Expedia, Wotif Deal Raises Competition Concerns

SYDNEY--Australia's competition regulator raised concerns about Expedia Inc.'s (EXPE) 703.1 million Australian dollar (US$656.9 million) bid for Wotif.com Holdings Ltd. (WTF.AU), saying the deal could push up commission rates charged to providers of accommodation.

In a preliminary assessment, the Australian Competition and Consumer Commission said the deal was unlikely to trigger any concern in the market for online air travel, but may raise competition issues in the area of online accommodation. Expedia and Wotif are two of Australia's three largest online travel agents, with the other being Priceline Group Inc. (PCLN).

"Market inquiries have indicated that Wotif is a major source of bookings for Australian accommodation providers and charges a lower commission rate than Expedia," Chairman Rod Sims said in a statement.

"A key issue for the ACCC will be whether the dynamic nature of the industry is likely to facilitate the development of new business models and discipline Expedia's competitive conduct post-acquisition."

The regulator is seeking further submissions from the market by Sept. 19, and hopes to make a final decision on Oct.2.

Write to Ross Kelly at [e-mail]

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