olÂ·iÂ·gopÂ·oÂ·ly (l-gp-l, l-) n., pl. olÂ·iÂ·gopÂ·oÂ·lies. A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.
[oligo- + (mono)poly.] oliÂ·gopoÂ·listic (-lstk) adj.
Now that dreams of dot com glory are waned, the Old World Oligopolies are quietly reasserting their dominance over old territory. Digital Music is quickly consolidating under the banner of publishing (via acquisition or lawsuit), online automobile dealers are dying weekly returning users to car lots, and airline travel booking is quickly being reigned in by the airlines.
Look closely at ORBITZ. It’s an atom bomb for companies like Priceline and Expedia as the airlines and SABRE attempt to squeeze down or eliminate the commissions that must be paid to the former for taking customer reservations.
Monday April 16 3:40 PM ET Airline-Owned Web Site Approved WASHINGTON (AP) – Five major airlines have won Transportation Department approval to go ahead with their own Internet travel site.
Transportation officials said there was no evidence that Orbitz would reduce competition or violate antitrust laws. The site – owned by American, Continental, Delta, Northwest and United – is still being reviewed by the Justice Department, but Orbitz President Jeff Katz said he didn’t expect any problems now that DOT has given the venture the green light.
“In the end, consumers are the real winners when there’s more competition,” Katz said Monday. “Our low-cost structure will ensure there is better information and lower fares in the marketplace.”
Other online travel agencies questioned whether Orbitz would have an advantage over its competitors, such as being able to offer lower fares on its five airlines than anyone else.
The Interactive Travel Services Association, which represents such competing Web sites as Travelocity.com and Lowestfare.com, said it was disappointed with the DOT decision.
ITSA Executive Director Antonella Pianalto said the group wanted DOT or the Department of Justice to “correct the anticompetitive flaws in Orbitz’s exclusive access to discounted Internet fares before its launch.”
But Transportation Department officials said Orbitz has not required airlines to give it exclusive rights to certain fares, nor stopped the airlines from supplying similar fares to other travel Web sites.
DOT officials said they would review Orbitz once it begins its full operation in June, and will respond if they feel the site hinders competition. In addition, Orbitz was told to provide a progress report after six months. –