The U.S. Department of Justice (DOJ) has filed a lawsuit to prevent the proposed USD$570 million acquisition of CWT by American Express Global Business Travel (Amex GBT).
According to reports, the DOJ's Antitrust Division argues that the merger would significantly reduce competition among travel management companies (TMCs), particularly for multinational clients with substantial travel budgets.
Players and Dynamics
The DOJ has identified Amex GBT, CWT, and BCD Travel as the dominant players in the business travel management industry. Together, these companies control over 70% of the market for large enterprise travel, leaving smaller firms like unable to match their scale and capacity.
According to the DOJ, combining Amex GBT and CWT would disrupt this competitive balance, potentially leading to higher prices and fewer choices for multinational corporations.
Multinational companies, which often allocate more than $100 million annually for travel, rely on competitive bidding from TMCs to manage their global travel needs.
The DOJ contends that competition between Amex GBT and CWT has been particularly intense, benefiting large clients through better pricing and innovative services.
TravelWeekly reports the lawsuit highlights internal communications that suggest both companies and their investors were aware of the merger's potential impact on competition.
In response, Amex GBT has criticized the DOJ's stance, describing it as overly narrow and disconnected from the current realities of the business travel industry. The company argues the DOJ's assessment ignores the travel sector's post-pandemic transformation and the emergence of new competitors.
“Rather than account for how the business travel industry looks today, the DOJ's complaint takes a backward-looking view of the market,” Amex GBT said in a statement. The company insists the merger would benefit customers, suppliers, and employees by fostering innovation and enhancing customer choice.
Broader Implications for Antitrust Policy
The DOJ’s lawsuit reflects the Biden administration’s intensified scrutiny of corporate mergers, particularly in concentrated industries. The department has pursued multiple antitrust cases to prevent market consolidation that could harm competition. However, whether these efforts will continue under the Trump administration remains uncertain.
