(Finance) – The European Commission has prohibitedpursuant to the EU Merger Regulation, the eTraveli acquisition project by Booking Holdings. The acquisition, according to the EU antitrust, would have allowed Booking to strengthen its dominant position on the market for online travel agencies (OTAs) in the European Economic Area (EEA). Booking did not offer sufficient remedies to address the Commission’s concerns, it said in a statement.
Today’s decision follows a thorough investigation conducted by the Commission into the transaction. The Commission considered that the transaction would strengthen Booking’s dominant position in the hotel OTA market, resulting in higher costs for hotels and, possibly, consumers.
The Commission also conducted an in-depth analysis of the commitments proposed by Booking, including testing their effectiveness with interested market participants. The feedback received indicates that the proposed corrective measures were not sufficiently complete and effective and did not completely eliminate the identified competition concerns.
“Europe is a world-leading tourist destination attracting millions of travelers every year. The travel industry plays a vital role in the local economy of many regions, cities and rural areas. The acquisition of eTraveli by of Booking would strengthen Booking’s dominant position in the online travel agency market and would likely result in higher costs for hotels and, perhaps, consumers,” commented the commissioner Didier ReyndersEU Competition Officer.
“Our decision to block the merger means that European hotels and travelers will not be further limited in the options available to offer their services and book their travel,” he added. “This also means that the drive towards competitive pricing and innovation will be preserved in this important part of the travel industry.”
Booking Holdings, listed on Nasdaq, immediately announced that intends to appeal to the European courts against the decision of the EU Commission. The company “firmly believes that the Commission is wrong on both the facts of the case and the law applicable to this transaction, which has been unconditionally approved by numerous competition authorities, including the UK Competition & Markets Authority and the US FTC “.
“The European Commission’s decision not only departs from established law and precedent, but deprives consumers of the travel options they are entitled to – stated the CEO Glenn Fogel – We are proud of the progress we are making in providing a high-quality flight product through our existing commercial partnership with Etraveli. Today we are pleased to announce an extension of that partnership through 2028, and as we move forward together, our focus will continue to be on driving the creation of a better, more flexible consumer travel experience that delivers more value to customers and partners”.