Reverse leveraging in merger control: General Court upholds Booking/Etraveli prohibition

On 9 September 2026, the EU General Court (GC) dismissed Booking Holdings' action against the European Commission's (EC) prohibition of its proposed acquisition of the Etraveli Group (Booking/Etraveli, T-1139/23) in its entirety. The judgment is the first judicial confirmation of a "reverse leveraging" theory of harm and places it firmly within the family of conglomerate theories of harm. For dominant platforms acquiring businesses in complementary markets, the message is clear: even a small market share increment may not provide a safe harbour.

Key Takeaways

• Prohibition upheld: The GC confirmed the EC's prohibition of Booking/Etraveli in full.
• Reverse leveraging judicially recognised for the first time: The EC may rely on a non-dominant position as a lever to strengthen an existing dominant position (para. 87 et seq.).
• Entrenching weak competition may be sufficient: The consolidation and perpetuation of an already low level of competition may amount to a significant impediment to effective competition (SIEC) (para. 467-473).
• A small market share increment is not necessarily decisive: Even a potentially minimal increment does not preclude a finding of a SIEC (para. 465, 467-473).
• Efficiencies must generally benefit consumers in the affected market: Cross-market benefits may be considered where the consumer groups are substantially the same (para. 520-524).

Background

Booking agreed to acquire the Swedish Etraveli Group, a provider of flight intermediation services whose brands include Gotogate and Mytrip. The transaction did not have a Community dimension, but it could be reviewed under the merger control laws of Germany, Austria and Cyprus. Following a reasoned submission of 14 February 2022 by the parties under Article 4(5) of the EU Merger Regulation (EUMR), the case was referred to the EC in March 2022 and notified on 10 October 2022.

The prohibition decision

By decision of 25 September 2023, the EC prohibited the transaction. It based its decision on a "reverse leveraging" theory of harm. According to the EC, the deal would have allowed Booking to cross-sell hotel accommodation to flight customers.

In this way, Booking would use the position acquired through the transaction on the market for flight online travel agencies (OTAs), where it was not dominant, to strengthen its dominant position on the market for hotel OTAs. The EC found that Booking held a market share of around 60-70% on the hotel OTA market.

Booking's challenge

Booking brought an action for annulment before the GC. It argued, among other things, that the EC had departed from its Non-Horizontal Merger Guidelines, which do not contain a reverse leveraging approach. Booking also claimed that the EC had relied on a flawed counterfactual and applied the wrong standard of proof for a SIEC.

Guidelines do not preclude novel theories of harm

The Court clarified that the Guidelines do not prevent the EC from taking new forms of competition concerns into account, particularly in digital markets. The GC endorsed the EC’s observation that "digital markets have certain specific characteristics and may therefore give rise to competition concerns which were not sufficiently taken into account when those guidelines were adopted" (para. 77). In the GC's view, "the Non-Horizontal Merger Guidelines do not preclude a theory of harm from being based on a reverse leveraging effect, given that the Commission did not already have experience of potential concerns regarding such an effect when those guidelines were adopted in 2008" (para. 87).

Reverse leveraging as a conglomerate theory of harm

The judgment classifies reverse leveraging as a conglomerate theory of harm. The GC noted that the EC's theory was "based largely on leveraging, which is typical of conglomerate mergers" (para. 74). The harm does not result from the loss of direct competition between the parties, but from the strengthening of a complementary activity that, in the specific circumstances, adversely affects competition on the main market (para. 72 et seq., 257). In the Court's words, "the strengthening of the complementary business may, in certain circumstances, adversely affect competition on the market for the main business, in particular where the undertaking concerned has a dominant position on that market" (para. 257).

The GC also held that "the concept of 'competition on the merits' does not play a similar role in the context of merger control" (para. 106). The implementation of a concentration cannot be regarded as a form of competition on the merits, and the EUMR "seeks to establish effective control of all concentrations in terms of their effects on the structure of competition in the European Union … without any assumption being made that the entity resulting from the concentration will engage in abusive behaviour" (para. 107).

Entrenchment of weak competition as the decisive factor

The GC found the EC’s calculation of the market share increment to be vitiated by several errors, so that it could not be ruled out that the increment amounted to only a few tenths of a per cent. What was decisive, however, was that the transaction would make Booking's dominant position even less contestable. Given strong network effects and the wide gap between Booking and its competitors, the EC was entitled to rely on the entrenchment of an already low level of competition (para. 465, 470-471). The EC may establish a SIEC based on the consolidation and perpetuation of an already low level of competition, provided that the evidence demonstrates that the resulting impediment is significant (para. 467-473).

A further relevant factor was Booking's expected growth in flights, one of the few customer acquisition channels it did not yet dominate. According to the GC, this would have created a travel ecosystem that rivals would have found difficult to replicate (para. 471).

Efficiencies must generally benefit consumers in the affected market

The GC held that the EC had rightly rejected the efficiency gains put forward by Booking. The harm to hotels and hotel customers could not be offset by benefits for flight customers, since efficiencies must benefit consumers in those relevant markets in which competition concerns would otherwise be likely to arise. Benefits arising in another market may nevertheless be considered where the consumers affected by the restriction and those benefiting from the efficiencies are substantially the same. In the present case, however, the GC found that hotel customers and flight customers were not substantially the same consumer group, so that no cross-market offset was possible (para. 520-524).

Outlook

Why care? The judgment primarily affects acquirers that are market leaders in a platform market with strong network effects and that acquire a customer acquisition channel. For this category of cases, the risk of an in-depth review and of prohibition is materially elevated, because a small market share increment will not necessarily preclude intervention. The entrenchment of an already low level of competition may establish a SIEC, and the EC may rely on qualitative considerations (para. 456 et seq., 467-473).

What to do? In M&A practice, this theory of harm should be taken into account for conglomerate transactions as early as deal preparation. Market shares alone are no longer a sufficient screen.

Parties should ask in particular:

• Which position is being leveraged?
• Which customer acquisition channel may become more difficult for rivals to access?

Internal strategy and integration documents should be reviewed early, since the EC relied heavily on Booking's "connected trip" strategy (para. 379). Finally, efficiencies must generally benefit consumers in the affected market and be substantiated during the administrative procedure. Benefits arising in another market may be considered only in limited circumstances, including where the affected and benefiting consumer groups are substantially the same (para. 479, 520-524).