Sibel ÖZTÜRK, LL.M. | Attorney-at-Law
On 9 September 2026, the General Court of the European Union dismissed the action for annulment brought against the European Commission’s decision of 25 September 2023 prohibiting Booking Holdings’ proposed acquisition of Etraveli Group (Case T-1139/23). Although the General Court identified errors in certain aspects of the Commission’s economic assessment, it upheld the central finding that the transaction would strengthen Booking’s dominant position in the market for online hotel travel agency services and significantly impede effective competition.
The judgment is particularly important for assessing acquisitions by digital platforms in complementary markets. It addresses the role of network effects, customer acquisition channels and the expansion of digital ecosystems in merger control, while clarifying the application of the significant impediment to effective competition (SIEC) test.
Background to the Transaction and the Commission’s Prohibition Decision
Booking Holdings provides online travel reservation services through a number of digital platforms, notably Booking.com. Sweden-based Etraveli Group specialises in online flight bookings and is a significant provider of online travel agency services in the European Economic Area (EEA).
The proposed transaction involved Booking acquiring sole control of Etraveli Group, enabling it to integrate flight booking activities more closely into its existing travel services ecosystem. The parties already had a commercial relationship before the transaction: Booking offered flight reservations using services supplied by Etraveli. The acquisition would, however, have gone beyond that commercial arrangement by expanding Booking’s flight booking activities and its ability to reach potential hotel booking customers through those activities.
Although the transaction did not meet the ordinary turnover thresholds under Council Regulation (EC) No 139/2004 (the EU Merger Regulation), it was referred to the Commission at the parties’ request pursuant to Article 4(5). Following acceptance of the referral request on 9 March 2022, the transaction was formally notified on 10 October 2022. The Commission opened an in-depth investigation on 16 November 2022 and issued a Statement of Objections on 9 June 2023. Booking subsequently offered commitments intended to address the identified competition concerns.
In its decision of 25 September 2023 (Case M.10615), the Commission concluded that the acquisition would strengthen Booking’s dominant position in the EEA market for hotel online travel agency services and significantly impede effective competition. Finding that the proposed commitments did not adequately and durably resolve those concerns, the Commission declared the concentration incompatible with the internal market under Articles 2(3) and 8(3) of the EU Merger Regulation.
The Commission’s Competition Concerns: Network Effects and the Expansion of a Digital Ecosystem
The Commission’s assessment rested on Booking’s already strong position in the EEA market for hotel online travel agency services. It found that Booking held a market share exceeding 60%, was substantially larger than its competitors and enjoyed considerable bargaining power vis-à-vis hotels.
The concerns did not arise from a conventional horizontal merger between two major competitors in the same market. Booking’s principal activity was hotel reservations, whereas Etraveli specialised in flight reservations. Rather, the Commission considered that integrating these complementary activities would reinforce Booking’s existing dominance in hotel online travel agency services.
According to the Commission, flight reservations often represent an early stage in travel planning and provide access to consumers who may subsequently book accommodation. Acquiring Etraveli would allow Booking to expand its flight booking capabilities, attract additional customers into its ecosystem and offer those customers hotel reservations.
This mechanism relies on cross-selling: offering complementary services to the same customers. For example, a consumer purchasing a flight through Booking could subsequently book accommodation through the same platform.
The Commission considered that the effects would extend beyond additional sales. Booking’s extensive hotel offering attracts more consumers, while a growing customer base makes the platform increasingly important to hotels. These mutually reinforcing network effects can make it more difficult for competing platforms to build the customer base and hotel inventory needed to compete effectively.
Against this background, the Commission concluded that the acquisition would give Booking access to an important customer acquisition channel, reinforce network effects, increase barriers to entry and expansion, and weaken rivals’ ability to exert competitive pressure. The Commission also considered that greater bargaining power vis-à-vis hotels could lead to higher intermediation commissions and, potentially, higher costs for hotels and consumers.
The theory of harm therefore focused less on the immediate increase in Booking’s market share than on the reinforcement of its existing dominance through the expansion of its digital travel ecosystem.
Booking’s Arguments and the General Court’s Assessment
In its action for annulment, Booking challenged, among other matters, the legal framework applied to the non-horizontal merger, the assessment of the competitive conditions that would have prevailed without the transaction, and the sufficiency of the evidence supporting a significant impediment to effective competition.
Non-Horizontal Mergers and Reverse Leveraging
One of Booking’s principal objections was that the Commission had relied on a theory of harm not expressly set out in the 2008 Guidelines on the assessment of non-horizontal mergers.
In conventional leveraging, an undertaking uses its market power in one market to strengthen its position in another. The Booking/Etraveli transaction presented a different mechanism: Booking would acquire activities in the flight online travel agency market to reinforce a position of dominance it already held in the hotel online travel agency market. This is described as reverse leveraging.
The General Court rejected Booking’s objection, finding that the 2008 Guidelines do not exhaustively enumerate all theories of competitive harm that may arise from non-horizontal mergers. The fact that a form of competitive risk, particularly in digital markets, is not expressly described in existing guidelines does not prevent its assessment under EU merger control rules.
