Google has reached an agreement with the US Department of Justice that would allow it to complete its $700m acquisition of flight data outfit ITA Software.
Under the agreement, Google must continue to develop ITA's QPX travel software and license it to third-party websites under "commercially reasonable terms", while erecting "internal firewall procedures" that will hide third-party data from the company. The web giant will also be required to provide mandatory arbitration "under certain circumstances" and provide for a formal mechanism for reporting complainants that it's acting in an unfair manner in the travel-search business.
The DoJ said that as originally proposed, Google's ITA acquisition would have "substantially lessened competition" among flight-search websites, resulting in "reduced choice and less innovation for consumers". Other travel websites, such as Kayak and Hotwire, rely on data and software from ITA.
"The Department of Justice’s proposed remedy promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software,” reads a canned statement from Joseph Wayland, deputy assistant attorney general of the Department of Justice’s antitrust division. “The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”
The agreement between Google and the DoJ must still be approved by a federal court.
The DoJ also said that under the deal, Google must continue to develop and offer ITA's InstaSearch software, which has yet to be publicly released. And Google is barred from inking agreements with airlines that would "inappropriately restrict" the airlines’ right to share seat and booking-class information with Google competitors.
Google intends to use ITA to offer a vertical travel-search service atop its web search engine. "How cool would it be if you could type 'flights to somewhere sunny for under $500 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?" Google said today in a blog post. "Well, that's exactly why we announced our intention to buy ITA ... and we're excited that the US Department of Justice today approved our acquisition."
The question is whether, with the DoJ settling with Google, the FTC will now open a broad antitrust investigation of the web giant. The word is that the FTC was waiting for the ITA acquisition to resolve before deciding whether to act. The concern is whether Google can use its web-search monopoly to build another monopoly, not only in the flight-search market but also in any other vertical search market. ®