BUSINESSWEEK ONLINE : JUNE 19, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY Why This New E-Biz Is Raising Trustbusters' Hackles It's a tiny company, even by e-commerce standards. But the five-month-old T2--with eight employees, no sales, and a temporary name--is causing a big stir in Washington, D.C. A new entrant into the competitive online travel business, T2 has already become the target of a Justice Dept. antitrust inquiry, and its chief technology officer is being hauled in to testify before Congress. The reason for this scrutiny? T2 is owned by five major U.S. airlines: United (UAL), Delta (DAL), American (AMR), Continental (CAL), and Northwest ( NWAC). Since the industry has a history of collusion and other anti-competitive behavior, this cooperation on a Web site scares lots of people. Critics say the site could be used to raise prices collectively, steer flyers to the five carriers, or snub out Web rivals Expedia Inc. (EXPE) and Travelocity.com Inc (TVLY). ''It's the latest move in their long campaign to gain control over the customer,'' frets Houston travel agent Joseph L. Galloway. The site's backers retort that the critics are just afraid of losing their share of a massive industry. ''We're disrupting a whole bunch of existing channels that have been extremely profitable for decades,'' says T2 Chief Technology Officer Alex Zoghlin. ''It causes a lot of people to panic.'' But Justice does have real concerns. T2 execs plan to offer heavily discounted last-minute fares from the five carriers, which wouldn't be available on competitors' Web sites. As a result, T2 could become a virtual monopoly, slowing innovation. That's why Travelocity is asking the trustbusters to bar T2 from selling anything not available elsewhere. ''Fair access to fare information,'' is what Justice should demand of airlines, says Travelocity Vice-President Bruce Charendoff. If that happens, T2 would be forced to sink or swim based on its ability to compete, innovate--and help travelers find the best fares. By Dan Carney in Washington _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS How Many Airlines Will Stay Aloft? TABLE: On Some Important Routes, United Would Rule Why This New E-Biz Is Raising Trustbusters' Hackles INTERACT E-Mail to Business Week Online

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