Justice Dept. approves Google deal to buy travel search software firm
The Justice Department approved a controversial deal by Google on Friday that would allow the firm to acquire a powerful travel search software firm, though with some strings attached.
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Video: April 8 (Bloomberg) -- Google Inc. has agreed with the U.S. Justice Department to provide compulsory licensing, establish firewalls on client data and submit to government monitoring of travel search and services as a condition of its purchase of ITA Software Inc., according to two people familiar with the matter.
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Video: April 7 (Bloomberg) -- Ken Sena, an analyst at Evercore Partners Inc., talks about the outlook for Google under chief executive Larry Page.
“The acquisition, as originally proposed, would have substantially lessened competition among providers of comparative flight search websites in the United States, resulting in reduced choice and less innovation for consumers,” the Justice Department said in a statement.
To resolve these concerns, government officials want Google to continue licensing ITA’s software to airfare Web sites that use the company’s technology, a group that includes Orbitz, Microsoft’s Bing and Kayak. Google will also have to add firewalls to prevent the company from accessing inside information from ITA’s customers, which Google could use to outdo them as it launches its own travel search engine.
In addition, Google must promise to continue developing ITA’s technology at a level similar to what the software firm has pursued in the past.
“The Department of Justice’s proposed remedy promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software,” said Joseph Wayland, deputy assistant attorney general of the Justice Department’s antitrust division, in a statement. “The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”
Google announced last year it wanted to pay $700 million to acquire ITA, a firm that created the technology powering most online flight searches.
“We’re excited that the U.S. Department of Justice today approved our acquisition,” wrote Jeff Huber, a senior vice president at Google, in an official company blog post. “It’s important to us that ITA continue with business as usual, providing great service to its business partners.”
Opponents of the deal worried that if Google acquired ITA, it would have immense power over the online flight searches. Google says it wants to acquire ITA in order to build a superior flight search engine.
But competitors feared that Google could cut off their access to ITA’s technology, or more subtly, post its own flight search results higher because it controls the algorithm for the world’s most popular search engine.
The ITA decision comes as Google approaches a pivotal point in its relations with Washington. Last week the Federal Trade Commission said it was imposing regular audits on the company for violating privacy agreements with users when it released its Buzz social-networking product. There also has been growing interest at the Justice Department and the FTC to examine the company’s power in the search market, though neither agency has launched an official inquiry.
Google has repeatedly said that users are free to use other search engines but that they stick with Google because the company offers better products.
A spokesperson for Google did not return a request for comment.
yangjl@washpost.com
