American Express Global Business Travel and CWT have raised a series of objections to the UK Competition and Markets Authority’s decision to escalate
its investigation into their proposed $570 million merger.

In a joint response submitted on 23 August but made public
today as part of the ongoing investigation, the TMCs refute multiple findings
of the CMA’s Phase 1 investigation, arguing among other points that the authority’s
concerns over a substantial lessening of competition (SLC) are unfounded.

The TMCs also claim the CMA overstated the TMCs’ combined
marketshare, overplayed the barriers to entry of new entrants to the market,
and “accepted without question certain suppliers’ arguments that GBT could slow
the development of NDC, which has no basis in fact”.

The 55-page written response, with numerous redacted sections, also argued that the TMCs are not
currently each other’s closest competitor – instead pointing to BCD Travel – and endorsed the ability of several rivals to compete for global multinational (GMN) customers.

“The market for business travel services is highly
competitive with a large number of strong competitors for customers of all
sizes,” said the TMCs. The combined entity would “continue to face strong competition
from at least four global competitors,” the statement said, pointing to BCD
Travel, FCM, CTM and Navan, who have “the credibility and track record to fight
for and win contracts to serve customers of all sizes with the most complex
needs, as well as those with simpler requirements.”

The statement added: “The decision [to escalate the
investigation] did not take into account the highly dynamic nature of the
market,” with “customers increasingly demanding digital solutions” and “TMCs
providing global coverage through tech solutions, travel partner networks, and
business process outsourcing solutions.”

The TMCs also contended that there is no separate market for
global multinationals and SMEs with complex needs, arguing that companies of
all sizes have “a continuum of requirements that all TMCs are able to serve.”

According to the TMCs, the CMA was also over-reliant
on information published in BTN’s Corporate Travel 100 and Europe’s Leading TMCs reports. “The decision
relied on BTN’s 2023 Corporate Travel 100 survey to decide that “only few
TMCs” can cater to GMN needs. Yet, the survey’s results are heavily US-centric
and relate only to air-volume… Consequently, the survey is not representative
of the global geographic market used in the decision.”

The statement concluded: “The decision’s competitive
assessment and conclusions were incorrect in numerous respects. The transaction
will not result in an SLC in the supply
of BTA (business travel agency) services to GMN customers
or any other customers.”

It continued: “The evidence shows that business
travel is a highly competitive, fragmented, and dynamic market, that the parties
are not each other’s closest competitors … and that the merged entity will be
constrained by more than five strong competitors, as well as its powerful and
sophisticated customers, post-transaction.”

The CMA is due to report its Phase 2 verdict by 26 January 2025 and the acquisition will also have to secure regulatory clearance in the US. Following confirmation of the Phase 2 probe in August, Amex GBT said it expects to complete the acquisition of CWT in the first quarter of 2025. When first announced in March, the TMC said it hoped to close the deal in the second half of 2024.