The relevant merger-control notification submitted to the European Commission was withdrawn on 5th June 2001. The Commission had launched an in-depth investigation on 8th May. In particular, it was the combination of TUI's and Neckermann's package-holiday products and T-Online's internet services that gave rise to the Commission’s concerns that the joint venture would have a dominant position in the market.
T-Online, a subsidiary of Deutsche Telekom, is Germany's leading supplier of internet-access services and operates one of the country's most popular internet portals. TUI, a subsidiary of Preussag AG, and Neckermann, jointly owned by Lufthansa AG and KarstadtQuelle AG, are vertically integrated travel companies offering tourism services which they organise themselves or supply as intermediaries (flights, package holidays, last-minute deals and hotel rooms, etc).
The new company was conceived as an online supplier of leisure-travel services (in particular package holidays, last-minute deals, flights, etc.)
The Commission's examination of the market concentrated primarily on the risk that the new company might dominate the online travel market and the possibility of market foreclosure for other on-line suppliers.
The joint venture could have had privileged access, via its parent companies TUI and Neckermann, Germany's leading tour operators, to package-holiday products and, via T-Online, to a very large potential customer base.
Other on-line travel companies are heavily dependent on the products supplied by TUI and Neckermann and their brands. They feared that the new company could have dominated the on-line segment and that they would be discriminated against in the award of agency contracts.
In addition, the Commission examined whether the joint venture might also lead to the creation or strengthening of a dominant position on the overall travel-agency market (comprising online and traditional travel agents).
Now that the project has been withdrawn, the Commission will terminate its investigations. T-Online has indicated that it is now planning to develop its own on-line travel agency - a firm over which it has sole control and in which TUI and Neckermann have a smaller stake. This would not require notification under EU merger-control legislation.