Justice Department Scrutinizes Google’s ITA Software Acquisition
Google’s $700 million purchase of ITA Software, aflight-information software company, is under scrutiny as the Justice Department
tries to determine whether the purchase would give Google too much sway over the
online travel industry.
ITA Software Inc. creates the software that powers the most popular
airline-ticket search and booking sites online. The company collects data about
flight times, seat availabilities and airfare prices, and manages the
information for airlines and Web sites.
Online travel companies such as TripAdvisor, Bing, Hotwire, Orbitz, Continental,
American Airlines, and Alitalia are all dependent upon data generated by ITA.
For this reason, Google’s purchase of the company in July set off red flags in
the travel industry, since the multi-million-dollar deal would put Google in
control of ITA’s data.
Though the merger investigation is still in an early stage, antitrust
authorities in the Justice Department are looking closely at the purchase to
determine if Google could disadvantage rivals by cutting off their access to
ITA’s software.
Justice officials are also investigating fears that Google might use its control
of ITA data to steer Web searches toward its own services and away from
competitors’ search engines.
Google has said it plans to build a travel-search service around ITA’s
technology. Rather than direct traffic to rivals as it currently does, Google
might use its powerful search engine to send viewers to its own service to the
detriment of rivals such as Kayak.com and CheapFlights.com.
In the past, Google has been accused of unfairly using its
search engine in its own favor. For example, when Google users look for a
location or directions, they are directed to Google Maps over Mapquest. When
users search for a product, they are often directed to Google Shopping over a
site like Buy.com.
Some Google critics have even accused the company of pushing the links of their
competitors’ sites lower in search results.
Google’s top brass, however, seems confident the government will not file
antitrust charges against the company, in part because Google has no plans to
sell airline tickets to consumers.
Google’s entrance into the travel world would not affect sites like Expedia and
Orbitz that sell tickets. Rather, the company would direct traffic to sites like
these for airfare purchases, and make revenue off of advertising in their search
results.
However, travel meta-search sites like Kayak and Bing Travel would become direct
competitors to Google. The next few months will determine whether or not
Google’s proposed travel search engine promotes competition or helps cement the
company’s online dominance.
By Adriana Padilla for PeterGreenberg.com.
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