Booking is comfortably the largest hotel online travel agency (OTA) in the EEA and deemed to hold a dominant position in the hotel OTA market. Etraveli is a leading flight OTA, but did not hold a dominant position. The Commission's concern was not a classic loss of competition between the two, since their activities were complementary. Instead, the Commission argued that Booking would use Etraveli's flight OTA business as an acquisition channel. New flight customers (and their associated data) would be fed into Booking's hotel platform, deepening the network effects and customer inertia that already made the hotel OTA market hard to contest. This in turn would increase the already high barriers to entry or expansion for the hotel OTA market, and give Booking more market power, harming its hotel and travel customers. The General Court's judgment endorses the Commission’s theory of harm.
The most important message is not the outcome but the method. The Court confirmed that the Commission's 2008 Non-Horizontal Merger Guidelines never closed the door on ‘new’ theories of harm, such as reverse leveraging, even if this scenario is not explicitly mentioned in the guidelines. Reverse leveraging means using a non-dominant position in one market to reinforce dominance in another. The Court held that this is not a novel theory bolted on to those guidelines. It was always consistent with them, because those guidelines were only ever a framework, not a closed list. Moreover, the mechanism of harm resembled the foreclosure mechanism, on which the non-Horizontal Guidelines are built.
The Court disagreed with Booking's fallback argument that cross-selling hotels to flight customers was ordinary ‘competition on the merits’ and therefore should not be characterised as anticompetitive. That concept comes from the Article 102 case law, where it distinguishes normal competitive conduct from abuse. Merger control looks at a transaction's structural effect on competition, not the merged company's later conduct. A consumer-friendly rationale for a deal does not defeat a structural theory of harm. At most, it becomes an efficiency argument, but the Court stresses efficiency arguments must be made by the parties as an offsetting defence and need not to be considered by the Commission in its theory of harm.
