ranking options as well, such as by 
particular airline, arrival time, or travel time. Consumers visiting 
these Web sites can determine which flight options best suit their 
needs and preferences, for example, by taking a flight at a less 
popular time, enduring a long layover in order to save money on air 
fare, or paying more for the convenience of a non-stop flight.
    Further, according to ticket agents, some flight options offered 
are only offered by ticket agents and not airlines. However, according 
to ticket agents, this is an area in which airlines are increasingly 
imposing restrictions on OTAs and metasearch entities operating flight 
search tools. These entities state that certain airlines are 
prohibiting ticket agents from offering flight options combining one 
way fares for different flight segments or from combining segments and 
fares from multiple carriers. For example, if a consumer wished to fly 
from Buffalo, New York to Hartford, Connecticut, and then to 
Washington, DC, and then return to Buffalo, it is often significantly 
less expensive to buy multiple one way tickets for this itinerary on 
different carriers as opposed to purchasing this itinerary as one group 
of flights from one carrier. Some airlines have limited the ability of 
ticket agents to book this itinerary as a series of one way flights. 
Flight search tools that combine one way fares may save consumers time 
and provide options the consumer would otherwise not be aware of. 
Searching for one way tickets on multiple carrier Web sites to find a 
multi-carrier itinerary that fits a consumer's needs might not yield as 
consumer-beneficial results.
    In addition, discounted tickets that OTAs offer as part of tour 
packages are not presented on airline Web sites. According to ticket 
agents, without the ability to efficiently view flight information 
across multiple airlines on a ticket agent Web site, transactions are 
less efficient. Consumers may need to visit numerous Web sites more 
than once in the days before purchasing air transportation to find a 
current fare for the most cost effective itinerary to match their 
travel plans. Ticket agents also note that some Web sites offer 
consumers the ability to review trends in pricing for various flights 
so that consumers can theoretically identify the optimal date to 
purchase a ticket before traveling, on-time performance information for 
flights, customer reviews of specific itineraries, optimal seat ratings 
\1\ for various aircraft, as well as hotel options, rental cars, and 
other products like entertainment. Additionally, according to ticket 
agents, research suggests that the more time-consuming it is for 
consumers to research and select airfare, the more burdensome, and 
potentially costly, air travel becomes for consumers.
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    \1\ Optimal seat ratings indicate which seats on an aircraft are 
the best seats to sit in during travel for a specific aircraft type 
and configuration.
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    On the other hand, many airlines state that airline limitations 
placed on OTAs and metasearch sites operating flight search tools do 
not harm consumers. Airlines note that they also provide on-time 
performance information and tour package options. Airlines observe that 
ticket agents are not alleging that airlines are attempting to place 
limitations on OTAs or metasearch entity product offerings unrelated to 
air transportation, nor have they alleged that airlines are trying to 
restrict displays of customer reviews of itineraries or airline seat 
ratings. Further, despite placing limitations on some OTAs and 
metasearch entities operating flight search tools, most airlines allow 
what they consider to be ``desirable'' OTAs and metasearch entities to 
distribute and display the airline's flight information. Meanwhile, 
some airlines note that one of the largest airlines in the U.S. does 
not distribute its flight information through GDSs or OTAs. Most 
consumers, particularly the most price sensitive consumers, generally 
search multiple Web sites, including those operated by airlines as well 
as ticket agent flight search tools, before purchasing air 
transportation. According to the airlines, their actions

