AH&LA and Consumer Watchdog Seek to Block Expedia-Orbitz Merger
Nonprofit advocacy group Consumer Watchdog joined the American Hotel & Lodging Association in opposing the proposed $1.3 billion merger of Expedia and Orbitz, calling for the need to maintain competition and fair prices.
"The proposed deal would give the combined company monopolistic control of the online-booking market, enabling it to impose higher fees on hotels, which would inevitably mean higher costs for consumers," wrote John M. Simpson, Consumer Watchdog's privacy project director, in a letter to the Justice Department.
According to figures from market research firm PhocusWright, the merger could give Expedia and its affiliates 75 percent of the U.S. online travel market. Last week the American Hotel & Lodging Association pointed out that with Priceline and its affiliates controlling 20 percent of the market, the merger would create a duopoly.
"We believe this transaction and the resulting consolidation of the online-travel marketplace will result in significant negative consequences, particularly for consumers, but also for the large number of our members who are small-business owners and franchised properties," wrote the AH&LA, which pointed out that Expedia's fees for hotels currently are 11 percent higher than those of Orbitz.
"Beyond severely restricting consumer choice, we believe the acquisition could exacerbate the problem of deceptive practices by rogue OTA affiliates posing as direct hotel-booking sites," the AH&LA added. "Both companies have affiliate relationships with thousands of smaller websites that offer hotel rooms for booking, some of which have misled consumers who think they are booking directly with a hotel.... Deceptive practices harm consumers."
The Department of Justice currently is reviewing the proposed merger, which was announced in February. Expedia acquired rival Travelocity earlier this year.