The Court thus accepted that a theory of harm based on using an acquisition in a complementary market to reinforce an existing dominant position can be examined under the EU Merger Regulation.
Counterfactual Analysis and the Transaction’s Competitive Effects
Booking also argued that the Commission had incorrectly assessed the counterfactual, namely the competitive conditions likely to exist if the transaction did not proceed. That argument relied on the parties’ pre-existing commercial cooperation.
In Booking’s view, because it could already offer flight reservations under its agreements with Etraveli, the incremental effects of the acquisition had to be assessed against that existing relationship.
The General Court considered the dispute concerning the counterfactual. The precise size of the transaction-related increase in Booking’s hotel online travel agency market share was not, however, decisive for the Commission’s overall theory of harm. The central concern extended beyond a short-term market share increment to the structural reinforcement of Booking’s customer acquisition capabilities and travel ecosystem.
The Significant Impediment to Effective Competition Test
A central aspect of the judgment concerns the application of the SIEC test under Article 2(3) of the EU Merger Regulation.
The General Court emphasised that strengthening a dominant position does not, in itself, automatically establish a significant impediment to effective competition. The Commission must also demonstrate why that strengthening is likely to have a significant adverse effect on effective competition.
In examining the economic evidence, the Court identified errors in the Commission’s calculations of the transaction-related increment in Booking’s hotel online travel agency market share. The increase could have amounted to only a few tenths of a percentage point.
The Court also found that it had not been sufficiently established that the transaction would cause hotels to allocate additional room inventory to Booking, end their commercial relationships with rival online travel agencies, or enable Booking to increase the commissions charged to hotels.
Nevertheless, those shortcomings did not invalidate the prohibition decision. The Court considered that, in a market characterised by strong network effects, substantial barriers to entry and expansion, and a marked disparity in scale between the dominant operator and its rivals, even a relatively modest market share increment may reinforce existing network effects.
Moreover, acquiring Etraveli would expand Booking’s activities in a significant customer acquisition channel that it did not yet dominate. This would consolidate a travel ecosystem that rival online travel agencies would find difficult to replicate.
A significant impediment to effective competition need not therefore arise solely from a direct and substantial reduction in existing competitive pressure. It may also arise where a transaction consolidates and perpetuates an already low level of competition and makes the dominant undertaking’s market position less contestable.
The Court further confirmed that the Commission may rely on qualitative evidence, including where quantitative evidence is limited, provided that the evidence is sufficiently cogent and consistent, takes account of the relevant circumstances, and supports the conclusions drawn.
Efficiencies and Proposed Commitments
Booking argued that combining travel services within a single platform would offer consumers greater convenience and generate efficiencies. The General Court nevertheless upheld the Commission’s assessment that the claimed efficiencies had not been shown to be sufficient to offset the transaction’s anticipated adverse effects on competition.
During the administrative procedure, Booking also proposed commitments to address the Commission’s concerns. These included a choice screen displaying offers from competing hotel online travel agencies to customers who had booked flights.
The Commission considered the proposed remedy insufficient. In particular, the choice screen would cover only a limited share of cross-selling opportunities; algorithms operated by Booking-controlled KAYAK would continue to influence the selection and ranking of offers; and effective monitoring would be difficult.
The Commission also found that Booking’s revised commitments did not adequately remedy those deficiencies and consequently prohibited the transaction.
Legal Significance and Conclusion
The Booking/Etraveli judgment demonstrates that the competitive effects of digital platform mergers cannot be assessed solely by examining whether the parties compete in the same market or by measuring the immediate post-transaction increase in market share.
An acquisition in a complementary market may increase a dominant undertaking’s ability to acquire customers, reinforce existing network effects, and restrict rivals’ opportunities to enter or expand. Such structural effects are particularly relevant in digital markets where ecosystem advantages shape the sustainability of competition.
At the same time, the General Court’s reasoning does not imply that every acquisition by a dominant undertaking in a complementary market is anticompetitive. Strengthening dominance and significantly impeding effective competition remain distinct elements of the legal assessment. The Commission must substantiate the connection between them by reference to the specific market conditions and sufficiently persuasive evidence.
The judgment of 9 September 2026 therefore confirms that ecosystem-based theories of harm may be applied to digital platform mergers, while underscoring the need to establish their significance under the SIEC test.
Sources
1. General Court of the European Union, Judgment of 9 September 2026, Booking Holdings v Commission, Case T-1139/23, ECLI:EU:T:2026:535. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62023TJ1139
2. European Commission, Decision of 25 September 2023, Case M.10615, Booking Holdings / Etraveli Group, C(2023) 6376 final. https://ec.europa.eu/competition/mergers/cases1/202451/M_10615_10430872_121034_7.pdf
3. Court of Justice of the European Union, Press Release No 125/26, 9 September 2026. https://curia.europa.eu/site/upload/docs/application/pdf/2026-09/cp260125en.pdf
4. European Commission, Press Release IP/23/4573, 25 September 2023. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4573
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