Expedia,a third-party online travel-booking company proposed an acquisition of Orbitz,another third-party online travel-booking company.Several hotel companies and consumer advocates objected on the grounds that the result would be that the merged company would control 75% of the third-party online booking business.What standard will the Justice Department apply in determining whether to approve the merger?

Question

Expedia,a third-party online travel-booking company proposed an acquisition of Orbitz,another third-party online travel-booking company.Several hotel companies and consumer advocates objected on the grounds that the result would be that the merged company would control 75% of the third-party online booking business.What standard will the Justice Department apply in determining whether to approve the merger​?

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The Justice Department will apply the standard of determining whether the merger will affect competition. This is because the proposed merger would result in a high market concentration, which could potentially limit competitive choices for consumers and harm competition in the industry. The opinions of the hotels and consumer advocates may be taken into consideration, but the determining factor will be the impact on competition. The quality of service at Orbitz and the fairness of the merger terms are not the main considerations for the Justice Department.

Expedia,a Third-Party Online Travel-Booking Company Proposed an Acquisition of Orbitz,another