Google ITA Scrutiny Gives DOJ More Antitrust Fodder

 
 
By Clint Boulton  |  Posted 2011-04-11
 
 
 

Google ITA Scrutiny Gives DOJ More Antitrust Fodder


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."

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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