Skift Take
With the emergence of TripAdvisor and Google as online travel agency alternatives and Amazon waiting in the wings if it ever figures out what it wants to do in travel, all the signs point toward an increasingly competitive online travel agency market in the U.S. These are factors the DOJ will consider when mulling the Expedia-Orbitz deal.
Is Expedia's $1.6 billion acquisition of Orbitz Worldwide, announced in February, in trouble from an antitrust perspective?
With the U.S. Justice Department reviewing the combination of Expedia and Orbitz out of competition concerns in a process that could take the rest of 2015 or even run as far as May 2016, financial services firm UBS downgraded Orbitz Worldwide's stock last week in part because of fears that DOJ will eventually sue to block the deal. Expedia also acquired Travelocity in January 2015.
"Based on a combination of recent press reports & our own industry conversations, we believe there are increasing antitrust concerns surrounding the proposed EXPE-OWW transaction," UBS stated. "Specifically, our conversations suggest increasing levels of concern being voiced by travel suppliers to regulators regarding an already largely consolidated US OTA market."
In that regard, there are rumors that major hotel chains and/or their trade association, the American Hotel & Lodging Association, are preparing statements/position papers urging the DOJ to alter the deal or oppose it outright.
How DOJ Will Define the Market
The fate of the Expedia-Orbitz deal could hinge on whether the DOJ looks at the acquisition from the perspective of consolidation in the U.S. online travel agency market alone or the U.S. travel market as a whole.
Conventional wisdom holds that the deal would get a much harder look if the DOJ views it from the online travel agency-only lens, and that the acquisition would sail through if regulators evaluate the impact
