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US online travel site Booking Holdings has accused EU regulators of acting unlawfully in blocking its €1.63bn acquisition of Sweden’s Etraveli Group because they have allegedly not demonstrated that the deal will force rivals to close.
Booking, whose biggest subsidiary is Booking.com, announced in November 2021 it wanted to acquire Etraveli, which runs brands such as Gotogate and Mytrip and is owned by private equity giant CVC.
Brussels fears that Booking’s acquisition of the flights-only company will boost its market share and stifle competition. An official decision to block the deal is expected as soon as Monday, according to three people with knowledge of the move.
But in a confidential document sent to competition watchdogs in the bloc and seen by the Financial Times, the company argued the deal would foster competition and that would “promote consumer welfare”.
Booking accused officials of using “misleading” and “selective” facts and said the EU’s arguments were “contrary to both EU merger regulation and established case law”. It added it would challenge any ban in court.
Officials’ calculation of an increase in market share for Booking of between 1 and 3 per cent by 2026 was “insignificant” and unlikely to result in any significant harm to competition, Booking said.
It claimed blocking the deal “will not only be harmful for the [companies] and European consumers, but will also leave other competitors and market participants worse off than they would have been if they were able to avail themselves of the [concessions] offered by Booking”.
In July the FT reported that Booking had offered to give travellers who booked a flight with Etraveli accommodation options beyond those offered by Booking to appease officials’ concerns that it would only offer its own hotel and apartments services alongside flight reservations. Regulators in Brussels fear that an increase in market share as a result of the acquisition will not only harm rivals but lead to higher prices for consumers.
But the concessions were not enough to prevent a veto.
Despite the deal being blocked, Booking has said it will renew a four-year commercial agreement it had with Etraveli for a further five years. Booking has argued that even without this commercial agreement it will continue to increase market share.
“This remedy would have had a significant impact on competition by giving
rival hotel [online travel agencies] […] direct access to Booking’s flight customers and the opportunity to compete for new business directly on Booking’s platforms, web pages and mobile apps,” the document said.
The European Commission, the EU’s executive body, declined to comment.
This is not the only takeover facing trouble with regulators. Brussels is also closely examining Orange’s proposed €19.6bn purchase of mobile telecom MasMovil. Officials’ concerns in that case stem from the potential reduction in the number of Spanish market operators, fearing it could result in increased prices and diminished innovation.
Another deal also facing heavy scrutiny is software group Adobe’s $20bn move to acquire cloud-based design company Figma on the grounds that consolidation could harm markets.
