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This move follows after Booking sent a confidential memo to the authorities challenging their decision, and laying out details for why the company thinks the commission's arguments are flawed.

Booking Holdings’ proposed 1.63 billion euro ($1.7 billion) purchase of Swedish peer ETraveli Group was blocked by EU antitrust authorities on Monday after the company failed to allay concerns about its dominance in online hotel reservations.

The European Commission, which acts as the competition watchdog in the 27-country European Union, said Booking’s remedies were not sufficient to address its concerns, confirming a Reuters story earlier this month.

The veto suggests that EU regulators may be taking a tougher stance on mergers in the digital sector.

EU antitrust chief Didier Reynders said the travel market was becoming more digital, in particular the online travel agency (OTA) market which includes hotels, flights, car rentals and attractions.

Hotel OTAs are worth about 40 billion euros annually, the largest and most profitable segment of the OTA sector.

“The combination of network effects and consumer inertia means that many consumers get information on room availability and prices only from OTAs, often only from Booking,” Reynders told a press conference.

He said the Commission had reached out to almost 15,000 hotels for feedback on the proposed deal.

“Overall, market participants were concerned that the transaction would strengthen Booking’s dominant position on the market for hotel OTAs in the European Economic Area, reduce competition and increase prices for hotels and possibly for consumers.”

Booking said it would challenge the veto, which has won unconditional approval in the United States and Britain.

It also extended a flight agreement with ETraveli to 2028, underlining its determination to grow its flight business despite the EU ruling.

“The European Commission’s decision not only departs from settled law and precedent but it deprives consumers of travel options that they are entitled to have,” Booking Holdings’ Chief Executive Officer Glenn Fogel said in a statement.

The Commission said Booking’s proposal to show multiple hotel options to customers who book flights on its site was not sufficiently transparent and non-discriminatory, and difficult to implement and monitor.

Booking, whose brands include, Rentalcars, Priceline and Agoda, announced the deal in November 2021.

ETraveli, owned by private equity firm CVC Capital Partners, owns Gotogate and Mytrip and also operates airline content distribution services provider TripStack.

Reporting by Foo Yun Chee; editing by Philip Blenkinsop, Kirsten Donovan

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Tags: booking holdings, etraveli, europe, mergers and acquisitions

Photo credit: A sponsored area in a pavilion at Web Summit 2019 in Lisbon, Portugal. WebSummit/Paulo Moura Photography / Flickr/Creative Commons

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