The Department of Justice and Federal Trade Commission are haggling over which agency gets to review Google's bid to buy ITA Software for $700 million, the New York Times said July 6. Should the FTC secure the review of Google's merger bid for ITA, it could make for some tension for Google after the agency failed to thwart Google's move to buy AdMob.
Antitrust regulators for the Department of Justice and Federal Trade
Commission are haggling over which agency gets to review Google's bid to buy
to acquire flight information software maker ITA
July 1 for $700 million in cash.
ITA's QPX software organizes flight times, availability and prices for
airlines such as Alitalia and US Airways, metasearch engines such as Kayak and
Microsoft Bing Travel, and online travel providers such as Orbitz and Hotwire,
Google wants ITA's technology to build new tools that make it easier for
users to search for flights, compare flight options and prices, and shuttle
users to a site to purchase tickets.
But it's ITA's data and ITA customers' access to it that are sparking
concern in the industry. Some believe Google could use its strength in search
to steer travel searchers toward its own offering or gouge ITA's existing
software licensees on pricing.
To wit, the New York Times stated
July 6 that a person knowledgeable about the
activities of the DOJ and FTC said the two agencies are deciding which one will
review Google's bid, which Google CEO Eric
Schmidt anticipates will face a "significant review."
The bargaining between the federal regulators is interesting. Both the DOJ
and the FTC are regularly investigating Google's practices.
The company commands 65 percent of the search market-more overseas-and is
spreading out horizontally across almost every niche on the Web imaginable,
even offering smartphones based on the Android software it created.
The DOJ, which the Times said tends to investigate air travel agreements,
has already opposed two of Google's Book Search proposals to organize the
world's books and make them searchable online.
Should the FTC secure the review of Google's merger bid for ITA, it could
make for some tension for Google.
The FTC was reportedly set to block Google's bid for mobile display ad
provider AdMob before finally blessing that $750 million deal
However, the review process exposed some glaring ignorance on the part of
the FTC's commissioners' knowledge of the mobile ad market, a nascent market
with many players and no superpowers.
The FTC spoke to several of Google's rivals, mobile ad providers and
independent experts, who eventually convinced the FTC that the deal would not
stifle competition in the mobile ad sector.
But in the process, the FTC ended up with egg on its face after some of the
parties it consulted blogged about how lacking the agency's officials were in
their expertise about an acquisition bid they had the power to void.
Google will consummate its bid for ITA because
it represents the search engine's expansion into a new search vertical and the
company has already promised to support ITA's existing customer agreements.
However, any blessing by the FTC or DOJ is likely to be served with mandates
that Google cannot freeze out rivals such as Bing, or overcharge it for the ITA
software Bing incorporates in its search engine.
Google's Schmidt said the company's plan is to honor all existing agreements
inked with ITA.