Department of Justice Clears Expedia/Orbitz Merger

A Compass Lexecon team including Dennis Carlton, Gustavo Bamberger, Lynette Neumann, Bryan Keating, and Jon Orszag assisted Thomas Barnett, Anne Lee, Ross Demain and Katharine Mitchell-Tombras of Covington & Burling LLP; and Franco Castelli of Wachtell, Lipton, Rosen & Katz, outside counsel to Expedia, Inc., and Joshua Holian, Amanda Reeves and Kory Wilmot of Latham & Watkins LLP, outside counsel to Orbitz Worldwide Inc. in seeking Department of Justice (DOJ) approval of Expedia’s proposed acquisition of Orbitz.

The DOJ was presented with numerous third-party complaints claiming that Expedia’s acquisition of Orbitz would harm competition by allowing the merged firm to increase commission rates to travel suppliers, such as hotels.

The Compass Lexecon team performed numerous theoretical and econometric analyses, and joined counsel in presenting economic evidence to the DOJ in meetings and white paper materials showing that the transaction was unlikely to cause significant harm to competition.

After several months of review, the DOJ was ultimately persuaded by the analyses presented by Compass Lexecon and counsel. The DOJ stated that “The Antitrust Division investigated the concerns that have been expressed about this transaction. We took those concerns seriously and factored into our analysis all of the information provided by third parties. At the end of this process, however, we concluded that the acquisition is unlikely to harm competition and consumers.”