DOJ Clears Google ITA Bid, with Conditions

 
 
By Clint Boulton  |  Posted 2011-04-09 Email Print this article Print
 
 
 
 
 
 
 

Google's $700 million bid for ITA Software is blessed by the DOJ but not without some concessions. Google must continue to make ITA available to customers such as Expedia, Kayak and Microsoft at reasonable terms.

The Department of Justice April 8 blessed Google's $700 million acquisition bid as long as the search engine agreed to conditions geared to foster fair competition in the online travel space.

Google must develop and license travel software to existing ITA customers at reasonable terms, create internal firewall procedures and continue software research and development to improve the product. For example, Google must hone and license ITA's InstaSearch product to travel Websites when its development is complete, according to the DOJ.

The idea is that airfare comparison and booking Websites such as Expedia, Kayak, Microsoft and others that use ITA's software will be able to continue to benefit from ITA's innovation and compete against any service Google may introduce.

Google told eWEEK it has agreed to the terms and is moving to close this acquisition as soon as possible.

Google July 1 last year offered to buy ITA, whose QPX software searches airlines' digital data feeds for airfares, schedules and availability.

Google's plan was to bid to augment its own travel search results beyond just a set of links. Most vendors in the online travel industry use ITA's QPX software, and they didn't take too kindly with the idea that Google would hold sway over the data they use as the lifeblood of their travel search endeavors.

Expedia, Kayak and others in October formed the FairSearch.org coalition to oppose Google's acquisition of ITA as being anticompetitive. These companies, which were later joined by Microsoft, argued that Google would cut off their access to the ITA data firehose.

Google vowed to honor ITA's existing contracts, which was one of the conditions imposed on it by the DOJ today.  

Google formally promised to extend ITA's existing customer contracts to 2016 and to let current and new customers license ITA's QPX software on "fair, reasonable and non-discriminatory terms" until 2016. Google will also make ITA's software available to other travel sites.

"We're confident that by combining ITA's expertise with Google's technology we'll be able to develop exciting new flight search tools for all our users," said Jeff Huber, Google senior vice president, of commerce and local in a blog post.

With ITA's QPX technology, Google expects that when a searcher types "flights to somewhere sunny for under $500 in May" into Google.com, the search engine will be able to return flight times, fares and a link to sites where consumers can buy tickets.

This is the kind of service that Microsoft's Bing Travel portal provides using ITA's QPX software, so in many ways Google is trying to get up to speed with its rivals in the travel search sector. Google is also free to launch its own travel Website under the deal, said a source familiar with the parameters of the DOJ deal.

The DOJ, which filed a civil antitrust suit to ensure that Google can resolve its competitive concerns, said it imposed its conditions because Google's original acquisition plans would have impeded competition among flight search Websites in the United States.

Ultimately, this would lead to reduced choice and less innovation for consumers, Joseph Wayland, deputy assistant attorney general of the DOJ's Antitrust Division, said in a statement.

The DOJ added that Google will also be required to provide mandatory arbitration of deals with customers and provide for a formal reporting mechanism for complainants who believe they are being wronged in business dealings.

"By putting in place strong, ongoing oversight and enforcement tools, the Department has ensured that consumers will continue to benefit from vibrant competition and innovation in travel search," claimed FairSearch.org in a statement.

 
 
 
 
 
 
 
 
 
 
 

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