American Express GBT and CWT have laid out their arguments to the UK Competition and Markets Authority, claiming at least four TMCs would be strong global competitors.

In their joint response, which was made public last week, they argued that BCD, FCM, CTM, and Navan – along with Spotnana/Direct Travel, Blockskye/Kayak for Business/Gant Travel and more – 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 55-page submission, which has a significant amount of redacted text, was written in response to the CMA’s decision to move to a more in-depth Phase 2 investigation over Amex GBT’s plans to buy CWT.

The CMA believes the $570 million deal would lead to “worsened quality of service, higher prices and/or reduced innovation efforts for global multinational business travel customers, as a result of combining the current largest and third-largest company operating in this market”.

But the submission from Amex GBT and CWT claims the CMA was wrong to focus on a separate market for global multinational customers and SMEs with global and complex needs, and that both could be effectively serviced by a wide array of competing TMCs.

It argues that the CMA had ignored evidence from various sources to show that the business travel market is highly fragmented and intensely competitive for customers of all sizes and needs.

It also says the CMA has misunderstood the way in which business travel customers procure business travel services and the way they create competitive tension between TMCs, and had not taken into account the “highly dynamic nature of the market, with customers increasingly demanding digital solutions, TMCs providing global coverage through tech solutions, travel partner networks, and business process outsourcing solutions”.

It points out that FCM, CTM, Navan, and Spotnana are growing significantly and in a section specifically about Spotnana, it says its recent tie-up with Direct Travel means it poses a threat to traditional TMCs.

It backs up this argument by referring to a comment by BCD CEO, Stephan Bars, who recently observed that the Direct Travel acquisition has transformed Spotnana from “a pure technology provider to a real competitor in our space.”

It also lists a number of other competitors who have won several global multinational accounts, such as TravelPerk which now handles the accounts of Fujifilm, Airbus, Red Bull, Farfetch and Revolut.

Amex GBT and CWT also accused the CMA of accepting “without question” arguments from certain suppliers that the merged entity could slow the development of NDC “which has no basis in fact”.

Some industry observers were surprised by the arguments put forward by Amex GBT and CWT.

Scott Gillespie at tClara Advisory Services said the response “does a weak job of countering the regulator’s concerns because it makes several significant assertions that I need help finding credible”.

“In reality, the likes of Navan, Spotnana, CTM and FCM are many years away from proving they can be top-tier providers of globally aligned services and technology,” he said.

“And, in reality, the SME and global accounts markets are structurally very different in pricing, services, account management and support, complexity, and susceptibility to local competition.

Gillespie said the merger would definitively affect the market for large global business travel services by shrinking the number of credible suppliers from three to two.

“The response points to the merger’s expected benefits, such as investing in technology to improve customer satisfaction. Well and good, but to pretend this merger will not substantially lessen competition in the large/global market segment strains credibility,” he added.

Another industry expert, who asked not to be named, said it was ironic that in order to make its argument, Amex GBT has been forced to acknowledge the strength of its rivals.

“It’s having to big up the likes of Spotnana and Navan, which I’m sure was painful,” he said.

The CEO of a UK TMC, who also asked not to be named, said the CMA should have focussed more on the damaging impact of the proposed deal on suppliers, rather than on global clients.

“That’s where Amex GBT would have an unfair advantage,” he said.

The CMA’s Phase 2 verdict is due to be published on January 26 2025.