DOJ Mulling Antitrust Lawsuit to Halt Google ITA Bid

The DOJ is reportedly drafting a lawsuit to block Google's $700 million bid for ITA Software. This is good news for the group, which wants the deal nixed.

Google's $700 million acquisition of ITA Software may be halted by the U.S. Justice Department, which is reportedly preparing for a possible antitrust lawsuit to put the kibosh on the deal.

ITA's software helps airlines, search engines and online travel companies organize flight information, including flight times, availability and prices.

Sources familiar with the matter told Bloomberg that the Justice Department has yet to decide whether to bless or block the deal, which would give Google access to data to improve its air travel and fare-search results.

The Wall Street Journal said the DOJ could decide whether to bless or block the deal this month or in February.

The search engine triggered preparation for the government's possible lawsuit last month by invoking a provision of federal law that forces the government to decide within 30 days whether to challenge the deal.

Such a move is common in the industry where companies fear regulatory scrutiny is not moving quickly enough. Google bid to buy ITA last July 1, and the DOJ filed a second request for information about the deal in August.

Any wheel-greasing for the deal was slowed in October, when Expedia, Sabre Holdings, Kayak, Farelogix and their associated brands formed the coalition to urge the DOJ to stop Google's acquisition of ITA.

These companies, most of which pay ITA to use its data for their own travel-search services, fear that if Google gets ITA, it will become a travel-search powerhouse that will cut off their access to the valuable ITA data, or jack up fees to license the data.

Google has promised to honor all existing agreements and continue to work with companies if the deal is consummated.

When asked about the DOJ's lawsuit preparation, a Google spokesperson said: "While we continue to cooperate with the Justice Departments review, we are ultimately confident that this acquisition will increase competition," a Google spokesperson told eWEEK.

Tom Barnett, counsel to member Expedia, told eWEEK:

"We respect that the Department of Justice is working hard to conduct a thorough investigation. We remain very engaged in the process, and in our view, Google's proposed acquisition of ITA presents a serious threat of harm to competition and consumers. Combining Google's online search dominance with ITA's flight-search dominance would position Google to undermine competition across the online travel search industry."

Barnett and Google spokesman Adam Kovacevich debated the matter for CNN Dec. 29.

Google has been down this regulatory road before. In 2008, the DOJ blocked Google's offer to power search for Yahoo.

Google is also currently facing opposition abroad by the European Commission, which is investigating whether the company unfairly positions its own Web services on above search results of smaller rivals.