Booking Holdings Inc (NASDAQ:BKNG) has had its $1.8 billion acquisition of Swedish flight booking firm Etraveli blocked by the European Union, which says could cause prices to rise for consumers.
According to the EU, the acquisition would increase Booking.com’s dominant position in the market.
Based on an investigation, the European Commission said it would cause higher costs for hotels and potentially high prices to consumers.
“During our investigation, we reviewed large quantities of documents from the parties and received substantive feedback from competitors, customers and many other stakeholders to understand the potential impact of the deal,” the European Commission said in a statement.
“In our decision we conclude that already today Booking is dominant on the market for hotel OTAs in the EEA with a market share close to 70%, which has steadily increased over the past 10 years, and that the merger would allow Booking to further strengthen its dominant position.”
“Our investigation also shows that the transaction would lead to higher costs for hotels and, possibly, consumers.
“The strengthening of Booking's dominant position would further increase its bargaining position towards hotels and would divert demand from cheaper sales channels to Booking thus increasing hotels' costs.”