Recent DOJ Investigations – Protection or Innovation Blocker?

Europeans seemingly are the only ones who have recognized an oligopoly of the GDS’s that we should not continue to strengthen.

Only further expansion of regulations and continuous monitoring of the GDS’s can prohibit their sway over users and technology providers such as ourselves.

Although I do not know exactly what Europe’s Competition Commission does on a day to day basis, but at least they know when not to get involved.

This is unlike the DOT and DOJ that seem to have nothing better to do than object an already settled merger (AA / US Air) or to punish codeshare short comings that leave us with no room for error although we are mainly relying on data from the GDS here as well.
And whatever happened to the much anticipated antitrust lawsuit the DOJ was investigating in regards to restrictive GDS developer agreements such as Sabre / Farelogix? I am not talking about the commercial lawsuit between AA and Sabre that ended in some ½ billion changing pockets while nothing else changed. What I am talking about is, why can’t everybody use GDS data and increase its value to the needs of the traveler by adding additional content, without the need of an expensive developer agreement or authorizations for each and every little change? Openness is the perfect breeding ground for innovation. Even if this hasn’t really raised a storm in the end- At least taxpayers among us know now what we fund.

Flexible and holistic solutions

What has changed though is the perspective with which agencies and travel management companies look at technology. Where previously legacy thinking prevailed, a lot of buyers now clearly have an active need and are making better technology a strategic priority for their business. Even though technology might challenge old business models, it has the ability to provide companies with the much needed competitive edge. Therefore many third party technology providers have simply shifted from the GDS (or bypass) focus to providing travel agencies and TMC’s with exactly what they need. At PASS our focal point is to keep in mind our clients requirements for more flexible and holistic solutions. That may entail different pricing models, GDS integration for the sales part, additional content through aggregators or low-cost carriers; our product might be the heart of the client application or just a piece of middleware. Some buyers even decide they are better off doing it themselves, developing a solution in-house – nearly everything is possible.

So if the industry is finally opening up and shifting away from relying on the oligopolistic GDS model and its legacy systems, why is the government putting all progress in the hands of 3 mega companies awarding them with a ‘master contract’ worth an estimated $75 million? Moreover, doesn’t a 15 year contract term sound a bit long considering the shelf-life of technology products these days?

Then again, it might just be a bit much to expect, as the public sector isn’t exactly known to be a pioneer of innovation, still tackling issues like clean energy and emissions control.

Image by Andrey Popov

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