<div id="readability-page-1">Spirit Airlines has permanently closed its doors, and that spells trouble for the air travel industry. The loss of one of the country’s premiere budget carriers will mean less competition among airlines — and likely higher airfares. But there is one silver lining that could come out of Spirit’s unfortunate demise: It’s the perfect opportunity for antitrust regulators at both the federal and state levels to close the book on the Neo-Brandeisian movement — commonly referred to as “New Antitrust” — that has grown in popularity over the last five years. This movement seeks to shift antitrust policy away from its longstanding focus on protecting consumers from anti-competitive practices. In its place, proponents advocate a framework centered on policing market structure itself, embracing a “big is bad” philosophy that targets large companies for their size and influence — even when those companies are lowering prices and benefiting consumers. The downfall of Spirit Airlines demonstrates what many legal and economic experts have warned for years: stopping mergers or punishing scale simply for its own sake does not help consumers. In this case, it did precisely the opposite. Conservatives have rightly blamed the Biden administration for letting Spirit Airlines fail. Under the oversight of Attorney General Merrick Garland, and with the blessing of Department of Transportation head Pete Buttigieg, the Department of Justice, joined by the District of Columbia, the Commonwealth of Massachusetts and the State of New York, sued to stop a pending merger in 2023 between Spirit Airlines and JetBlue. Not only would the merger have saved Spirit and its 17,000 employees, it would have created a new, globally scaled competitor to more expensive carriers like Delta and United. Spirit already had a proven record of lowering prices across the airline sector thanks to its budget fares. A merger with the much larger JetBlue would have only proliferated this effect. But the Biden administration was unconvinced. “JetBlue’s acquisition of Spirit would eliminate the ‘Spirit Effect,’ where Spirit’s presence in a market forces other air carriers, including JetBlue, to lower their fares,” their lawsuit alleged. Not only was this wrong, but the alternative was actually to eliminate Spirit itself, not just the “Spirit Effect.” The airline wouldn’t survive without a larger company willing to inject some cash. Unfortunately, the Justice Department and its allied state coalition managed to convince a federal judge to rule in their favor, killing the merger. A year and a half later, Spirit finally ran out of runway and filed for bankruptcy. Poor antitrust policy bore responsibility for the collapse of this business. Where antitrust policy was guided for 40 years by the consumer welfare standard — under which the government only intervened if a merger or contract would directly harm the consumer — the regulators in charge decided to take a more ideological approach. They replaced the consumer welfare standard with a general aversion to corporate consolidation, even in cases where consolidation was the best result, as with Spirit. Today, Spirit may be gone, but the Trump administration can still learn the lesson of its ordeal. For the ghost of Neo-Brandeisianism continues to haunt federal policy. In 2024, President Trump replaced Federal Trade Commission Chair Lina Khan, the nation’s principal advocate for Neo-Brandesianism, with Andrew Ferguson, who promised to stop “picking winners and losers” and assured businesses that the commission will stay out of the way of mergers that won’t hurt Americans economically. As if to reassure businesses, Ferguson quickly ended a Federal Trade Commission lawsuit against Pepsi over its offer of bulk pricing deals to businesses that could afford to purchase in bulk. Neo-Brandeisians opposed the practice because only larger companies can typically purchase at that scale. But in reality, those discounts help lower costs throughout the supply chain and ultimately reduce prices at the checkout counter. It seemed the Federal Trade Commission was ready to move on from the Neo-Brandeisian legacy. Yet even today, there are still a number of such cases that remain open. Although the commission ended the Pepsi lawsuit, it has so far left open similar actions. One is against Southern Glazer’s, the country’s largest liquor distributor. The lawsuit, against which Ferguson dissented when it was first brought forward, likewise accuses Southern Glazer’s of price discrimination for lowering its prices at big-box stores, even though these discounts push down consumer prices at a time of high inflation. Many states are also still fighting the merger of telecommunications companies HPE and Juniper. Antitrust experts have repeatedly pointed out that the deal would not even trigger the minimum market share structural presumption historically needed to open an antitrust merger investigation. The U.S. intelligence community has also stated that the merger is important for national security. The antitrust enforcers who have taken over for Neo-Brandeisian advocates admittedly have a tall task in front of them. It may be difficult to explain to skeptical journalists that dropping an antitrust lawsuit is not an unfair favor for Big Business but a benefit for American consumers. Maintaining the enforcement status quo avoids this problem. Spirit Airlines’s collapse has exposed the Biden antitrust policy to national scrutiny. Even a longtime political operative who served as a senior official in the last White House says it is time to “honestly assess whether … stopping the JetBlue merger with Spirit Airlines was the right call.” The best way to put that assessment into practice is to end the remaining Neo-Brandeisian suits that remain on the books. It is time to restore a predictable and stable standard to antitrust enforcement. Alden Abbott is a senior research fellow at the Mercatus Center at George Mason University. He previously served as general counsel of the Federal Trade Commission, acting as the agency’s chief legal officer.</div>

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Spirit Airlines has permanently closed, reducing competition in the air travel industry and likely leading to higher fares. This collapse highlights the failures of the 'New Antitrust' movement, which opposes mergers even when they could benefit consumers. The Biden administration's decision to block the merger with JetBlue, intended to save Spirit, ultimately contributed to its bankruptcy. The situation underscores the need for a return to consumer welfare-focused antitrust policies.

Spirit Airlines collapse shows the ‘New Antitrust’ movement is a flop