Hitting the Customer Where It Hurts - in the Purse

The Antitrust Authority's job is to ensure competition and even increase it. The way to do so is often to increase the number of choices available to the consumer, thereby lowering the price.

If the Antitrust Authority's suspicions are founded, then the Israel Tourist and Travel Agents Association was trying to hit the consumer where it hurts: the price.

This case is a matter of airplane tickets. The ITTAA is suspected of trying to increase ticket prices by coordinating prices between the foreign airlines operating in Israel, and just before the busiest season, the summer vacation period.

For years, travel agents held would-be overseas travelers hostage. They had a near monopoly on airline ticket sales. Freedom of choice was limited to choosing between travel agents.

Then the Internet age changed everything. It allowed consumers to buy tickets and bypass the agents, making them superfluous. Purchasing tickets over the Internet often was much cheaper, and therefore it threatened travel agents livelihood.

The Antitrust Authority learned that some of the airlines that sell tickets online charge an extra fee, while some do not. The testimony collected by the authority indicates the ITTAA tried to set a fixed minimum fee for every ticket sold online by the airlines.

This would have raised ticket prices, diminishing the advantages of buying tickets online and sending customers back to the travel agents.

This would be a clear violation of antitrust law. Punishment for forming such a cartel is three years in prison.