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    DOJ, FTC Jockey to Review Google’s ITA Bid

    By
    Clint Boulton
    -
    July 6, 2010
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      Antitrust regulators for the Department of Justice and Federal Trade Commission are haggling over which agency gets to review Google’s bid to buy ITA Software.

      Google agreed 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, among others.

      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.

      Experts believe 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.

      Clint Boulton

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