The Commission has opened a detailed investigation under the EU Merger Regulation into Travelport’s proposed acquisition of Worldspan. Both companies provide electronic travel distribution services through a global distribution system (GDS). The Commission’s initial market investigation has found that the proposed transaction would give rise to competition concerns on the market for the provision of GDS services to travel service providers (airlines, car rental companies, hotels, etc) in the European Economic Area (EEA) and to travel agents in several Member States (Belgium, Hungary, Ireland, Italy, The Netherlands and UK). A decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days (until 13/09/2007) to take a final decision on whether the concentration would significantly impede effective competition within the EEA or a significant part of it.
A GDS allows travel service providers to distribute their travel content to travel agencies and ultimately to end-consumers and enables travel agencies to access and book travel content (such as flights and accommodation).
There are four GDSs operating on a global basis. Travelport owns and operates Galileo, which is the second largest GDS in the EU. Worldspan is the fourth largest in the EU. The remaining two GDSs are Amadeus (the largest GDS in the EU) and Sabre (the third largest).
During its initial investigation, the Commission has identified serious concerns that the acquisition by Travelport of Worldspan might lead to significant impediments to competition within the EEA.
On the markets for the provision of GDS services for travel agencies, the parties would have combined market shares ranging from 40% to over 70% in Belgium, Hungary, Ireland, Italy, The Netherlands and the UK. On the market for the provision of GDS services to travel service providers, the merged entity would remain the second largest GDS (behind Amadeus). In its in-depth investigation, the Commission will assess the effects of the reduction of the number of GDSs from four to three and the elimination of competition between Galileo and Worldspan on competition in the EEA, and in particular whether prices for GDS services to travel service providers would increase. [3 May 2007]