[[Page 75485]]

have not had a significant impact on the search process that consumers 
use to identify and purchase or reserve air transportation.
    Airlines also observe that there has been a significant 
consolidation in the ownership of OTAs. Most leisure consumer bookings 
come through a small number of OTAs. Airlines assert that although 
consumers may believe they are comparing multiple outlets, several of 
those outlets are owned by the same parent company. According to 
airlines, the consolidation of OTAs is significant to flight option 
distribution and consumers may be harmed by limited OTA competition as 
those entities consolidate and no longer innovate to compete with each 
other.
    Moreover, many airlines state that they should maintain ultimate 
control over how their airline product is offered and displayed to 
consumers because the flying experience that airlines offer to 
consumers is a unique product that individual airlines have invested 
significant resources to develop. For example, airlines state that some 
ticket agent Web sites do not display airline information in a way that 
optimizes the product that airlines are offering to consumers. 
Specifically, some ticket agent Web sites have included outdated 
airline logos, presented information in what airlines believe to be a 
disorganized and suboptimal way, and failed to offer customers the 
tailored experience that airlines offer. Airlines have expressed 
concern about improper display of airline information or poor customer 
service experiences that they believe may negatively impact consumer 
perception of the airlines' brand. Airlines have stated that some 
examples of poor experiences include excessively long layovers that 
customers are unaware of when booking through ticket agents, the 
failure of ticket agents to process refund requests, an inability of 
ticket agents to accurately relay flight status and other important 
information to consumers in a timely fashion, and other negative 
interactions that consumers may attribute to airlines. Some airlines 
also allege they are concerned about entities that engage in fraudulent 
activity by selling fraudulent tickets for travel on well-known 
airlines. In some of these instances, consumers contact the airlines 
directly to request a refund for an invalid ticket. Airlines are 
concerned that consumers defrauded by such entities may believe that 
the airlines are to blame. Certain airlines have demanded that entities 
that they consider undesirable cease displaying the airline's flights. 
They have also placed contractual limitations on the ability of GDSs 
and OTAs to distribute flight information to unapproved entities.
    Further, airlines state that they allow access to their products 
through numerous OTAs and metasearch entities in addition to their own 
sites and that consumers are able to shop for air transportation on or 
through many of those Web sites. Airlines believe that the purchase of 
air transportation via the internet is an efficient process regardless 
of whether consumers access flight information through OTAs, metasearch 
entities that operate flight search tools, or airlines' Web sites. 
Accordingly, airlines assert that any Department action limiting 
airlines' ability to control how and where airline flight information 
is displayed would harm both consumers and the airline's brand. Several 
airlines also point out that it is in their financial interest to allow 
reputable OTAs and metasearch entities to display and distribute 
airline flight information despite a desire to have as many passengers 
book directly with the airline as possible. Airlines need to make their 
services available through the outlets that consumers choose to use. 
Bookings via OTAs in many instances account for a large percentage of 
airline sales and referrals from metasearch entities that operate 
flight search tools are also important. Meanwhile, GDSs have 
historically included provisions in contracts with airlines that 
require airlines to offer all of the same fares that the airline offers 
to ticket agents that subscribe to the GDS. Therefore, in many 
instances, airlines are not able to offer discount fares only available 
from the airline to drive consumers from purchasing through ticket 
agents to purchasing from the airline based on pricing. Accordingly, 
some airlines assert that it is not in their interest or even 
commercially viable to remove flight information from OTA or metasearch 
entity Web sites entirely. Some airlines have stated that, due to the 
quantity of bookings that originate on OTA or metasearch entity Web 
sites, it is unlikely that airlines would ever prevent all OTAs and 
metasearch sites that operate flight search tools from displaying and/
or distributing airline flight information.

