Why the Justice Department Won’t Block Expedia-Orbitz Deal Despite the Noise
Photo Credit: Dara Khosrowshahi, President & CEO, Expedia Inc, second from right, at this year's WTTC Global Summit. Flickr / World Travel & Tourism Counci
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 &
