DOJ Approves Google / ITA Software PurchaseApril 14, 2011
As reported in PC Mag:
By: Chloe Albanesius
The Department of Justice on Friday approved Google’s purchase of ITA Software, with certain conditions.
Specifically, Google will be required to develop and license travel software, establish internal firewall procedures, and continue software research and development, the DOJ said in an announcement.
Google will also have to provide mandatory arbitration under certain circumstances and provide a formal reporting mechanism for complainants if Google acts in an unfair manner.
The deal 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 DOJ said.
As a result, Google said in a blog post that it will extend ITA’s existing client contracts into 2016 and let current and new customers license ITA’s QPX software on “fair, reasonable and non-discriminatory terms.”
“We’re moving to close this acquisition as soon as possible, and then we’ll start the important work of bringing our teams and products together,” wrote Jeff Huber, senior vice president of commerce and local at Google. “We’re confident that by combining ITA’s expertise with Google’s technology we’ll be able to develop exciting new flight search tools for all our users.”
Google announced plans to buy ITA for $700 million in July 2010. The Boston-based software company specializes in organizing airline data like flight times, availability, and prices. Google said last year that the purchase will help Google produce new flight search tools intended to simplify the process of searching for flights, comparing options, and buying tickets.
Other online travel companies, however, were not pleased. In October, they launched a public battle against the purchase, arguing that it will result in higher travel prices, fewer travel options, and less innovation in Web-based travel search. The FairSearch.org coalition includes representatives from Expedia, which owns Hotwire and TripAdvisor, Farelogix, Kayak, and Travelocity.
At the time, Google hit back with a blog post that said it was disappointed by the airline companies’ campaign. Google argued that the top three travel sites are not powered by ITA and that purchasing the company will actually lead to more travel search innovation.
In a Friday statement, FairSearch.org said the DOJ deal “is a clear win for consumers.”
The conditions put in place by the DOJ will ensure “that consumers will continue to benefit from vibrant competition and innovation in travel search,” the group continued. “While this enforcement action is an important victory, Google’s abuse of its search dominance still threatens competition and consumers in many critical areas of online services. Antitrust enforcers and lawmakers in the US and elsewhere must remain vigilant in their investigation of these larger concerns and take whatever further enforcement actions are needed to protect consumers.”
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