Mobile and Technology

The U.S. Justice Department is looking into Google’s takeover of airline ticketing software firm ITA Software to determine whether the deal would exert too much influence on the online travel industry, according to a report filed the Wall Street Journal.

Published: 07 Sep 2010

The U.S. Justice Department is looking into Google’s takeover of airline ticketing software firm ITA Software to determine whether the deal would exert too much influence on the online travel industry, according to a report filed the Wall Street Journal.

According to the same report, antitrust authorities are focusing on whether rivals would continue to have access to ITA’s data and whether Google would unfairly steer web searchers to its own travel services. Government lawyers are asking executives in the online travel industry if Google could unfairly disadvantage potential new rivals by cutting off their access to ITA’s software, the paper said, citing people familiar with the questioning.

A DoJ investigation has been seen in some circles as potentially setting a higher hurdle for Google to clear, since the FTC cleared its earlier acquisitions of Admob and DoubleClick. However, David Balto, an antitrust expert not connected to the case, (according to a recent ft.com report) said that the prospects for the deal were unlikely to have been affected by the choice of regulator, and predicted that the acquisition would ultimately be cleared.

Search giant Google has already acknowledged that it has received what’s called a “second request”, which means that the DOJ is asking for more information so that they can continue to review the deal with ITA.

Providing an update on the status of its ITA acquisition, Google’s senior product manager Andrew Silverman recently wrote: “While this means we won’t be closing the deal right away, we’re confident that the DOJ will conclude that online travel will remain competitive after this acquisition closes. In fact, over the past few weeks online travel companies have noted that they have alternatives to ITA’s product.” Silverman referred to Expedia’s Best Fare Search alternative and Worldspan’s e-Pricing search technology. There was a reference made to a media report, in which Continental Airlines noted that “there are alternatives to the [ITA] shopping solution in the marketplace, both internally and externally”.

“While we of course hope to continue working with ITA’s current customers, these comments demonstrate that competition will remain alive and well. We’ll be working cooperatively with the Department of Justice as they continue their review,” wrote Silverman.

“While we think this acquisition will benefit travellers as well as those seeking their business, we know that closer scrutiny has been one consequence of Google’s success, and we said that we wouldn’t be surprised if there were a regulatory review before the deal closes.”