European Commission prohibits Booking from buying Etraveli travel agency

The European Comission banned this Monday Booking buy the travel agency online Etraveli, a Swedish company that operates under brands such as Gotogate, My Trip, Seat24 or SuperSaver, understanding that the acquisition would have resulted in greater control of the market and possibly higher prices.

The community Executive, which opened an in-depth investigation into the transaction in November 2022, concluded that the operation “would have allowed Booking to strengthen its dominant position in the online hotel agency market within the European Economic Area (EEA).”

Brussels explains that Booking’s market share in this sector “has grown steadily over the last ten years” and is already above 60%, as well as that it only has one comparable competitor that is also “Much smaller” and focuses its activity on the US market.

Along these lines, the Commission’s Competition Services consider that online search agencies for hotels rivaling Booking “they are not able to exert sufficient price pressure on Booking, which is therefore free to charge higher commissions to hotels” who use the platform.

On the other hand, Brussels emphasizes that Booking would have become the main online flight agency with the purchase of Etraveli, which is one of the leaders in this segment that acts as a “customer acquisition channel”; since online flight search services “They generate a significant amount of traffic and are often the first step when planning a trip.”

In this way, Booking could have “expand your travel services ecosystem” which revolves around its hotel offering thanks to greater traffic and sales through its platforms, generating higher barriers to entry and expansion for its competitors.

All this would have resulted, according to the analysis of the Community Executive, in a better negotiating position for Booking with the hotels, which would have resulted in greater spending for accommodation and “possibly” for the consumers.

Booking offered a series of commitments to the community authorities to resolve their doubts, but Brussels also considered that they were not “sufficiently broad and effective”so “they did not completely eliminate competition problems” that he had identified.

The company, in particular, had offered the possibility of displaying on the page shown to consumers after purchasing flights the hotel offers available in other online travel agencies competing with Booking.

However, the selection and arrangement of these rival offerings “they were not sufficiently transparent and non-discriminatory”since several aspects of its implementation were going to be carried out by Kayak, a company that is a subsidiary of Booking.

This is the first decision made by the new Competition Commissioner, Didier Reynders, who replaces Margrethe Vestager at least until the presidency of the European Investment Bank (EIB) is resolved, for which the Danish is the main rival of the Spanish Nadia Calviño.

The Belgian presented the case in a press conference in which he pointed out that the vetoes on concentrations are “rare” and highlighted that it is the first time this year that the Community Executive blocks a merger.

Source: EFE