Antitrust Alert: U.S. DOJ and New York Attorney General Challenge NYC Tour Bus Joint Venture

The U.S. Department of Justice and the New York State Attorney General have filed an antitrust lawsuit to dissolve a joint venture between two New York City tour bus companies that effectively merged their operations and eliminated competition between them.  This enforcement action demonstrates how collaboration between competitors, short of a full merger, can attract antitrust scrutiny.  It also highlights how the most effective evidence, for good or bad, often is a company's own documents.

Coach USA Inc. and City Sights LLC both provide "hop-on, hop-off" bus tours in New York City.  According to the complaint, they once competed fiercely for the business of NYC tourists.  In early 2009, the two competitors formed a joint venture, Twin America, into which each contributed all of its New York City hop-on, hop-off bus tour operations and assets.  The lawsuit claims that this combination created a monopoly in the "New York City hop-on, hop-off bus tour market" and enabled Coach and City Sights to increase prices to consumers by 10 percent.  In fact, upon forming the joint venture, both companies immediately implemented price increases, raising base fares by $5.

The complaint relies on statements from the companies' own documents about their intentions for the joint venture and their views of the market.  According to the complaint, one Coach board presentation described a key benefit of the joint venture to be " improved profitability," because it assumed a "10% fare increase."  The presentation explained that, without the transaction, there would be no fare increase "due to competition."  In documents pre-dating the joint venture, Coach and City Sights each identified the other as its "sole" or "main" competitor.  To support the complaint's allegation that "hop-on, hop-off" is in a separate market from other bus service, DOJ cites a threatened lawsuit between City Sights and Coach, in which City Sights itself alleged Coach had monopolized the market for "Double Decker, Hop-on, Hop-off Bus Tours" and identified Coach and City Sights as the only current competitors in that market.

The complaint also alleges that the companies delayed an antitrust investigation by the New York Attorney General by appealing to the federal Surface Transportation Board to approve the transaction, which would have exempted the transaction from the antitrust laws.  After more than two years of review, the STB rejected the parties' request.

The case provides a useful reminder that joint ventures are subject to antitrust review and may be challenged where they substantially lessen competition between the parties.  Even transactions that are not subject to the premerger reporting requirements of the Hart-Scott-Rodino Act may be investigated and ultimately challenged by federal and state antitrust enforcers.  Parties to a transaction should not assume that a non-reportable or even completed transaction is untouchable.  Finally, loss of competition between horizontal competitors is a central antitrust concern and most likely to attract antitrust enforcement – especially where company documents suggest their conduct will result in increased prices, reduced capacity, loss of innovation, or other anticompetitive effects.

Lawyer Contacts


For more information, please contact your principal Jones Day representative or either of the lawyers listed below.

Fiona A. Schaeffer
New York

J. Bruce McDonald
Washington / Houston
+1.202.879.5570 / +1.832.239.3822

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