In 1982, Robert Crandall, a senior executive at American Airlines, told the chief executive officer of Braniff Airlines, Howard Putnam, “I have a suggestion for you. Raise your goddamn fares 20 percent. I’ll raise mine the next morning.”

He added: “You’ll make more money, and I will, too.” Putnam, who was recording the conversation, didn’t go along. As egregious as the behavior was, the resulting Department of Justice antitrust suit against American was settled with an agreement by Crandall not to do it again. He was also ordered to record all contacts with other airline executives for two years. Braniff went bust; Crandall became American’s CEO.

The question of what you can say and what you can’t has come up again this summer. On July 1 the Justice Department confirmed it’s investigating possible “unlawful coordination” by airlines. The four biggest carriers, American Airlines, Delta Air Lines, Southwest Airlines, and United Continental Holdings, said they were cooperating with the probe. Justice investigators are seeking details of conversations, meetings, and e-mails to determine whether airlines are discussing how to control the supply of seats, a critical factor in determining fares.

“In my experience looking at markets with just a few players, sometimes there is a temptation to coordinate behavior,” says Bill Baer, assistant attorney general for antitrust. He declined to comment on the airline investigation. Airlines for America, which represents the carriers, says it’s confident they’ll be cleared: “Our members compete vigorously every day, and the traveling public has been the beneficiary.”

Collusion cases depend on proving agreement between parties. According to antitrust experts, discussing planned pricing and capacity changes is more legally problematic than sharing historical data. A mention of a specific route is more dangerous than a general observation. Private conversations are more likely to get you into trouble than public statements. Anything that can be construed as a veiled offer to restrain trade, followed by a veiled acceptance of that offer, is almost certain to land you in hot water.

“Communication is extremely important. You can’t just watch the other guy,” says William Kovacic, a former chairman of the Federal Trade Commission, which enforces competition law along with the Justice Department. What violates the law, says Kovacic, now a George Washington University Law School professor, is “communication that indicates intentions and elicits a response.”

The antitrust bar is buzzing with questions about what prompted the feds to look at the airlines. One trigger may have been the June meeting of the International Air Transport Association in Miami, at which airline executives talked openly about “capacity discipline,” not-so-subtle code for limiting the number of seats available. At a press conference, Delta President Ed Bastian said his company is “continuing with the discipline that the marketplace is expecting.” American Airlines CEO Doug Parkertold Reuters it was important to avoid overcapacity: “I think everybody in the industry understands that.”

Another red flag arose during the 2013 merger of American and US Airways, which Justice sued to block. According to documents filed in the antitrust suit, Parker, then chief of US Airways, forwarded e-mails complaining about aggressive competition to the CEO of a rival airline. That CEO, who wasn’t identified, responded that it was an “inappropriate communication,” according to the complaint. On July 15, American said it should be judged on “the benefits we have delivered to customers.”

The Justice Department settled after both carriers agreed to sell some airport assets to rivals, decreasing the market power of the enlarged American Airlines. “This settlement will disrupt the cozy relationships among the incumbent legacy carriers,” Justice’s Baer said in a statement at the time. But it did nothing to reduce the potential for collusion, which is easier when there are fewer players in an industry.

Justice may also look into communications with investors. Academic research suggests big firms that own stock in multiple airlines discourage competition to keep industry profits high. “We find that product prices are 3 percent to 11 percent higher because of common ownership,” Martin Schmalz of the University of Michigan’s Ross School of Business and José Azar and Isabel Tecu of consulting firm Charles River Associates argue in a working paper. One of the asset managers it names is BlackRock, a large shareholder in the four major airlines. “We expect fair and ethical competition between the companies we invest in on behalf of our clients,” BlackRock says.

Capacity discipline, which accompanied the merger frenzy following the 2008 financial crisis, is giving the industry a rare chance to make a buck, analysts say. “Despite being as consolidated as it is, it’s still intensively competitive,” says Andrew Davis, an analyst at T. Rowe Price Group, whose funds own airline shares. “This is an industry that from a profitability standpoint, if it doesn’t rank dead last in the United States, it’s got to be near the bottom,” says Edmund Greenslet, a former Wall Street airline analyst who publishes the newsletter Airline Monitor.

Lately fares have fallen, in part because of the drop in oil prices. But the major airlines haven’t passed along all the savings from cheaper fuel, and profits have soared. In any case, the Justice Department doesn’t need to demonstrate fantastic profitability to prove collusion. It needs to show only that key people are opening their mouths and saying the wrong things to each other.

This article was written by Peter Coy and David McLaughlin from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: The collusion conversation that almost brought American Airlines down in 1982, as captured in Dan Reed's book "An American Eagle." Skift