ARTA Files Unfair Competition Complaints in U.S.A., Canada, and Europe Against New Airline Web Sites; Rep. Peter DeFazio - D-Ore. - Files Supporting Letter With U.S. Federal Trade Commission.

Business Editors & Travel/Transportation Writers

LEXINGTON, Ky.--(BUSINESS WIRE)--May 15, 2000

U.S. and international airlines will dominate online travel sales and force higher fares and fewer choices on consumers unless government agencies in the United States, Canada, and Europe take steps against the airlines' new jointly owned Web sites, according to the Association of Retail Travel Agents (ARTA).

The Association of Retail Travel Agents (ARTA) outlined this claim in formal complaints filed today with the U.S. Federal Trade Commission (FTC), the Competition Bureau in Canada, and the European Union Competition Commission against the "T-2" Internet site (backed by 27 global carriers) and the "Basilica" or "Me-Too" site (sponsored by 11 European carriers).

Rep. Peter DeFazio (D-Ore.) pledged to issue a letter to the FTC this week supporting the complaint.

"If Ford, General Motors, DaimlerChrysler, and Toyota launched a jointly owned Web site to sell cars, the anticompetitive harm to consumers would be obvious," ARTA Chairman Nancy Linares, CTC, said. "We're asking these governments to protect consumers against the same kind of threat from these new airline sites."

Among other issues, ARTA alleges that the sites will facilitate horizontal collusion among the airlines for price signaling and price fixing. "The U.S. government reached a settlement in the mid-1990s against major carriers for allegedly using electronic techniques to signal fare hikes," Linares said. "This is the same old story."

Also, ARTA predicts the sites will kill competition from online travel agencies and small start-up airlines, leading to even greater market concentrations. "The owners of these sites control more than three quarters of airline traffic in their respective markets," Linares said. "It's simply monopolistic for them to sell through one site.

"Thanks to the help of Congressman DeFazio and other supporters, we're confident that we can nip these anticompetitive, anticonsumer sites in the bud."

Founded in 1963, ARTA is the largest nonprofit trade association in North America that represents travel agents exclusively. It is headquartered in Lexington, Ky.