A Few Tenths of a Per Cent Was Enough: What Booking/Etraveli Means for Platform Deals

On 9 September 2026, the General Court dismissed in its entirety Booking Holdings Inc.’s challenge to the European Commission’s prohibition of its acquisition of Etraveli Group (Case T-1139/23).

The judgment is the first in which the EU Courts have endorsed a “reverse leveraging” or entrenchment theory of harm in a platform merger. Its significance lies in a rather uncomfortable proposition for dominant digital businesses: A merger need not make an already weak competitive environment visibly worse if it serves to make that environment harder to escape.

The Court upheld the prohibition notwithstanding material errors in the Commission’s quantitative analysis. The resulting increment in Booking’s hotel online-travel-agency (OTA) market share might amount to no more than a few tenths of a percentage point. That, the Court held, did not dispose of the case. A concentration can significantly impede effective competition by consolidating and perpetuating an already feeble competitive structure.

The judgment may be appealed to the Court of Justice on points of law.

Background

Booking is principally active as a hotel OTA. Etraveli is a leading European flight OTA. Their commercial relationship began in January 2019, when Booking started redirecting customers searching for flights to Etraveli’s websites. From August 2019, Booking sold Etraveli’s flight content under its own brand. From June 2021, Booking could also sell that content through metasearch engines, subject to a cap designed to protect Etraveli’s own business. Board materials for the proposed acquisition appeared in November 2021 under the discreetly cheerful codename “Project Bahamas.”

The transaction did not meet the thresholds of the EU Merger Regulation (EUMR) and would otherwise have been reviewable in Austria, Cyprus, and Germany. In February 2022, the parties requested a referral to the Commission under Article 4(5) of the EUMR. No member state objected. The referral was accepted in March 2022.

On 25 September 2023, the Commission prohibited the transaction. It found Booking dominant in the European Economic Area market for hotel OTA services, with a share of between 60% and 70%. Several features reinforced that conclusion, with the Commission specifically finding that:

• Booking earned higher commissions than its rivals.
• It was an unavoidable trading partner for hotels. For most hotels, it accounted for between 61% and 100% of OTA bookings.
• It enjoyed advantages in brand, advertising, traffic, and customer data.
• Strong network effects and customer inertia created substantial barriers to entry and expansion.

There was no alleged loss of competition between Booking and Etraveli. That would have been the conventional merger story, and this was not it.

The Commission’s theory was instead that flights are frequently the first component of a trip to be booked. Acquiring Etraveli would therefore give Booking another route to acquiring hotel customers, along with additional traffic, data, and customer loyalty. Booking’s own documents described the resulting ecosystem as making its platform “stickier.”

The Commission concluded that the transaction would entrench Booking’s dominance, raise rivals’ barriers to expansion, and strengthen Booking’s bargaining position vis-à-vis hotels.

It also concluded that the claimed efficiencies were insufficient to offset those effects.

Booking offered a behavioural remedy: a Kayak-powered choice screen displaying rival hotel offers at flight checkout. The Commission rejected it as insufficiently neutral, transparent, and effective. It pointed to Booking’s ownership of Kayak, the remedy’s limited scope, and the difficulty of monitoring its ranking algorithm.

Booking did not challenge that aspect of the decision, and the General Court did not address it.

Booking brought its action on 5 December 2023. The case was heard by an extended five-judge chamber presided over by the president of the General Court, Marc van der Woude.

The Judgment

Reverse Leveraging is a Valid Theory of Harm

Leveraging theories ordinarily run in the familiar direction. A firm uses a dominant position in one market to gain ground in another. Here the arrow pointed backwards. Booking would use its position in flights, where it was not dominant, to reinforce its dominant position in hotels.

Booking argued that this departed from the Commission’s 2008 Non-Horizontal Merger Guidelines, which focus on foreclosure. The General Court disagreed.

The Guidelines, it held, provide a general framework rather than a closed catalogue of permissible theories of harm. They also predate the Commission’s experience with reverse leveraging. The relevant question is the effect on competition, not the direction of travel. It would make little sense to intervene where leveraging strengthens a nondominant position while refusing to intervene where it strengthens an already dominant one.

That is the judgment’s first important point. Merger control does not require the Commission to wait for a platform to acquire dominance in the second market before it can object to the acquisition. Nor does the absence of a conventional vertical foreclosure story immunise an ecosystem transaction.

The Court also rejected Booking’s argument that cross-selling hotel rooms to flight customers constituted competition on the merits. It accepted that cross-selling involved no commercial pressure on customers and was therefore different from tying or bundling. But the concept of competition on the merits, as developed under Articles 101 and 102 of the Treaty on the Functioning of the European Union, does not perform the same function in merger control. The EUMR asks what a concentration will do to the structure and effectiveness of competition.

