[Plura-list] Spirit warned investors that merging with Jetblue would be illegal

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2023/03/12/they-put-it-in-writing/

Today's links

* Spirit warned investors that merging with Jetblue would be illegal: Exhibit A for the prosecution.

* Hey look at this: Delights to delectate.

* This day in history: 2003, 2013, 2018, 2022

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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🧌 Spirit warned investors that merging with Jetblue would be illegal

Jetblue is trying to buy Spirit Airlines. It's a terrible idea. Consolidation in the US aviation industry has resulted in higher fares, less reliable planes, spiraling junk-fees, and brutal conditions for flight- and ground-crews. The four remaining US major airlines, who gobbled their rivals, are three times more profitable than their European counterparts:

https://www.economist.com/leaders/2017/04/22/a-lack-of-competition-explains-the-flaws-in-american-aviation

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/03/12/they-put-it-in-writing/#that-was-then

That's great news if you're an airline shareholder. It's terrible news if you're hunting for your lost bags, or if you're a flight attendant or pilot being squeezed, or if you're being hit for billions in covid bailouts - or if you're one of *one million Americans* who were stranded during Christmas week by the failure of Southwest Airlines' IT systems, which use duct-tape and wishful thinking to hold together the IT systems of all the airlines SWA bought:

https://pluralistic.net/2023/01/16/for-petes-sake/#unfair-and-deceptive

The collapse of competition in the US airline industry is the result of a deliberate policy, the "consumer welfare" theory of antitrust, which says that monopolies are "efficient" and good for the public. It's a theory that took root under Reagan, and was reaffirmed and expanded by every president, R or D, since.

Until now. For the first time in two generations, the Biden administration has taken up the neglected, noble art of trustbusting, blocking mergers and promising to break up the mergers we've already seen, through enforcers like Jonathan Kanter at the DoJ Antitrust Division and Lina Khan at the FTC:

https://www.eff.org/deeplinks/2021/08/party-its-1979-og-antitrust-back-baby

Which is bad news for the proposed Jetblue/Spirit merger. Last week, the DoJ filed suit to block the merger, joined by the AGs from NY, MA and DC.

https://storage.courtlistener.com/recap/gov.uscourts.mad.254267/gov.uscourts.mad.254267.1.0.pdf

Notably, Pete Buttigieg - who has been historically shy of using his prodigious powers as the boss of a large agency - will also block the merger:

https://www.transportation.gov/briefing-room/usdot-statement-justice-departments-lawsuit-block-proposed-jetblue-spirit-merger

Spirit's shares are in the toilet. Writing in his BIG newsletter, Matt Stoller explains why shareholders are bolting for the doors: the case against the Jetblue/Spirit merger is *incredibly* strong. A slam-dunk, even:

https://mattstoller.substack.com/p/an-end-to-airline-consolidation

Spirit, after all, is America's most famous budget airline. That means that it attracts fliers by undercutting the Big Four. That puts downward pressure on the Big Four, who are faced with the choice of taking lower profits to retain fliers' business, or losing *all* the profit when those fliers take Spirit. Remove Spirit from play and that downward pressure on fares disappears. You don't need newfangled "neo-Brandeisian" antitrust to see why this is bad - even under "consumer welfare" antitrust, anything that will obviously make prices go up is prohibited (indeed, this is the *only* thing consumer welfare antitrust cares about).

How do we know that a Jetblue/Spirit merger is a price-increasing, illegal antitrust violation? *Spirit says so*.

This is truly delicious! You see, last year, there was a bidding war for Spirit and Jetblue was the outside bidder. Spirit's board wanted to convince their shareholders to reject Jetblue's bid, so they commissioned some aviation economists to do a study on the matter, which Spirit then circulated to its investors.

That report is unequivocal: it estimates that a Jetblue/Spirit merger will be a disaster. Spirit's participation in a route lowers fares by 17%. When Spirit stops competing on a route, fares go up by *30%*. Spirit CEO Ted Christie called the proposed merger "unlawful" and "unethical":

https://simpleflying.com/spirit-ceo-shareholder-rejection-jetblue-cynical-disruptive-offer/

Spirit is a major competitor to Jetblue. As Stoller notes, they compete on hundreds of routes, and are adding more all the time. Jetblue clearly understands that removing Spirit as a competitor would let it raise fares. As one Jetblue manager - quoted by the DoJ - explained: "I don’t think we should be selling the [Spirit] fare if [Spirit] is not serving the market." Jetblue's internal memos on the merger include an executive stating that the merger will allow the airline to realize "efficiencies" by reducing service and increasing fares. This isn't the kind of "efficiency" we want.

Stoller notes that even with this damning evidence, there are still some spoilers. Florida governor Ron DeSantis has cut a deal to back the merger, even though Florida stands to suffer the most of any state from this merger due to the number of Spirit flights taking off from its airports. And, Stoller notes, the judge presiding over the case is an 82 year old Reagan appointee - a ideology-addled dotard named William Young.

But, Stoller notes, with Buttigieg and the DOT on the case, it's hard to see how this merger can go through - the DOT has very broad powers to block mergers that reduce routes and don't have to meet the same evidentiary standards as the DoJ would in court.

