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What to do about Orbitz?

The jury’s out on Net markets and collusion. 02/03/25 ReleVents hed: What to do about Orbitz? dek: The jury¹s out on Net markets and collusion. By James Mathewson

My wife Beth and I are frugal consumers: We try not to buy more than we can afford or manage. One area of our lifestyle that could be deemed extravagant is travel. We travel a little more than we can afford and just as much as my vacation time will allow, which is much less than we would like. We have tried every Web venue for reserving tickets, rental cars, accommodations, etc., and we’re not very fond of any of them. We like the deals we can sometimes get, but we’ve had some of the worst service we have experienced in any venue on some of them. The next time we need to book a trip, we may resort to travel agents–you pay a little more, but you get the best service and the most control over your itinerary.

Some sites are just awful, and one trial was enough to dictate that we will never use them again. and Travelocity fit this mold. The main problem with these sites is usability. Microsoft’s stock forms are not at all flexible on little details like whether we need to punctuate abbreviations or not (you can’t make the pages work if you have periods in any field). You’d better get it right the first time, because it’s nearly impossible to fix a mistake or return to an earlier page in a several-page form. And the sites force us to scroll forever to read all the draconian fine print. When we’ve called customer support, they’ve treated us like idiots, not at all what we would expect from a travel agent. In our opinion, the money we save on these sites simply is not worth the hassle.

Other sites are just OK. I would put Orbitz in this category. The interface is much more elegant than Microsoft’s partner sites, and you do have more choice than other sites. But it has a couple of annoying down sides. First, I don’t like to patronize companies that use pervasive pop-under advertising. I’ve seen more Orbitz pop-unders than I have for any other company. More important, when I use the site, I have the sneaking suspicion that fares offered are the result of price fixing. In a sense they are: The major airlines own and operate the site jointly and share information on supply and demand to fix the rates on the fares offered. There are two sides to this problem. First, it’s tough to compete against this set-up, so a monopoly in travel sites is a distinct possibility once Orbitz becomes better established. Second, travel agents and others claim that they are excluded from offering the lowest fares, which damages their business and ultimately hurts consumers.

We ran a story on Thursday in which the Interactive Travel Services Association (ITSA) called for a U.S. Department of Transportation investigation into the alleged collusion. ITSA claims that already after just six months of operation, Orbitz is stifling competition. In another story on Thursday, Orbitz General Counsel Gary Doernhoefer accused the two dominant carriers–Expedia and Travelocity–of fixing prices and excluding other services, including Orbitz, from lower fares.

It’s shaping up to be a pitched battle between Orbitz and the rest of the industry that will answer central e-business questions: Are Net market partnerships between competitors legal, ethical, fair, and good for consumers? Net markets that sell other goods and services, such as Covisant, faced similar legal battles and survived. Right now Orbitz is giving the dominant sites some strong competition. This is good for consumers, as evidenced by my own experiences. But we have seen how monopolies can sneak up on people, and it is best to answer the antitrust question before it’s too late to reintroduce competition. Hopefully the sites won’t spend all their resources on legal fees at the expense of much-needed upgrades to their offerings. Until they improve their interfaces and customer service, we’ll stick with local travel agents.

James Mathewson is editor of ComputerUser magazine and

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