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The CEO of Booking Holdings criticizes EU competition regulators for blocking the company’s €1.6bn acquisition of a smaller flights-only business, claiming it will impede investment in Europe.
Glenn Fogel, who leads the US global group as well as its subsidiary Booking.com, based in Amsterdam, argues that regulators should reconsider their decisions that would make “the European tech ecosystem less competitive than the United States or other parts of the world.”
Last month, the European Commission blocked Booking’s acquisition of Etraveli, a Swedish company that owns brands like Gotogate and Mytrip and is under the ownership of private equity firm CVC.
Regulators expressed concerns about Booking’s ability to expand its travel services ecosystem and the potential cross-selling of accommodation. Booking has filed an appeal against the decision.
In an interview with the Financial Times, Fogel pushed back, suggesting that Brussels is conveying the message that “big companies cannot enhance their services through the acquisition of smaller ones.” He further stated that this move could hinder investment in small companies in Europe.
“If Booking cannot acquire a tiny flights business with no dominant position, what does it mean for other types of acquisitions?” Fogel questioned.
Tech companies often face challenges navigating conflicting regulatory regimes worldwide. Authorities in the US, EU, and UK analyze deals independently, often reaching different outcomes.
While the EU rejected the Etraveli deal, the UK’s Competition and Markets Authority approved it a year ago.
In the meantime, Microsoft encountered hurdles from the UK’s CMA and the US Federal Trade Commission for its $75bn acquisition of Activision Blizzard, although other regulators, including the EU, gave it clearance.
An attorney by profession, Fogel rejected the EU’s reasoning for blocking Booking’s proposed transaction, claiming that the decision contradicts how European regulators have handled other tech deals and introduces uncertainty for businesses.
“Individuals shouldn’t create their own theories without the involvement of elected officials who can debate and change laws if necessary,” he stated. “I don’t mind arguing facts and laws as long as they are clear and well-understood.”
Fogel cautioned against antitrust authorities overcompensating for lax enforcement in the past when large online platforms like Facebook were permitted to acquire Instagram and WhatsApp without significant scrutiny.
He emphasized that regulators must consider the long-term effects of their actions on dealmaking. “People should think about the broader consequences of these regulatory decisions,” Fogel said.
EU regulators, however, maintain that the Booking-Etraveli merger would have allowed Booking to take advantage of existing customer inertia, making it challenging for competitors to compete.
Fogel dismissed concerns that the acquisition would lead to higher prices for consumers and harm rivals. He argued that this decision is detrimental to society as a whole.
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