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Expedia’s $1.3B Orbitz Heist Goes Unchallenged
Washington, D.C. – In a shocking turn of events, the Justice Department has announced it will not challenge Expedia’s $1.3 billion acquisition of Orbitz, a move that has left many in the industry scratching their heads.
Assistant Attorney General Bill Baer of the Antitrust Division released a statement today on the division’s decision to close its investigation into the acquisition.
“We know online travel booking is important to U.S. consumers and to the airlines, car rental companies and hotels that serve those consumers,” Baer said. “Over the course of a six-month investigation, lawyers and economists from the Antitrust Division reviewed tens of thousands of business documents, analyzed transactional data from the merging companies and from other industry players and interviewed over 60 industry participants of various types and sizes.”>
According to Baer, the Antitrust Division investigated concerns that the acquisition would harm competition and consumers. However, after reviewing all the evidence, the division concluded that the acquisition is unlikely to harm competition and consumers.
The reasons for this conclusion, according to Baer, are threefold. First, the division found no evidence that the merger would result in new charges being imposed directly on consumers for using Expedia or Orbitz. Second, the division found that Orbitz is only a small source of bookings for most of these companies and has had no impact in recent years on the commissions Expedia charges. Third, the evidence suggests that the online travel business is rapidly evolving, with the introduction of TripAdvisor’s Instant Booking service and Google’s Hotel and Flight Finder with related booking functionality.
“Looking at the facts and applying our Horizontal Merger Guidelines, we concluded that Expedia’s acquisition of Orbitz is not likely to substantially lessen competition or harm U.S. consumers,” Baer said.
The decision has sparked outrage among consumer advocates, who argue that the acquisition will give Expedia too much control over the online travel industry. “This is a classic case of too much power in the hands of too few companies,” said one advocate. “We will continue to fight this acquisition and ensure that consumers are protected.”>
Expedia and Orbitz have not commented on the decision, but industry insiders say that the acquisition will likely go ahead as planned.
Stay tuned for further updates on this developing story.
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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