Competition in the Airline Industry and Price Competition

    Some ticket agents assert that Web sites such as theirs can 
potentially better position new entrant airlines to compete with larger 
and more established airlines, especially considering recent airline 
consolidation. They state that new entrant airlines often offer 
consumers low ticket prices and increase the number of flight options 
for a given itinerary. This increase in air travel options tends to 
drive down airfares, which in turn allows more consumers to take 
advantage of air transportation. Some ticket agents also believe that 
new entrant airlines benefit from the exposure that they gain by 
advertising airfares on ticket agent Web sites alongside the fares 
offered by larger more established carriers. Some ticket agents allege 
that by allowing them to display and distribute flight information for 
all airlines that offer service for a given itinerary, ticket agent Web 
sites will promote price competition in some of the more concentrated 
markets where the dominance of legacy airlines and other larger 
airlines would otherwise lead to higher airfares for consumers.
    Airlines state that airline restrictions on the distribution and 
display of flight information is unrelated to airline market power. 
Accordingly, airlines assert that consolidation within the airline 
industry should not be taken into account when considering the issue of 
airline restrictions on ticket agent distribution or the display of 
flight information.
    Ticket agents also argue that by displaying flight combinations 
such as one way flights or flights on multiple carriers that are not 
offered by airlines, OTAs and metasearch entities operating flight 
search tools are creating price competition and improving consumer 
access to information.
    Airlines counter that not all carriers use non-airline distribution 
channels such as OTAs or metasearch entities operating flight search 
tools. According to some airlines, the fact that not every flight 
option is available through every non-airline flight information outlet 
does not support the idea that price competition is harmed. According 
to the airlines, flight information for most airlines is available 
through a variety of outlets, but more importantly, flight information 
for every airline is readily available on the airline's own Web site. 
Moreover, airlines have to publish information on their flights in 
order to sell tickets. Therefore, they do not believe price competition 
is harmed simply by some airlines limiting where that airline's flight 
information is displayed when the information is available elsewhere, 
such as an airline Web site.

Request for Information

    The Department has considered the information that has been 
provided thus far and now requests additional information from all 
stakeholders--airlines, ticket agents, consumers, and other affected 
parties. The Department

[[Page 75486]]

is not proposing to take any specific action at this time. Rather, the 
Department is requesting information that will assist the Department in 
determining whether airline restrictions on the distribution and 
display of flight information are causing consumer harm, are unfair or 
deceptive in some way, or are anticompetitive. If airline restrictions 
are causing consumer harm or are unfair, deceptive, or anticompetitive, 
the comments would assist the Department in determining what action is 
appropriate, if any. Also, consistent with 49 U.S.C. 40101, the 
Department places maximum reliance on competitive market forces and on 
actual and potential competition while preventing unfair, deceptive, 
predatory, or anticompetitive practices in air transportation. We are 
also requesting information on the extent to which airline practices to 
restrict the distribution and display of information on its flights 
benefits consumers. Further, the Department is specifically requesting 
information on whether any entities are blocking access to critical 
resources needed for competitive entry into the air transportation 
industry and whether Department action in this area would promote a 
more competitive air transportation marketplace. In addition, the 
Department is seeking information on whether action in this area would 
improve consumer access to the information needed to make informed air 
transportation choices. Information that provides historical or 
statistical data or peer-reviewed studies will be particularly helpful 
for determining whether or not Departmental action is appropriate in 
this area.
    As an initial matter, the Department requests information on the 
proprietary nature of flight information and whether the wide-spread 
availability of that information is relevant to airline restrictions on 
the distribution or display of flight information. Specifically, when 
flight information is released to consumers by airlines and made 
generally available to the public (e.g., published on an airline's Web 
site), do stakeholders consider this flight information to be factual 
non-proprietary information? Do stakeholders consider the airline 
schedule, fare or availability information, singularly or in 
combination, the proprietary information of the airline that produces 
the information? Do stakeholders consider the schedule, fare, and 
availability information proprietary only when this information is 
combined in one product but not when distributed separately?

Consumer Access to Information Needed To Make Informed Air 
Transportation Choices

