Following on from the release last week of positive Q3 profits, the world’s largest travel company, Expedia Inc. finds itself at the centre of two major legal disputes involving online distribution.
In litigation spanning each side of the Atlantic and both the airline and hotel industries, Expedia is embroiled in anti-trust lobbying with the Department of Justice in the States and the Office of Fair Trading in the United Kingdom at the same time. On each count, the competition agencies are being asked to review online travel with a view to keeping the space open and free of monopolization.
Expedia’s own competiton concerns are centred on Google Inc's proposed $700 million purchase of ITA Software Inc., the leading provider of flight data. Expedia fears that Google's ownership of the software would give the company too much control of the online air-travel market.
Together with a group of affiliated Online Travel Agents (O.T.A.s) Expedia has set up Fairsearch, a coalition website dedicated to highlighting the market risks should Google be allowed to go ahead with its acquisition.
Google has responded to the criticisms via the company's Public Policy Blog. Andrew Silverman, Senior Product Manager, stated 'ITA does not set ticket prices or sell tickets, but merely analyses data about seat availability and fares'. Against the specific claim that the deal will lead to less innovation in travel search, Silverman commented that the reverse was true and that Google is 'We’re confident that by combining ITA’s expertise in travel with Google’s technology we’ll be able to create great innovations in flight search'.
On the other side of the Atlantic, Expedia is fending off anti-competitive claims against its own strategy in the hotel sector. Dorian Harris, founder of discount hotel website Skoosh, reported Expedia to the Office of Fair Trading in the U.K. earlier this year, alleging that Expedia's practise of rate parity contravenes European competition legislation.
Speaking on behalf of Skoosh, Dorian Harris stated 'I'm amazed that Expedia has chosen this time to lobby the Justice Department on the grounds that it is, in its own words "promoting a healthy internet future" ', adding, 'surely that will bring further attention to its own questionable behaviour in the hotel industry'.
Google has recently ventured further in the hotel sector by adding pricing information and rate comparisons on its map pages. 'The hotel industry welcomes any input into the pricing and availability of hotel rooms', said Harris in defence of Google's move into this space.
Since July, the Justice Department has been conducting an extended antitrust review of the ITA deal and the Office of Fair Trading launched an investigation into anti-competitive behaviour in the online hotel market in September.
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