The booking portal Booking.com is not allowed to take over the competitor eTraveli as planned. The EU competition authorities fear that the dominant market position in online hotel bookings will be further strengthened.
The EU Commission has put a stop to the billion-dollar eTraveli takeover by Booking. The deal would strengthen the booking portal’s dominant position in the online travel agency market, which could potentially lead to higher prices for consumers, said EU Commissioner for Competition Didier Reynders in Brussels today. “Booking has not offered sufficient remedies to address these concerns,” it said in a statement.
It is the first time that the Commission has banned a takeover this year, said Reynders. Among other things, the EU Commission is responsible for checking whether mergers above a certain threshold could distort competition in the European Economic Area (EEA), which includes not only the EU states but also Norway, Liechtenstein and Iceland. Great Britain approved the takeover without conditions last year.
Additional flight brokerage could distort competition
Booking Holdings includes the hotel reservation platforms Booking.com and its Asian counterpart agoda.com. According to EU data, Booking.com is the dominant portal in the EEA. “The company has grown steadily over the last ten years and has achieved a market share of over 60 percent,” said the commission. The Swedish company eTraveli, on the other hand, operates brands such as GotoGate and My Trip, through which flights can be booked.
According to the commission, the focus of Booking’s business model is the online brokerage of hotels. However, an additional flight reservation service could lead to the platform being used significantly more, which would also increase the chance of subsequently finding hotels. “Booking could have benefited from customer inertia,” it said.
Booking can take legal action against the Commission’s decision to ban the planned deal worth 1.63 billion euros. When asked whether she would withstand a legal investigation, Reynders emphasized that a well-considered decision had been made. “If we are not confident, we will not make a decision,” said Reynders.