Technology

UK’s Competition and Markets Authority blocks Sabre’s Farelogix acquisition

The United Kingdom’s Competition and Markets Authority (CMA) has blocked Sabre’s proposed acquisition of Farelogix.

Following an in-depth investigation, the CMA found that airlines, travel agents and UK passengers would be worse off following the merger, which it said would lead to “fewer new features that may be released more slowly” and that “fees for certain products might also go up”.

“We recognise that our decision in this inquiry comes at a time of uncertainty and disruption in the global travel industry due to the COVID-19 pandemic,” Martin Coleman, chair of the CMA inquiry group, said in a statement.

“It remains important that we protect competition among businesses that provide services to airlines and the benefits such competition can bring for airlines and passengers.

“We never take decisions to block mergers lightly and in this case the evidence of harm is clear.”

In its ruling, the CMA also argued that the acquisition would result in less innovation on the part of Sabre.

“The CMA has found that Farelogix offers airlines a good alternative,” it said.

“Sabre is also investing in its ability to better meet airlines’ needs.

“The CMA considers that Farelogix’s continued independence will likely help motivate Sabre to innovate further, giving airlines more choices in connecting to travel agents that will allow tickets and extra products to be sold through travel agents in more innovative ways.”

The ruling comes just days after a United States federal court said it would not stand in the way of the US$360 million (nearly $560 million) purchase.

Sabre had successfully defended its acquisition of Farelogix from an antitrust lawsuit by the US Department of Justice, after the government failed to prove that Sabre’s purchase would substantially lessen competition for booking services for airline tickets sold through traditional travel agencies in the US.

The Department of Justice remains free to appeal that decision.

In response to the UK ruling, a Sabre spokesperson told Travel Weekly the company would mull its next steps.

“We are disappointed by the CMA’s findings, particularly in light of the US federal court’s ruling, which found that Sabre’s acquisition of Farelogix is not anti-competitive and should not be prohibited,” a Sabre spokesperson said.

“We are reviewing the CMA’s findings and will carefully consider our options.”

Featured image credit: iStock/MicroStockHub

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