EC Prohibits Acquisition of eTraveli by Booking

The European Commission has prohibited the acquisition of Flugo Group Holdings (eTraveli) by Booking Holdings. The EC said it would have allowed Booking to strengthen its dominant position on the market for hotel online travel agencies (OTA) in the European Economic Area. Booking did not offer remedies that were sufficient to address these concerns.

The decision follows an in-depth investigation of the transaction, which would have combined Booking and eTraveli, two leading providers of OTA services in a concentrated industry. Booking is the leading hotel OTA while eTraveli is one of the main providers of flight OTA services in Europe. Booking is also active in the market for metasearch services mainly through its price comparison platform KAYAK.

During the investigation, the EC received feedback from a large number of stakeholders, including hotels and competing OTAs. Market participants were concerned that the transaction would strengthen Booking's dominant position on the market for hotel OTAs in the EEA, reduce competition, and increase prices for hotels and, possibly, for consumers.

The EC found that the transaction would have strengthened Booking's dominant position in the hotel OTA market, leading to higher costs for hotels and, possibly, for consumers. More specifically, the Commission found that Booking is the dominant hotel OTA in the EEA, the transaction would have allowed it to acquire a main customer acquisition channel, and expand the travel services ecosystem. By increasing traffic to and sales by Booking's platforms, the transaction would have reinforced network effects and increased barriers to entry and expansion, making it harder for competing OTAs to develop a customer base capable of supporting a hotel OTA business. The strengthening of Booking's dominant position would have further increased its bargaining position towards hotels and diverted demand from cheaper sales channels to Booking.