US watchdog approves Expedia merger with Orbitz

Expedia said that it was acquiring Orbitz for $ 1.34 billion earlier in the year.

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The Justice Department’s antitrust division closed the six-month investigation after finding no harm to competition from the combination, according to a statement Wednesday.

Chicago-based Orbitz Worldwide was officially bought by former rival Expedia on Thursday, a day after federal regulators dropped an objection to the $1.6 billion merger.

Booking.com, OpenTable and Kayak are owned by Expedia’s rival Priceline.

There was no evidence the deal is likely to result in new charges being directly imposed on consumers for using the travel-booking sites, the Justice Department said. So we focused our investigation on the commissions Expedia and Orbitz negotiate with airlines, car rental companies and hotels. But Assistant Attorney General Bill Baer said it won’t violate antitrust law.

The move, the latest in a wave of consolidation to hit the online travel booking space, sparked some concerns.

“We concluded that the acquisition is unlikely to harm competition and consumers”, Baer said in a statement.

In announcing the deal in February, Expedia executives said the Orbitz acquisition should provide about $75 million annually in “synergies” but provided no detail on what the effect would be on Orbitz headquarters at 500 W. Madison St.in Chicago.

Last month, the hotel industry issued a dire warning that after the merger, Expedia and Priceline would control 95 percent of US online travel bookings. Simply put, this decision will hurt consumers and small business owners, and remove choice from the marketplace.

Despite the growing popularity of online travel agencies for booking travel, they accounted for 16% of travel gross bookings in the U.S. last year vs. 28% share at each of the other channels – supplier websites, travel management firms and phone or walk-ins, according to Phocuswright.

“We are not alone in our opposition to this deal”.

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“The antitrust division investigated the concerns that have been expressed about this transaction”. That is because companies in the industry started buying to consolidate their presence.

The merger comes amid a tumultuous time for travel sites which once dominated the search for and booking of hotels airline flights and rental cars