    In connection with consumer options for researching and purchasing 
air transportation, what is the value that OTA or metasearch entity 
flight search tools provide? To what extent do consumers, including 
leisure travelers, small businesses and corporate customers, benefit 
from saved search costs, greater confidence in search results, access 
to lower fares, or more travel options than they would have obtained 
from separate searches of individual airline Web sites? In this request 
for information, have we accurately described the types of actions 
airlines have taken that impact OTA and metasearch entity Web sites? If 
not, what are those actions and how do they impact OTA and metasearch 
entity Web sites? What effect do those actions have on the utility of 
OTA and metasearch entity Web sites for consumers? Do ticket agents 
that provide flight search tools offer consumers any flight information 
that consumers cannot obtain by visiting multiple airline Web sites? 
What effect does an inability to display schedule, fare or seat 
availability information of a large, well-known airline, or group of 
airlines, have on the utility of air travel comparison sites for 
consumers? Would access to one or two of those categories of airline 
information without, e.g., seat availability information, be of any 
practical use on its own?
    It has been pointed out that not all airlines currently distribute 
information on their flights through OTAs or metasearch entities 
operating flight search tools and that those tools do not necessarily 
have the same level of information that is available on airline Web 
sites. Do airline restrictions currently placed on the distribution 
and/or display of airline flight information limit the ability of 
consumers to identify the best flight options available to meet 
consumer needs? If yes, how? Are the existing limitations of OTA or 
metasearch entity Web sites relevant to the ability of consumers who 
use those Web sites to identify the best flight options available to 
meet consumer needs?

Airlines Stated Reasons for Restricting Flight Information

    As explained above, airlines have stated that in some cases they 
are restricting the sharing and use of their flight information by some 
Web sites or entities that airlines believe are disreputable or simply 
do not market the airline's flights in a manner that the airline would 
like. Some airlines have indicated that OTAs or metasearch entities 
have provided inaccurate or incomplete information about airline 
services and products, provided poor customer service, or engaged in 
marketing practices the airline does not approve of, and have in some 
cases engaged in fraud. Airlines say such conduct tarnishes the airline 
brand, and for these reasons airlines are trying to prevent or restrict 
these entities from marketing and selling their airline's products and 
services. Thus, airlines claim that their actions to restrict use of 
their flight information benefit both airlines and consumers. Some 
airlines also acknowledge that they are attempting to direct more 
consumers to their own Web sites for financial reasons as well as 
marketing reasons. Are there any other reasons why airlines are 
restricting the sharing and use of their flight information? What 
information is available to determine the scope and magnitude of the 
problems described by airlines? How many entities engage in the 
practices as described by airlines, and what portion of the OTA and 
metasearch market do these entities represent? How many consumers use 
these Web sites? What is the average number of consumer complaints for 
each of these issues regarding such entities that airlines receive each 
year? How would DOT appropriately measure and evaluate the effects of 
the problems as described by airlines? Is action by DOT necessary to 
allow airlines to protect their legitimate interests and also ensure 
that consumers are able to make informed flight choices?

Effects of Airlines Restricting Use of Flight Information

    We note that flight information is available through airline Web 
sites. Would a reduction in the availability of airline flight 
information on non-airline Web sites due to airline restrictions on the 
distribution and/or display of such information have a significant 
negative impact on consumers? If so, what are those impacts, and do 
they disproportionately affect some subsets of consumers? According to 
the information provided to the Department, no airline has indicated an 
intent to withdraw completely from ticket agent Web sites. However, if 
an airline that currently distributes flight information through ticket 
agent Web sites withdrew completely from those Web sites, would that 
reduce or eliminate the ability of consumers to identify the most 
suitable flight options? If not, how many airlines would have to 
withdraw from ticket agent Web sites to

[[Page 75487]]

eliminate the ability of consumers to identify the most suitable flight 
options?
    Is there information to suggest that many airlines will eventually 
withhold flight information entirely from all or most Web sites that 
offer flight search tools? How many consumers would fail to investigate 
more than one airline Web site, with the result that they may not 
locate the optimal itinerary or fare?
    If it is essential for consumers to be able to view as many airline 
flight options as possible on OTA and metasearch entity Web sites to 
identify the best flight options, what information is essential? Is 
schedule information sufficient or are both schedule and fare 
information necessary? Do consumers need availability information to 
identify the best flight options?
    We note that airlines create fare rules and generally do not allow 
certain combinations of flight segments. Are consumers less likely to 
combine one-way fares when searching for an itinerary on multiple 
airline Web sites rather than a ticket agent Web site due to the amount 
of time it may take to identify these flights and pair them together by 
making multiple purchases?
    We note that some airlines are placing restrictions on OTAs and 
metasearch entity Web sites preventing them from displaying codeshare 
flights, which at times may be the cheapest or most efficient flight 
options for consumers. Are consumers less likely to discover these 
codeshare flight options when airlines restrict the display of these 
flights on OTA and metasearch Web sites? Can consumers gain access to 
the same information by visiting airline Web sites directly?
    Is Department action in connection with airline distribution 
practices necessary to ensure consumers have the information they need 
to make informed choices?

