Friday, August 01, 2003

Antitrust News: Orbitz Cleared

A second federal antitrust investigation into Orbitz, the online travel company co-owned by five U.S. airlines, found no evidence of "anticompetitive conduct":
R. Hewitt Pate, Assistant Attorney General in charge of the Department's Antitrust Division, issued the following statement today after the Department announced the closing of the Orbitz joint venture investigation:

"After an extensive investigation of the available facts, the Antitrust Division concluded that the Orbitz joint venture has not reduced competition or harmed airline consumers. This thorough review involved interviewing numerous interested parties, reviewing many documents that were produced by Orbitz as well as by third parties, engaging in extensive empirical analyses of airline booking data, and examining the analyses suggested by third parties.

"The Division considered several theories of harm none of which was ultimately borne out by the information collected by the Antitrust Division. These concerns included whether certain Orbitz contract terms would facilitate coordination among the participating airlines or reduce their incentives to discount resulting in higher fares and whether those contract terms would make the Orbitz joint venture dominant in online air travel distribution. The Division found that those terms did not result in higher fares or make Orbitz dominant in online air travel distribution."
Orbitz was previously investigated by the Transportation Department's inspector general, who also found no "consumer harm" resulted from the formation and operation of the joint venture. And the pesants rejoice!

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