Commerce Commission gives go-ahead for Expedia and Wotif

Commerce Commission gives go-ahead for Expedia and Wotif merger

The Commerce Commission has given online travel agent (OTA) Expedia Inc. the go-ahead to acquire up to 100% of the shares of Wotif.com Holdings Limited.

The focus of the Commission’s investigation was on the competition effects of the merger in the market for online accommodation bookings for New Zealand accommodation providers and consumers. In particular, if the loss of Wotif would mean that it would be easier for the two remaining main players in the market, Expedia and Priceline (Booking.com), to raise prices or reduce service quality.

The Commission is satisfied that the merger will not have, or would not be likely to have, the effect of substantially lessening competition in all affected markets. In particular, the Commission found that metasearch sites such as TripAdvisor and Google Hotel Finder are playing an increasingly important role in the online market for accommodation bookings.

“Market participants raised concerns that Wotif was an important source of bookings for some accommodation providers and that its removal from the New Zealand market may result in them paying higher commission rates to the remaining OTAs,” said Commerce Commission Chairman Dr Mark Berry.

“However, we are satisfied that the online accommodation booking industry is dynamic. We are seeing sites such as TripAdvisor looking at competing directly with OTAs in this market by allowing accommodation providers to promote themselves directly alongside OTAs. We expect this to constrain Expedia and Booking.com in the future,” said Dr Berry.

You can find the Statement of Preliminary Issues and the public version of the application on the Clearances Register. The Commission’s decision document will be added to the Register when it is available.

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