US watchdog approves Expedia merger with Orbitz

"First, we uncovered no evidence in our investigation that the merger is likely to result in new charges being imposed directly on consumers for using Expedia or Orbitz. So we focused our investigation on the commissions Expedia and Orbitz negotiate with airlines, car rental companies and hotels. “Second, we found that Orbitz is only a small source of bookings for most of these companies and thus has had no impact in recent years on the commissions Expedia charges. Many independent hotel operators, for example, do not contract with Orbitz, and those hotels that do often obtain very few bookings from its site. In addition, beyond Expedia and Orbitz, travel service providers have alternative ways to attract customers and obtain bookings, including Expedia’s largest online travel agent rival, Priceline. “Third, the evidence suggests that the online travel business is rapidly evolving. In the past 18 months, for example, the industry has seen the introduction of TripAdvisor’s Instant Booking service and Google’s Hotel and Flight Finder with related booking functionality. “Looking at the facts and applying our Horizontal Merger Guidelines, we concluded that Expedia’s acquisition of Orbitz is not likely to substantially lessen competition or harm U.S. consumers.”

“The brands compete for the toss-up customer, those that have no loyalty and I think that will continue going forward.”