The European Commission has started a full investigation into a
planned on-line travel agency between German ISP T-Online and tour
operators TUI and C&N (Neckermann), also German. It expressed
concerns that the joint venture would be so powerful that it could
mean less choice for end consumers of on-line travel services.
Although only one of the parent companies has important
activities currently in the market for on-line travel services, the
venture would combine the content of the two leading German tour
operators with Europe's largest internet access provider.
T-Online is a subsidiary of Deutsche Telekom which provides
Internet and portal access services. Preussag-owned TUI and C&N
(Neckermann), which is jointly controlled by Lufthansa and Karstadt
Quelle, are two tour operators and travel agents providing
touristic services, including flight seats, package tours, last
minute trips and hotel accommodation. The joint venture, yet to be
named, would be an on-line-travel agency offering various tourist
products in Germany, in particular leisure package trips, last
minute trips, flight seats, which end-consumers could book
online.
The Commission's preliminary investigation identified on-line
travel agency services as a product market in its own right,
distinct from traditional "bricks and mortar" travel agencies.
At this stage, the Commission has concerns that because of the
strength of the parent companies, the joint venture may achieve
such a strong position in online travel that it could progressively
foreclose this still emerging market. The venture would have
privileged access to the content of TUI and Neckermann, the leading
tour operators in Germany, as well as to T-Online's very large
internet customer base.
Competing on-line agents have submitted that they depend on
TUI's and Neckermann's product offer and brands and they fear that
the new company would end up dominating the on-line segment. They
are also concerned about potential discriminatory measures with
regard to access to essential content.
To address these concerns, TUI and Neckermann offered to
conclude supply contracts with any other on-line agents. But a
number of conditions were attached to this general commitment which
would have provided numerous opportunities for circumvention and
de-facto discrimination.
The Commission, therefore, concluded that the commitments
offered did not fully and clearly remove the competition concerns
and decided to enter into an in-depth ("Second-phase") inquiry. The
Commission has now a maximum of four months to assess these
competition concerns in detail and to come to a final decision.
