Opening of Online Ticket Site Orbitz Troubles CCIA

BY CCIA Staff
June 6, 2001

Washington, DC- The Computer & Communications Industry Association (CCIA) expressed concern with today’s opening of the travel website Orbitz. Orbitz is an Internet joint venture among the nation’s five largest airlines that has attracted widespread scrutiny for anticompetitive behavior. Despite an ongoing review by 23 state attorneys general, the Department of Justice, and continued monitoring by the Department of Transportation, the website has nonetheless decided to proceed with its launch, with questionable anticompetitive activity at the core of its function.

Ed Black, CCIA President & CEO released the following statement:

“This website raises serious anticompetitive concerns. When competitors get together and begin to determine the means by which they will conduct business, obvious questions of collusion arise. No industry can be allowed to have its competitors come together in a single space and frustrate the workings of the free market, but this is particularly troublesome in the realm of e-commerce, which has empowered consumers like no other phenomenon. When information is withheld to impede competition, the consumer is harmed with increased prices and poorer service.

“To determine the intentions of the airlines, look at where the incentives lie. The airlines that participate have no incentive to reduce fares so long as they control all aspects of the travel experience, from bookings to flight. On the other hand, independent third party distributors have to deliver better service and give customers the best deals possible so they will come back and buy again. The independent distributors are inherently aligned with consumers, and the airlines are not.

“The end result with Orbitz is that all consumers will pay higher prices and have fewer options. It is an anticompetitive travel distribution cartel designed to choke off the flow of critical fare information to other distribution outlets. If this model is allowed to take hold, the incredible promise of electronic commerce for travel consumers will be irreparably harmed.”

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