That distinction matters. A commercial practice can be perfectly legitimate when undertaken by a firm and nevertheless be relevant to the competitive effects of acquiring another business.

The Commission’s quantitative analysis contained errors that were material to its conclusions.

The General Court nevertheless found several defects in the Commission’s calculation of the increment in Booking’s hotel OTA market share. The Commission’s figure is redacted in the published judgment.

In particular, the Commission:

• Attributed to the transaction hotel bookings made alongside nonflight services, such as taxis and car rental;
• Applied the no-cannibalisation rate under one of its two methodologies and could not explain at the hearing why the methodologies produced divergent results; and
• Measured Booking’s projected 2025 sales against a market size measured in 2022, thereby assuming no market growth or inflation, despite the decision itself assuming inflation of 5.4% in 2023 and 3% annually thereafter.

The Court concluded that the increment could be limited to a few tenths of a per cent.

It also found that the Commission had not established that the transaction would cause hotels to shift inventory to Booking, terminate relationships with rival OTAs, or pay higher commissions.

Those are not cosmetic defects. They went to the Commission’s quantitative account of how the transaction would change the market.

And yet they did not save the transaction.

The Court upheld more limited findings of harm. Booking’s incentive to reduce its commissions would weaken, while some hotels and consumers would likely pay more as bookings shifted away from hotels’ lower-cost direct channels.

The lesson is not that numbers no longer matter. It is that, in a platform case, numbers may not be the whole case.

A Significant Impediment to Effective Competition Was Nonetheless Established

The Court first upheld the Commission’s finding of dominance, including its conclusion that customer loyalty to Booking was attributable principally to inertia rather than satisfaction. It then considered the central question of whether strengthening that position amounted to a significant impediment to effective competition, or SIEC.

The Court confirmed that strengthening a dominant position does not, by itself, establish an SIEC. The Commission must identify what makes the strengthening significant.

But the EUMR does not require the Commission to demonstrate that competition will become measurably worse than it is today. A concentration that consolidates and perpetuates an already low level of competition can itself constitute an SIEC. That is the proposition likely to matter most in future platform cases.

The Court identified two circumstances that made the strengthening significant here.

First, network effects and scale. The market had strong network effects, high barriers to entry, and a substantial gap between Booking and its rivals. In such a market, even a small increase in Booking’s scale could chill rivals’ ability to expand.

Second, the acquisition channel. The increment would come through one of the few customer-acquisition channels that Booking did not already dominate. The acquisition would therefore help create a travel ecosystem that rivals would find difficult to reproduce.

The General Court accepted that flight-led OTAs such as Trip.com, Lastminute, TUI, and eDreams ODIGEO held only modest shares of the hotel OTA market. That did not make them irrelevant. As potential challengers, they played a sufficiently important role in the competitive process, and the transaction would have a disproportionate effect on their ability to compete.

The Court also considered the market-share increment an imperfect proxy for the transaction’s effect. A flight booking supplies data that can be used to cross-sell hotel rooms both before and after the flight is purchased. The competitive value of the acquisition therefore could not be reduced to the number of hotel bookings attributable directly to Etraveli.

Finally, the Court confirmed that a prohibition may rest on qualitative evidence, provided that evidence is cogent, consistent, and complete.

This is perhaps the most important practical consequence of the judgment. A dominant platform cannot necessarily answer a qualitative entrenchment theory by producing a small arithmetic increment and declaring victory.

Counterfactual Challenges Must Be Capable of Affecting the Outcome

The Court rejected Booking’s contention that the Commission had relied on a “zero-flights” counterfactual. The Commission had accepted that Booking would probably retain a flight offering in any event. But the Court also treated the dispute as immaterial. Under either party’s counterfactual, the increment was marginal. The choice between the counterfactuals therefore could not affect the outcome.

It is a useful reminder of a point often lost in elaborate counterfactual debate: a dispute about the counterfactual matters only if it can change the answer.

Efficiency Claims Must Be Advanced During the Administrative Procedure

The Court upheld the Commission’s rejection of Booking’s efficiency claims. The one-stop-shop argument was inadmissible because Booking had referred during the administrative procedure to consumer benefits but had not presented them as an efficiency. An expert report prepared after the decision could not repair that omission.

The claim that the transaction would reduce flight prices also failed. Booking had produced no internal evidence showing an intention to pass cost savings on to consumers. Its predictions about how rivals would respond on price were likewise insufficiently verifiable.

Finally, benefits to flight customers could not offset harm in the hotel OTA market because the two groups of consumers were not substantially the same.

The moral is rather less glamorous than the economics. If an efficiency matters, say so and substantiate it — before the Commission has finished its investigation. Litigation is not a second administrative procedure.

Further Observations

Several features of the judgment deserve more attention than they have so far received.

