Google's $700 million
acquisition bid for travel search software maker ITA Software passed muster
with the Justice Department April 8, which is a big win for the search engine.
Google will use ITA's flight
fare and scheduling software to improve travel search results on Google.com,
similar to the way Microsoft's Bing search engine does
on its Bing Travel portal.
However, the DOJ imposed
a number of conditions for Google to meet if it is to allow the deal to be
consummated.
Google must develop and
license travel software to existing ITA customers at reasonable terms,
create internal 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.
The idea is that airfare
comparison and booking Websites, such as Kayak, Hotwire, Microsoft and others
that use ITA's software, will be able to leverage ITA's latest technology to
compete against any service Google may introduce.
These terms have assuaged
the concerns of opponents such as FairSearch.org, which Expedia, Kayak and
others forged to make sure the DOJ scrutinizes the Google ITA.
Google gets the goods to
build better travel search tools. FairSearch.org gets the restrictions it
wished for. In the words of Charlie Sheen, both sides can cry
"winning!"
However, FairSearch.org
believes it may get more than it bargained for now that DOJ has had the
opportunity to scrutinize Google's search business.
FairSearch.org spokesman
Kayak Chief Marketing Officer Robert Birge and Thomas Barnett, who as a former
assistant attorney general led the DOJ's Antitrust Division from 2005 to 2008
and currently counsels Expedia, said the DOJ's documentation shows the agency has a continued interest in monitoring Google.
Barnett said the DOJ noted
that the proposed decree did not resolve issues related to "section
2" of the Sherman
Act, which prohibits single companies from undermining "the
competitive process and thereby enables a firm to acquire, credibly threaten to
acquire or maintain monopoly power."
{mospagebreak title=Barnett
and Birge Discuss the Google ITA Deal}
Barnett inferred that this
is the DOJ's way of keeping the decks clear for a further investigation and
enforcement action so that Google can't claim that the issue has been resolved.
Another issue Barnett noted
was unusual was that it ordered Google to report to the DOJ any complaints that
it receives related to complying with the DOJ's proposed decree for travel
search.
"That is not a standard
provision in a DOJ antitrust decree and it signals a continuing interest and a
desire to set up a mechanism that will help channel information to the
department on an ongoing basis," Barnett said.
Birge added that the DOJ's
proposed consent decree comprised 22 pages of stringent and fairly
unprecedented restrictions, over 9 months since Google revealed its bid last
July 1. These restrictions included major points that Google protested,
including granting licensees access to ITA technology in a normal business
context.
"There are several
material points that they did not want to do and the government told them that
if you do not do these things, this deal is in violation of antitrust,"
Birge said.
All of this leads Barnett
and Birge to conclude that the DOJ is taking a harder look at Google, certainly
in the travel search sector, and possibly in the broader search sphere.
Moreover, FairSearch.org
isn't going away even though it has achieved what it set out to do in calling
the DOJ's attention to the competitive threats of Google's ITA bid.
Barnett said the FairSearch.org
member companies realized over the course of their own investigation into
Google's travel search practices that some of the antitrust concerns were not
unique to the ITA deal.
For example, he pointed to
Google's ability to use Google.com as a platform to funnel hits to its own Web
services over those of competing search services. Barnett said ITA flight
search could be combined with Google.com to dominate the online travel search
space.
This echoes the complaints
vertical search engines and advertisers are currently making against Google in Europe
and Texas.
Search Engine Land points
out the call to regulate Google's results pages is unrealistic because it
will impair consumer choice.
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