The European Commission on Monday canceled the planned takeover of the Swedish Etraveli Group by Booking Holdings, the parent company of Booking.com. According to Brussels, by taking over the online airline ticket provider, Booking – the global market leader in digital hotel bookings – would gain too dominant a market position, possibly resulting in higher consumer prices.
Didier Reynders, European Commissioner for Competition, made the blockade was announced on Monday morning. Almost immediately afterwards, Booking announced its decision challenge at the European Court. It is not yet clear when the matter will come to court.
Booking announced almost two years ago that it wanted to acquire Etraveli. For the takeover from the current owner, investment company CVC Capital Partners, it allocated 1.63 billion euros.
Commitments
The fact that the European Commission blocked the deal after a months-long investigation is mainly due to the dominant position that Booking already has. More than 60 percent of digitally booked hotel stays in Europe already go through Booking. The only real competitor – the American Expedia – is much smaller and mainly focused on the United States.
Etraveli, in turn, is one of the European market leaders in the online supply of airline tickets. Brussels fears that by bringing these two functions (hotel stays and airline tickets) under one roof, the remaining competitors in the travel world would be completely left behind. Booking could easily tempt consumers after booking a plane ticket to immediately book a hotel room via the platform.
According to the European Commission, this would further strengthen Booking’s powerful position in the ‘ecosystem’ of the online travel world. Hotels would be even less likely to ignore Booking when offering their rooms, because cheaper alternative booking platforms attract less traffic. That could drive up the costs for hotels, and thus the prices for hotel rooms.
Booking has made several commitments in recent months: for example, it promised to also show customers hotel rooms from other providers after booking a flight ticket. But according to the European Commission, these were not enough to remove the fear of a monopoly position.
Collaboration with Etraveli
Booking said in a press release on Monday that it is “strongly convinced” that the European Commission is wrong, “both in terms of the facts of the case and the law applicable to this transaction.” The company pointed out that the deal has already been approved by the US and British competition authorities.
According to Booking, the acquisition of Etraveli is to the benefit of consumers
“The Commission has fundamentally misinterpreted the highly competitive travel markets for flights and accommodations,” Booking said. According to the booking group, these are “separate, highly competitive industries” and the takeover of Etraveli is actually to the advantage of consumers, because they can expect “more options and competitive prices” via the booking platform after the takeover.
Booking announced that it will continue to expand its “already growing and successful flight offering on Booking.com.” The existing partnership with Etraveli has been immediately extended until the end of 2028, American CEO Glenn Fogel reported: “Our focus will continue to be on creating a better, more flexible travel experience for consumers.”
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