Why The Booking And Etraveli Ruling Matters For Digital Acquisitions

A digital acquisition can face serious competition concerns even where the buyer and target are not close rivals. A target may give an already powerful platform another way to reach customers and make it harder for competitors to challenge its position.

Plans for cross-selling, customer retention, data use and access to distribution can be central to the commercial case and relevant to competition review.

Why a flight business mattered to hotel bookings

Etraveli’s flight-booking business offered a route to customers who might also book hotels. The concern was that the acquisition would strengthen Booking’s existing dominance in hotel online travel agencies.

The Court accepted that the Commission could examine this form of “reverse leveraging”. Put simply, strength in an adjacent business could reinforce dominance elsewhere. The 2008 guidelines on non-horizontal mergers did not prevent the Commission from addressing newer forms of digital-market harm. ¹