Stoller thinks Buttigieg has had a "moment of truth" - that outside pressure from activists and critics convinced the secretary that his future political fortunes would be better served, on balanced, by boldly using his powers (and pleasing the public), rather than sitting on his hands (and pleasing future industry donors):

https://mattstoller.substack.com/p/pete-buttigiegs-moment-of-truth

If that's so, it's welcome news. While I would prefer that our political leaders acted boldly in the public interest out of a sense of duty, I will happily settle for bold action motivated by fear of the voters' wrath.

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🧌 Hey look at this

* Freely readable works nominated for the 2023 Nebula Awards https://www.superpunch.net/2023/03/links-to-2023-nebula-awards-nominees.html

* Why Weren't Silicon Valley Bank Depositors Using CDARS? https://www.creditslips.org/creditslips/2023/03/why-werent-silicon-valley-bank-depositors-using-cdars-.html

* Users, advertisers – we are all trapped in the ‘enshittification’ of the internet https://www.theguardian.com/commentisfree/2023/mar/11/users-advertisers-we-are-all-trapped-in-the-enshittification-of-the-internet

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🧌 This day in history

#20yrsago Vonage reviewed https://www.mindjack.com/gear/vonage.html

#10yrsago Why Tim Berners-Lee is wrong about DRM in HTML5 https://www.theguardian.com/technology/blog/2013/mar/12/tim-berners-lee-drm-cory-doctorow

#10yrsago Random House reconsiders and improves the standard contracts in its new ebook imprints https://writerbeware.blog/2013/03/12/random-house-announces-new-terms-at-digital-imprints-hydra-alibi-loveswept-and-flirt/

#10yrsago LibDems leave over support for secret trials; I resign from the party https://memex.craphound.com/2013/03/12/libdems-leave-over-support-for-secret-trials-i-resign-from-the-party/

#10yrsago Proposed Maryland anti-zero-tolerance law would tell schools to stop suspending kids who point their fingers at each other and say “bang” https://www.freerangekids.com/right-to-bear-gun-shaped-pop-tarts-law-drafted/

#10yrsago Porno-copyright trolls Prenda Law get hauled in front of a very angry judge https://www.techdirt.com/2013/03/11/deep-dive-analysis-brett-gibbs-gets-his-day-court-prenda-law-is-star/

#10yrsago Using clips from Ed Sullivan in Jersey Boys found to be fair use; judges award costs to deter future “chilling” copyright lawsuits https://web.archive.org/web/20130314111306/https://playbill.com/news/article/175814-Court-Says-Jersey-Boys-Producers-Were-Free-to-Use-Copyrighted-Ed-Sullivan-Clip-in-Show

#10yrsago Hacking the Xbox, free in honor of Aaron Swartz https://nostarch.com/xboxfree

#10yrsago Scowler: nightmare-fuel horror novel about a monstrous father https://memex.craphound.com/2013/03/12/scowler-nightmare-fuel-horror-novel-about-a-monstrous-father/

#5yrsago America, before the EPA: the photos that the EPA commissioned to document the conditions that led to its formation https://www.popsci.com/america-before-epa-photos/

#1yrago A systemic (not individual) approach to content moderation https://pluralistic.net/2022/03/12/move-slow-and-fix-things/#second-wave

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🧌 Colophon

Today's top sources:

Currently writing:

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Friday's progress: 528 words (114876 words total)

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW

* A Little Brother short story about DIY insulin PLANNING

* Vigilant, Little Brother short story about remote invigilation. ON SUBMISSION

* Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION

* Spill, a Little Brother short story about pipeline protests. ON SUBMISSION

Latest podcast: Twiddler https://craphound.com/news/2023/02/27/twiddler/

Upcoming appearances:

* Ostrom Workshop: Beyond the Web Speaker Series, Mar 20
https://events.iu.edu/ostromworkshop/event/806592-ostrom-workshop-beyond-the-web-speaker-series-cory

*  IFTF Changing the Register, Mar 22
https://iftf.zoom.us/webinar/register/5916783211142/WN_0YsPkGH8Tk6RZ9eec_VVpg

* Antitrust and Competition Conference - Beyond the Consumer Welfare Standard (Chicago), Apr 20-21
https://www.chicagobooth.edu/research/stigler/events/2023-antitrust

* Red Team Blues at Mysterious Galaxy (San Diego), Apr 25
https://www.mystgalaxy.com/event/42523Doctorow

* Red Team Blues event with Tim Harford (Oxford), May 29
https://www.eventbrite.co.uk/e/cory-doctorow-red-team-blues-with-tim-harford-tickets-574673793787

Recent appearances:

* Roskom Svoboda Privacy Day
https://www.youtube.com/watch?v=4VBXU4HVFs0

* Factually With Adam Conover:
https://www.stitcher.com/show/factually-with-adam-conover/episode/choke-point-capitalism-with-cory-doctorow-300308750

* Making Big Tech Better vs Making it Smaller (Brussels Antitrust Conference):
https://www.youtube.com/watch?v=IjE-RpOR5FU&t=2744s

Latest books:

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

Upcoming books:

* Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023

* The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023

* The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023

This work licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

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