https://www.dansdeals.com/more/news/airline-news/turkish-airlines-is-blocking-star-alliance-awards-to-and-from-israel-should-they-be-kicked-out-of-star-alliance/
What about this is illegal? Why would someone file an informal claim with the DOT?
Some possibilities:
Export Administration Act (EAA) and the Tax Reform Act of 1976. Companies doing business in the US can't boycott countries without us allowing it.
Contractual agreements within Star Alliance. At the very least, a civil suit could be filed by Star Alliance. Could potentially be taken on by the DOT.
U.S. consumer protection laws. People in the US have Turkish miles and have an expectation to be able to use them on partner airlines, which violates that.
The Convention on International Civil Aviation. Airlines can't discriminate by international law, this could be discriminatory.