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US Competition Authority Urged To Block Expedia & Orbitz Merger

TRAVOLUTION
http://www.travolution.co.uk/articles/2015/08/11/13387/us-competition-authority-urged-to-block-expedia-and-orbitz-merger.html

The US Department of Justice to is being urged to block the proposed $1.3 billion merger of online travel agency giants Expedia and Orbitz "to maintain vital competition that ensures fair prices for consumers".

The call comes from US-based consumer champion, Consumer Watchdog.

Expedia announced the Orbitz merger in February just after it closed the deal to buy Travelocity.

Consumer Watchdog's privacy project director John Simpson told the Justice Department: "The proposed deal would give the combined company monopolistic control of the online booking market, enabling it to impose higher fees on hotels, which would inevitably mean higher costs for consumers.

"Market analysts have estimated that the merger with Orbitz would give Expedia and its affiliates 75% of the online travel agent market in the US.

"The merger would effectively leave a powerful duopoly with Expedia and competitor The Priceline Group controlling 95% of the online travel agency bookings."

Consumer Watchdog said part of the problem is that consumers do not understand the extent that seemingly independent brands are owned by the industry “behemoths”.

Orbitz Worldwide owns HotelClub.com, Orbitz.com and CheapTickets.com. Expedia owns Expedia.com, Hotels.com, Check Tickets, Trivago and Hotwire.com. Priceline owns sites such as Booking.com and Kayak.

"If this merger is allowed to go forward, then the vital competition between Expedia and Orbitz will be lost,” Simpson wrote. "Eliminating Orbitz as an independent option will severely impact consumers and limit consumer choice."