EC Examines German Online Venture

The European Commission (EC) has launched an investigation into the proposed travel joint venture (JV) among Germany`s dominant ISP, T-Online, Preussag`s TUI and Neckemann`s C&N operation.
The surprise move comes in the wake of T-Online`s battering in the media last year over Internet pricing. Last year AOL filed complaints with the EC over the issue, which has since been overtaken by falling prices in the German Internet marketplace.
This time around T-Online faces a full-scale investigation into its proposed joint venture, a process that could last up to four months. The EC says that, while only one of the companies in the JV has key activities in the online travel industry of Germany, the operation would combine the content of the two leading German tour operators with what is now Europe`s largest ISP.
“At this stage, this powerful and unique combination raises strong concerns that the joint venture would achieve such a strong position that it could potentially result in a reduction of choice for end consumers of travel online services,” said the EC`s press statement on the issue.
Preussag-owned TUI and C&N/Neckermann, which is jointly controlled by Lufthansa and Karstadt Quelle, are two tour operators and travel agents providing tourism services, including flight seats, package tours, last minute trips and hotel accommodations.
The proposed T-Online JV, which has yet to be named, would offer various travel and tourism products in Germany, concentrating on leisure package trips, last minute trips and flight seats, which consumers could book online.
The EC says that its preliminary investigation “identified online travel agency services as a product market in its own right, distinct from traditional `bricks and mortar` travel agencies.”
“At this stage, the Commission has concerns that because of the strength of the parent companies, the JV may achieve such a strong position in online travel that it could progressively foreclose this still emerging market,” said the EC`s press statement.
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