The European Commissioner for Competition and Justice, Didier Reynders, announced, on Monday 25 September, that the European Commission had decided not to authorise the proposed acquisition of Flugo Group Holdings AB (eTraveli) by Booking Holdings (Booking). Both companies are active in the market for online travel agency services.
The Commission confirmed the concerns expressed in its preliminary opinion in June (see EUROPE 13064/24, 13199/28). It considered that the proposed acquisition would have broadened Booking’s ecosystem and strengthened its dominant position on the market for online travel agencies (OTAs) in the hotel sector in the European Economic Area (EEA). Booking is already the dominant operator in this market, with a market share of over 60% in the EEA.
In addition, the Commission found that the proposed transaction would have raised barriers to entry and expansion for Booking's existing and potential competitors, that it would have strengthened Booking 's bargaining position vis-à-vis hoteliers and that, by restricting competition in the relevant market, it could have led to higher prices for consumers.
The Commission stresses that this is not a simple case of horizontal concentration. The market in question has characteristics that are common to other digital markets: on the one hand, it is characterised by strong network effects that benefit the large OTAs and, on the other, by strong inertia in the behaviour of consumers, who tend to remain loyal to the platform initially chosen.
Didier Reynders points out that before taking this decision, the Commission services had engaged in a dialogue with Booking and received several proposals for corrective measures from the company, which the Commission analysed in depth and tested.
In particular, Booking had proposed that a screen of competing flight and hotel offers be presented to consumers purchasing air travel, on the page displayed to travellers after they had purchased their air tickets (a page known as the ‘flight checkout page’), which would have been populated by KAYAK, Booking’s metasearch service.
However, the Commission felt that the proposed remedies were “not sufficiently comprehensive and effective” and would have been difficult to implement and monitor effectively. The Commission considered, among other things, that the selection of offers presented on the choice screen and the order in which they were displayed were not sufficiently transparent.
Commissioner Reynders pointed out that concentration bans were still rare and that this ban was the first in 2023.
Link to case: https://aeur.eu/f/8q6 (Original version in French by Émilie Vanderhulst)