NEW YORK, N.Y. – The Justice Department won’t challenge travel booking site Expedia’s $1.3 billion purchase of competitor Orbitz, saying the deal is unlikely to hurt consumers or reduce competition.
The agency said Wednesday that it does not think Expedia will raise the commissions it charges to hotels, airlines and car rental companies or charge new fees to consumers. It noted that Expedia will still have to compete with The Priceline Group Inc. and others and says the online travel business is changing rapidly, with new options and competitors emerging.
Expedia agreed to buy Orbitz for $12 per share in February, and Orbitz shareholders approved the sale in May. The companies have said they want to complete the deal before the end of 2015.
The two companies own websites that allow travellers to book airline tickets, hotel rooms or car rentals. Expedia, of Bellevue, Washington, owns Expedia.com, Hotels.com, Check Tickets, Trivago, Hotwire.com and Travelocity. Orbitz, of Chicago, HotelClub.com, Orbitz.com and CheapTickets.com.
Expedia is set to become the biggest company in the industry in terms of the number of bookings it handles. Priceline, the owner of Bookings.com, Kayak, and restaurant-booking site OpenTable, has more revenue.
Last month the hotel industry said the deal would reduce choice for consumers, leading to higher prices for vacationers and larger fees for hotel owners. The American Hotel & Lodging Association said Expedia and Priceline will control 95 per cent of U.S. online travel bookings, and it said the deal may cost hotels because Expedia charges higher commissions than Orbitz does.
The Justice Department said Orbitz is not a big source of bookings for hotels and others, so the purchase should not affect the commissions Expedia charges.
Expedia Inc. shares advanced 4.9 per cent to $124.68 on Wednesday on reports the deal would win antitrust clearance, and Orbitz Worldwide Inc. stock rose 6.4 per cent to $11.92. Both stocks edged up less than 1 per cent in aftermarket trading.