NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman and the U.S. Department of Justice announced an antitrust lawsuit on Tuesday against two tour bus operators that allegedly formed an anticompetitive joint venture.
In 2009, Gray Line New York, a service operated by Coach USA, Inc., and City Sights, a service operated by CitySights LLC, joined together as Twin America to combine the two leading providers of hop-on, hop-off sightseeing bus tours in New York. The combination allegedly eliminated competition in a more than $100 million per year market and led to a 10 percent price increase for consumers.
"Forming a monopoly that overcharges consumers is illegal and will not be tolerated," Schneiderman said. "This lawsuit against Twin America is an important step toward restoring competition and protecting New York tour bus customers. The iconic double-decker Gray Line and City Sights buses are seen all over New York City but few people know they are a monopoly that has led to higher prices and less competition. Visitors to New York deserve better."
The joint lawsuit is brought under the Clayton Act, a federal antitrust law that gives Schneiderman the authority to sue to block anticompetitive joint ventures and mergers. The suit requests that the court restore competition by requiring Twin America to divest certain assets or completely dissolve the joint venture.
After the companies combined in 2009, Twin America delayed an inquiry into antitrust allegations by applying to the federal Surface Transportation Board for transaction approval. If granted, the joint venture would have been granted antitrust immunity. The STB ultimately rejected the application and Schneiderman's office resumed its inquiry, joined by the Department of Justice.
Coach and City Sights allegedly implemented a price increase discussed during their 2009 negotiations, raising the base fares on hop-on, hop-off tours by $5.00. Since forming Twin America, no other company entered the market to reintroduce meaningful competition.
Approximately 50 million tourists visit New York City annually. An estimated two million of the visitors spend more than $100 million on hop-on, hop-off bus tours.