Regulators give go ahead for Expedia-Orbitz merger

The Justice Department on Wednesday gave the go ahead for the merger of Expedia and Orbitz, concluding that the deal is “unlikely to harm competition and consumers.”

The department concluded that the merger of the two online booking agents will not result in increased prices for consumers and found that the online travel industry has gained a number of new competitors in the past year and a half, including platforms from TripAdvisor and Google. 

{mosads}”The Antitrust Division investigated the concerns that have been expressed about this transaction. We took those concerns seriously and factored into our analysis all of the information provided by third parties.  At the end of this process, however, we concluded that the acquisition is unlikely to harm competition and consumers,” Assistant attorney general Bill Baer said in a statement. 

The Justice Department also found that the deal is unlike to affect the commissions the companies take when negotiating with airlines, car rental agencies and hotels. 

The companies’ stock prices surged amid the Wednesday news. Expedia stock shot up about 5 percent, while Orbitz stock rose more than 6 percent by the close of the markets. 

Some estimates find that Expedia will control about a three quarters of the online booking market for hotels, airlines and rental cars after the deal goes through. It’s largest online rival is Priceline. 

Expedia in February announced that it would acquire Orbitz at a value of $1.6 billion. Expedia already owns a number of booking sites, including Hotels.com, Hotwire, Travelocity, trivago and others. Orbitz controls sites like cheaptickets.com and ebooker.com. 

Hotel and lodging trade groups had pressed to block the deal and warned of increasing consolidation in the industry. Some consumer advocates as well as a few Democrats had also been weary of the merger. 

“By approving this deal, only two players control the online marketplace: Priceline and the behemoth Expedia,” The American Hotel and Lodging Association said in a statement expressing disappointment with the approval. 

it added: “Together, these two players control over 95 percent of the online travel agency bookings in the United States. We continue to believe that increased consolidation is bad for consumers and bad for business.”