Playing Monopoly

The Justice Department approved a merger recently between online booking agent Expedia and Orbitz.  I was a little bit surprised by the statement from the assistant Attorney General who said that after looking at all the information provided by third parties the deal  was "unlikely to harm competition and consumers."  That may well be true, but given that Expedia has previously purchased one of its biggest competitors, Travelocity, and also owns Hotels.com, Hotwire, trivago and some others, it just seems a surprising decision.

There are other online booking sites, most notably Priceline, and also some new entries from TripAdvisor and Google, so there remains competition, and there's nothing illegal or monopolistic about a company being hugely successful, if it reaches that success fairly.  But between Expedia and Priceline now, they make up 95% of the market.  So what competition there is does seem a bit limited.

The American Hotel and Lodging Association has the same perception.  They released a statement that said -- “By approving this deal, only two players control the online marketplace: Priceline and the behemoth Expedia."  And then added, "We continue to believe that increased consolidation is bad for consumers and bad for business."