European Commission warned Booking Holdings of antitrust issues with eTraveli deal
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The European Commission informed Booking Holdings (NASDAQ:BKNG) on Monday of its preliminary view that the proposed acquisition of Flugo Group Holdings AB may allow the online travel company to strengthen its position on the market for hotel online travel agencies in the European Economic Area. As a result of an in-depth investigation, the European commission reached a preliminary conclusion that Booking is the dominant hotel OTA in the EEA.
The EC noted that Booking (BKNG) and Flugo Group's eTraveli are both active in the provision of OTA services, respectively focusing on hotel OTA and flight OTA services. Booking is also noted to be active in the market of metasearch services, mainly through its price comparison platform KAYAK. A combination of the two is anticipated to strengthen Booking's dominant position in the hotel OTA market further, increasing its bargaining position towards hotels and diverting demand from cheaper alternative sales channels. The deal is also seen increasing barriers to entry and expansion by making it harder for competing OTAs to develop a customer base that can support a hotel OTA business. The EC warned the net result could be an increase in hotel costs for customers.
Shares of Booking Holdings (BKNG) were up 0.09% in premarket trading on Monday to $2,608.50.
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