US antitrust officials will not block the merger of online travel
booking giant Expedia and Orbitz, saying Wednesday it won't hurt
competition in the sector.
Expedia announced plans in February to
buy Orbitz for about $1.6 billion (roughly Rs. 10,578 crores). Last month, a consumer group and
hotel industry association objected to the merger, saying the deal would
lead to a powerful duopoly with 75 percent of the online travel agent
market.
The US Justice Department disagreed "Orbitz is only a
small source of bookings" for most operators, said Assistant Attorney
General Bill Baer, who heads the department's antitrust division.
He
added that "travel service providers have alternative ways to attract
customers and obtain bookings, including Expedia's largest online travel
agent rival, Priceline."
According to the research firm
Morningstar, Expedia and Priceline each have around 30 percent of the
global online travel booking market, followed by Orbitz's eight percent
share, with several smaller players also in the sector.
"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 US consumers," Baer said in a statement.
"The
online travel business is rapidly evolving. In the past 18 months, for
example, the industry has seen the introduction of TripAdvisor's Instant
Booking service and Google's Hotel and Flight Finder with related
booking functionality."
Baer said his agency took the objections
to the merger "seriously and factored into our analysis all of the
information provided by third parties" but that "we concluded that the
acquisition is unlikely to harm competition and consumers."