The U.S. Justice Department and Google have reached a deal clearing the way for the search giant’s $700 million acquisition of flight data company ITA Software — an acquisition that was opposed by Microsoft, Expedia and a number of others in the industry.
It’s a tricky situation in part because Google’s rivals — including Microsoft — use ITA’s technology. The approval imposes conditions on what Google can do with the ITA technology in an attempt to keep the company from unfairly capitalizing on the ITA acquisition.
Among other conditions. DOJ says the settlement “will protect competition for airfare comparison and booking websites and ensure those websites using ITA’s software will be able to power their websites to compete against any airfare website Google may introduce.”
Google had previously promised to honor existing ITA customer agreements. The DOJ deal also require Google to license ITA’s QPX software to others in the industry on “fair, reasonable and non-discriminatory terms,” for the next five years, according to a Google blog post.
In a statement this morning, the FairSearch.org coalition that opposed the deal called the Justice Department’s decision to impose conditions on the Google deal ” a clear win for consumers.” An excerpt from the group’s statement.
The Department concluded Google’s unrestricted control over ITA’s key flight search technology would have violated the antitrust laws. By putting in place strong, ongoing oversight and enforcement tools, the Department has ensured that consumers will continue to benefit from vibrant competition and innovation in travel search. 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.
In its news release, the Justice Department details the restrictions …
Under the proposed settlement, Google will be required to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms. QPX conducts searches for air travel fares, schedules and availability. Google will also be required to continue to fund research and development of that product at least at similar levels to what ITA has invested in recent years. Google will also be required to further develop and offer ITA’s next generation InstaSearch product to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries. InstaSearch is currently not commercially available, but is in development by ITA.
To prevent abuse of commercially sensitive information, Google will be required to implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA’s customers. The proposed settlement delineates when and for what purpose that data may be used by Google. Google is also prohibited from entering into agreements with airlines that would inappropriately restrict the airlines’ right to share seat and booking class information with Google’s competitors. Finally, the proposed settlement provides for a formal reporting mechanism for complainants if Google acts in an unfair manner.