DOJ CONSIDERING LAWSUIT TO PREVENT KOREAN AIRLINES’ MERGER WITH ASIANA
June 2, 2023
On May 18, 2023, DOJ announced that it is considering a lawsuit to restrict the merger of Korean Air and Asiana Airlines (“Asiana”), citing anti-competition concerns. Specifically, DOJ noted concerns that Korean Air’s planned acquisition of Asiana might harm competition related to passenger and cargo operations between the U.S. and Korea, and negatively affect the U.S. and U.S. airlines by giving too much control over cargo and the transport of key goods to one consolidated company. DOJ has been investigating the potential merger for nearly two years and has previously noted its concerns regarding overlapping routes to the U.S. cities of San Francisco, Los Angeles, Seattle, New York, and Honolulu. The European Commission has also been investigating the merger, and in a press release published on May 17th, noted that it had informed Korean Air of its objections to the acquisition based on the potential harm to competition concerning passenger routes to Barcelona, Frankfurt, Paris, and Rome.
While the U.S. does not have authority to restrict or otherwise influence the airlines’ conduct in South Korea, it can seek to stop the merger from happening on the basis of harm to competition in the U.S. Korean Air and Asiana have argued that their merger may be protected by the Act of State Doctrine, which effectively bars U.S. courts from ruling on the validity of official acts of foreign governments conducted in their home countries. Further, the U.S. Government is said to still be considering the lawsuit given all these issues and potential sensitive diplomatic issues that may be impacted.
We will continue to provide updates on this as we receive them.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665.
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