Google / ITA travel search deal approved in US

Powered by article titled “Google wins approval for ITA travel search deal – but antitrust case looms” was written by Jemima Kiss, for on Monday 11th April 2011 12.36 UTC

Google has been given approval for its takeover of travel search and recommendation service ITA by the US Justice Department, albeit with some fairly heavy strings attached that are designed to prevent the search giant taking advantage of its market position – and lining up a likely broader antitrust investigation.

Nine months after Google announced its intended acquisition of ITA, the settlement reached with the Justice Department requires Google to maintain ITA’s software licence with rival flight search sites for five years, as well as its research and development funding. Google will also need to stablish internal firewalls to protect information about ITA’s customers and the Justice Department will be monitoring all of these requirements.

Monopoly in the Park
Photo by HarshLight on Flickr. Some rights reserved

Rival travel search firms – including Expedia, TripAdvisor and Kayak (which all some of whom use ITA’s software) – had lobbied hard in opposition to the 0m takeover. A coalition that also included consolidated airfare service Sabre Holdings and called itself seemed satisfied with the restrictions placed on Google, saying in a statement that the Justice Department’s settlement would ensure “that consumers will continue to benefit from vibrant competition and innovation in travel search”.

Google had initially said it did not intend to launch a ticket sales service, though the Justice Department’s restrictions would not stop that happening. In an official blog post, Google’s senior vice president of commerce and local, Jeff Huber, said that Google would be able to combine its search technology with ITA’s tools to “develop exciting new flight search tools”.

“How cool would it be if you could type ‘flights to somewhere sunny for under 0 in May’ into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily?” he wrote.

Many consumers might welcome simplified, quicker, more accessible flight search and booking tools in an existing market that is still a messy and time-consuming experience, with infuriating inconsistencies and little integration between sites. Can Google help fix that?

Google’s brief blog post on the result makes little comment on the requirement that Google effectively fund R&D for its rivals in order that they still stand a chance of competing in a market where, as the vastly dominant search service, Google would be in a position to give preferential listings to results from its own companies. That wouldn’t benefit the consumer unless those results were always the cheapest or best value, hence the Justice Department’s restrictions.

While the overall decision will be welcome by Google, it also means more likelihood of increases scrutiny by antitrust regulators give Google’s dominance of the search market. US regulators are moving towards a broader investigation of Google’s search dominance, though it has not been established whether the Department of Justice of Federal Trade Commission would conduct any investigation, according to Reuters.

Adding to the growing momentum behind a likely investigation was a weighty report from the American Antitrust Institute in February, which framed the case as “raising broader questions of competition policy concerning Google’s rapid growth as a one-of-a-kind firm”.

Announcing the ITA deal approval, Senator Herb Kohl, chairman of the Judiciary Committee’s antitrust subcommittee, acknowledged: “We continue to scrutinise broader questions about the fairness of Google’s search engine, and whether it preferences its own products and services to the detriment of competitors.” © Guardian News & Media Limited 2010

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