Competitive Air Transportation Marketplace

    In connection with competition between airlines, we are requesting 
information on the impact of airline restrictions on the distribution 
or display of flight information on competition. What value, if any, do 
OTA and metasearch entity Web sites that operate flight search tools 
provide in facilitating or enabling competition among airlines? Does 
having airline information available through multiple outlets, 
including ticket agent outlets, impact price competition? Would the 
absence of several airlines that currently participate in ticket agent 
outlets impact price competition? Does the ability or inability of 
metasearch entities that operate flight search tools to provide links 
to OTAs impact price competition?
    If restrictions placed on the distribution and/or display of 
airline flight information limits the flight options available on Web 
sites operating flight search tools that market multiple airlines, has 
that limitation in options lead to higher prices for consumers? If so, 
how? How would restrictions in the future potentially lead to higher 
prices?
    It is our understanding that most airlines do not permit fare 
``discounting'' by OTAs. Are OTAs or metasearch entities that operate 
flight search tools able to identify fares that are lower than fares 
that can be found on airline Web sites? Do OTAs receive discounts from 
GDSs which allow them to then price flights lower than airlines?
    Some ticket agents have stated that flight search tools are able to 
identify lower prices on OTA Web sites than are available on airline 
Web sites and that the lower fare or both fares are displayed absent 
any airline restriction. If lower prices are identified by OTAs, do 
these prices serve as a competitive check on airline prices when 
displayed on flight search tools adjacent to the prices offered by 
airlines?
    In the past, OTAs negotiated special deals, rates, and promotions 
from airlines that resulted in consumers obtaining discounted fares. 
More recently, it is our understanding that contractual arrangements 
between airlines, GDSs, and OTAs generally include provisions that 
prevent OTAs or airlines from offering discounted fares that are not 
available through all other outlets. Accordingly, discounted fares that 
might otherwise be available to consumers are no longer offered. We 
request information on how these types of private contractual 
arrangements impact consumers and whether they are unfair or 
anticompetitive.

Resources Needed for Competitive Entry

    Some stakeholders have argued that having flight information for 
multiple airlines available through the flight search tools of OTAs and 
metasearch entities operates a platform for smaller and new entrant 
airlines to compete with larger, better known airlines. They suggest 
that absent ticket agent Web sites that offer the flight information of 
multiple airlines, consumers will fly only well-known carriers that 
they recognize from advertisements and the airline's continuous length 
of operation in a given market. If OTA and metasearch entity Web sites 
do not provide the flight information of larger, better known airlines, 
will consumers stop using those Web sites? If consumers do not use 
those Web sites, and instead search only airline Web sites, will that 
impact the ability of smaller or new entrant airlines to compete with 
larger, better known airlines because consumers will not search Web 
sites that do not include largest airlines? Conversely, would the 
ability of new entrant airlines to compete with larger airlines be 
enhanced by the lack of competition if large, well-known airlines limit 
or do not permit information on their flights to be displayed on OTA or 
metasearch entity Web sites and therefore consumers find only smaller 
airline flight options on those sites? Is Department action in this 
area necessary to ensure airline restrictions on the distribution or 
display of flight information does not harm competition? If so, what 
action is appropriate?
    We are requesting information on all of the issues and concerns 
identified above and any information relevant to this issue.

    Issued this 18th day of October 2016, in Washington, DC.
Molly J. Moran,
Acting General Counsel.
[FR Doc. 2016-26191 Filed 10-28-16; 8:45 am]
 BILLING CODE 4910-9X-P