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Travel agency group settles antitrust case

The state accused eight agencies and their association of price fixing and anti-competitive practices.

By SAUNDRA AMRHEIN

© St. Petersburg Times, published April 27, 2000


A Hernando County travel association has settled claims brought against it and its eight members by the state Attorney General's Office, which accused them of price fixing and anti-competitive practices.

The Hernando County Association of Travel Professionals became the last of the group to settle by entering a consent decree in Hernando County's Circuit Court on April 12.

The association and the eight agencies denied the allegations brought in the lawsuit in June but entered consent decrees in order to avoid further legal costs, according to court documents. The lawsuit last year followed a two-year investigation by the state's antitrust division and accused the association and its members of conspiring in 1997 to fix transaction fees charged on airline tickets and car rentals.

It also said that the association agreed to regulate and limit its members' advertising by pooling resources for group advertising and cutting individual agencies' display ads in the BellSouth Yellow Pages, thus reducing available information for consumers.

Though denying any such past behavior, the association, like the agencies, agreed not to conspire to fix transaction fees in the future or interfere with advertising by other travel agency services in violation of antitrust laws.

The eight agencies all paid a $2,000 civil penalty, said Kimberly King, assistant attorney general with the antitrust section. The association did not have to pay a penalty.

King said he was happy with the settlement and satisfied that it had accomplished the office's goals.

"The purpose of the antitrust law is to protect competition for the benefit of consumers," he said. "When competing businesses agree to fix prices or to quit competing against each other in the area of advertising, customers and our system of free enterprise get hurt."

The eight travel businesses named in the lawsuit and consent decrees were Around the Earth Travel Inc., Diana's Travel South Inc., ACBS Travel Agency, ABBA Travel, Premier Travel Associates Inc., Seven Hills Travel Service Inc., Voyager Travel Inc. and West of the Moon Inc.

Thomas Barnette, owner of Voyager Travel Inc. and one of the first to enter into a consent decree in July, said he was "delighted" that the case has found closure. But he denied ever agreeing to charge transaction fees.

"At no point in time was any business I was associated with collecting service fees or subject to an agreement to collect service fees," Barnette said. Voyager, which is no longer operating, did have an agreement for joint advertising in the Yellow Pages, he said, an agreement he finds acceptable.

"I still believe that it's appropriate and proper for an association duly registered and legal to do joint advertising in the Yellow Pages or by whatever means they wish if it means they are going to save their businesses money and carry on the savings to the consumer," said Barnette, founder, president and owner of Euro-American Programs Inc., a national student tour group established in 1977.

King with the Attorney General's Office agreed that businesses in an association can run joint advertising. But they are not allowed to agree to drop their individual ads, which the lawsuit says the agencies did.

As for the transaction fees Barnette said his business never agreed to collect, King responded that each of the agencies was accused of participating in the agreement.

Shawn Leahy, owner of Premier Travel, which also entered into a consent decree in July, said in writing that her business was not part of the association during the time the state accused the group of colluding. She added, "Of course, all charges were dropped." King said the accusations were not dropped, which is verified by Leahy's signature on a document stipulating terms of the consent decree and a copy of the consent decree.

The other six agencies are still members of the association, which continued operating during the investigation, said Greg Myers, secretary and treasurer of the association. He would not comment further about the case.

Mitchell Blumenthal, a California attorney who represented the six remaining agencies after Premier and Voyager settled, said he and the Attorney General's Office "respectfully disagree" about the case.

"There was no admission of liability whatsoever, and it was amicably resolved, period."

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