Fenwick & West antitrust chair Mark Ostrau was featured in a Law360 article about the planned merger of Expedia, Inc. and Orbitz Worldwide Inc.
Officials in a number of European countries, along with China, are already conducting investigations into most-favored nations clauses that companies like Expedia use to broker best price guarantees for hotel rooms, Law360 reported.
Similar concerns about the leverage an Expedia-Orbitz deal could impose on hoteliers and various suppliers could be scrutinized in the merger review, both in Europe and the United States, the article went on to say.
Said Ostrau, "What this gives [the authorities] is the opportunity to think about whether the acquisition sufficiently increases Expedia's incentives and ability to undertake what might be anticompetitive conduct.”
According to the article, the notion that the best price agreements might be anti-competitive seems to have a more receptive audience in Europe than the U.S., though historically the Department of Justice has “shown interest” in similar most-favored nation clauses.
"At this point it may be that the Justice Department does not view that Expedia has the ability to [impose anti-competitive MFNs] given the market dynamics, so now what they have to do is look at is [whether] with the new market dynamics they would have the ability to do that,” Ostrau told Law360. “That’s a valid issue to resolve in a merger investigation.”