The European Commission has decided to conduct an in-depth investigation into the proposed purchase by Booking Holdings of Flugo Group Holdings AB, which operates under the Sweden-based eTraveli Group.
Through a recent statement, the Commission highlighted concerns about the proposed acquisition, which would allow Booking to boost its position in the market for accommodation online travel agencies (OTA), SchengenVisaInfo.com reports.
“The transaction may significantly reduce competition in this market by combining eTraveli’s activities in flight OTA services with Booking’s own suite of services. The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed,” the statement reads.
Regarding the transaction, the EU Commission claims that it may increase barriers to entry and expansion for rival OTAs. At the same time, it may also limit competitors’ ability to acquire new customers.
In this regard, Executive Vice-President Margrethe Vestager, in charge of the competition policy, added that Booking is considered the most substantial online travel agency in Europe, adding that with the acquisition of eTraveli. a significant player in the flight brokerage sector, the Bookign Holding is expanding its reach into other travel activities.
The Booking Holding and eTraveli are active in providing OTA services, thus focusing on OTA accommodation and flight services. In addition, Booking is also involved in the metasearch services (MSS) market, primarily through its price comparison platform, KAYAK.
According to the Commission, on October 10 of this year, the proposed transaction was notified to the authority. However, Booking decided not to present obligations during the initial investigation to meet the Commission’s initial concerns. As a result, the EU Commission now has 90 working days, which means until March 31, next year, to make a decision about this issue.
Furthermore, the Commission’s task is to evaluate mergers and purchases involving companies with a turnover above certain limits and stop concentrations that would significantly prevent effective competition in the European Economic Area (EEA), or any significant part of it.
As the authority explains, most informed mergers do not present any competition difficulties and are also cleared after a routine review. However, this means that from the moment of notification of a transaction, the Commission has a total of 25 working days to decide if to grant approval or initiate an in-depth investigation.
Read the full article here