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Groups Seek To Block Orbitz Launch

Antitrust and consumer groups ask DOT to stop launch of Orbitz.

By Cheryl Rosen
InformationWeek
May 25, 2001 09:08 AM

A contingent of 25 antitrust and consumer groups this month called on the Department of Justice's Antitrust Division to stop the launch of Orbitz, the travel Web site sponsored by the leading national airlines. In particular, the group cited the joint venture's incentive structure, which will make it likely that the airlines will offer Orbitz lower fares than competing sites, like Travelocity.com or Expedia.com, get. Calling the Department of Transportation decision "shortsighted and dangerous," the group argued that permitting Orbitz to launch will send "a clear message that the federal government isn't particularly concerned when virtually all the members of an industry join together in a marketing venture, provided that the precise words of their chartering document are lawyered in such a way that an exclusive dealing agreement is not explicitly spelled out."

It's fair to assume the airlines also will list their own tickets first, raising another concern not mentioned by the group. A soon-to-be-released report sponsored by the Hotel Electronic Distribution Network Association found that 80% of online consumers choose a hotel from among the offerings on the first screen they see, rather than scrolling down to see the full list. Fully half of consumers take the first or second choice listed, no matter how many hotels are presented.