The U.S. Department of Justice’s (DOJ) attempt to block American Express Global Business Travel’s (Amex GBT) $570 million acquisition of rival CWT has sparked debate among travel lawyers and industry stakeholders. The DOJ claims the merger could harm competition among large travel management companies (TMCs), but legal experts argue that this case lacks substantial evidence and misrepresents the industry’s competitive dynamics.
In its lawsuit, the DOJ highlights that the merger would reduce competition within the global and multinational TMC market. It suggests that eliminating a top player like CWT would leave corporations with fewer choices, potentially leading to higher prices and less innovation. The agency views TMC operations as divided into two segments: large global/multinational corporations and small-to-medium enterprises (SMEs), focusing its concern on the former group.
However, travel attorney and columnist Mark Pestronk finds this segmentation flawed. According to Pestronk, “In corporate travel, there are no distinct markets. The needs of large customers are similar to those of small-to-medium enterprises.” He further points out that TMCs cater to clients of all sizes, making the DOJ’s market division an artificial construct. If the top players Amex GBT, BCD Travel, and CWT ceased to exist, smaller TMCs could step in to meet corporate demands.
Amex GBT’s response echoes this sentiment, stating the DOJ’s complaint takes a “narrow and misguided view” of competition. They argue that the DOJ’s focus on U.S.-headquartered multinational corporations, representing less than 3% of the global business travel market, disregards the broader competitive landscape.
Another travel attorney, Jeffrey Ment, shares skepticism about the DOJ’s arguments. “The DOJ’s usual antitrust cases aim to protect individual consumers from higher prices or reduced services,” Ment explains. “Here, the focus is on safeguarding options for large corporations, which could manage travel independently if needed.” He adds that most corporations prefer TMCs for their negotiated rates and industry connections, but these benefits don’t hinge solely on the existence of a few dominant players.
Ment notes that the DOJ’s recent actions such as challenges to American Airlines and JetBlue’s Northeast Alliance and the Spirit Airlines-JetBlue merger focused on consumer harm. The Amex GBT-CWT case, by contrast, centers on large companies’ procurement options, a less relatable concern for regulators and the public.
The proposed merger has also attracted scrutiny in the U.K., where the Competition and Markets Authority (CMA) extended its review period until March 9, 2025. In a preliminary report, the CMA raised concerns about diminished competition for business travel clients with high spending requirements exceeding $25 million annually.
Despite these concerns, industry experts argue that competition remains robust. Smaller TMCs and emerging players have the capacity to serve high-spending clients, undermining the argument that the merger would create a monopoly or significantly limit choices.
The DOJ’s case against the Amex GBT-CWT merger underscores differing interpretations of competition in the travel management sector. While the DOJ frames the acquisition as a threat to corporate options, travel lawyers emphasize that the industry’s dynamics offer resilience and adaptability.
For now, the case remains unresolved, with both the DOJ and CMA continuing their investigations. However, as legal experts dissect the DOJ’s rationale, the consensus appears to favor the merger’s proponents, who argue that the acquisition reflects the natural evolution of a competitive, globalized industry. Whether these arguments will sway regulators remains to be seen, but the case serves as a fascinating test of antitrust principles in the modern travel economy.