First, forum selection. The parties themselves requested the referral to the Commission. There is an obvious attraction in obtaining a single review of a below-threshold transaction. But the case illustrates the other side of the bargain: the choice of forum can have substantive consequences, particularly where a transaction may attract a novel theory of harm. An Article 4(5) EUMR referral is therefore not clerical housekeeping. It is a strategic decision.

Second, the channel-manager argument. Booking argued that hotels’ widespread use of channel managers allows them to list on multiple OTAs at little additional cost. The Court held that the Commission had breached its duty to examine all relevant aspects of the case by failing to address that argument. It therefore set aside the finding that hotels would terminate their relationships with rival OTAs. Again, however, the error did not affect the result.

Indeed, the General Court relied on the same evidence to conclude that smaller OTAs can obtain access to hotels despite their size and therefore play a meaningful role in competition. Booking’s own application had described several of them as among its “main rivals.”

The Court also observed that Booking, as the principal supplier of hotel content to other OTAs, was best placed to identify the market participants concealed in the unexplained “Others” category. It had not done so.

The point is worth noting. Evidence deployed to undermine one part of the Commission’s case can, if the record is not handled carefully, reinforce another.

Third, the burden of proof. The Court treated the absence of evidence that hotels would shift inventory to Booking as a consequence of Booking’s existing dominance, rather than as evidence that the strengthening of that dominance was insignificant. Some 88% of hotels were already on Booking’s platform. Booking’s own 2019 documents recorded that the return from capturing the remainder appeared low.

The Court went further, ruling that the Commission should not face an especially high burden in proving the likely growth of rivals to a dominant firm because dominance itself makes such growth harder to establish.

The practical consequence is uncomfortable but straightforward: the more entrenched the incumbent, the less readily the absence of dramatic incremental harm will answer the Commission’s case.

Fourth, internal documents. This is yet another case where the Commission made its case by relying heavily on the parties’ own documents. Those included references to a “stickier” platform, Etraveli’s description of itself as the “#1 flight platform” and Booking’s description of Etraveli as “best-in-class.” Booking’s integration projections were used to calculate the increment despite its objections. An economic analysis prepared for the proceedings was given less weight than a document prepared in the ordinary course of business.

This is not a novel lesson in merger control. It is nevertheless one that digital businesses continue to rediscover at considerable expense. The document written to explain why an acquisition is strategically attractive may later become the document explaining why the acquisition is competitively dangerous.

Practical Implications

For dominant platforms, the judgment arguably closes several familiar avenues of defence.

A small, even miniscule, market-share increment; the absence of horizontal overlap; and a plausible consumer-benefit narrative will not, without more, answer the Commission’s entrenchment theory in a market characterised by network effects.

The questions that matter are more structural:

• Will the target feed traffic, data, or customer loyalty into the acquirer’s core business?
• Does the target provide access to a customer-acquisition channel that rivals cannot readily reproduce?
• Do existing rivals depend on that channel to expand?
• Does the transaction make an already dominant platform materially harder to challenge, even if its market share barely moves?

Those questions should be addressed from the outset, beginning with the choice of forum.

An Article 4(5) EUMR referral is a strategic decision, not an administrative convenience.

Internal documents require equal care. Transaction rationales, integration plans and descriptions of “stickiness,” ecosystems or customer acquisition are likely to be read not as corporate poetry but as evidence of competitive intent and effect.

Once review is underway, parties should put their evidence before the Commission during Phase II and articulate their arguments clearly enough that any failure to address them is apparent on the record.

Efficiency claims should be expressly identified as efficiencies, quantified where possible and supported by ordinary-course documents demonstrating an intention to pass benefits to consumers.

Behavioural remedies should be designed to withstand scrutiny on independence, transparency, and scope. The Commission’s treatment of Booking’s choice screen indicates the level of suspicion that may surround remedies controlled, directly or indirectly, by the merging parties or their affiliates.

Outlook

The judgment gives judicial support to several themes already visible in the Commission’s draft revised Merger Guidelines:

• Entrenchment as a standalone theory of harm;
• Innovation-related theories of harm;
• Ecosystems and customer-acquisition channels;
• Contestability and network effects;
• Reliance on qualitative evidence; and
• A stricter approach to efficiencies.

The final Guidelines are likely to reflect this framework.

Booking may appeal to the Court of Justice on points of law within two months and 10 days of notification of the judgment. An appeal would likely focus on two questions:

• First, can the consolidation of an already weak competitive environment constitute a SIEC even where the transaction does not make that environment measurably worse?
• Second, to what extent may the Commission’s evidential burden be reduced by the very dominance whose further entrenchment it seeks to prevent?

Those questions reach beyond Booking and Etraveli. They concern a basic proposition in contemporary merger control: whether competition law should intervene only when a transaction makes a market worse or also when it makes an already uncompetitive market harder to change.

The General Court has now answered that question in the affirmative.

A few tenths of a per cent, in other words, can be enough.