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Google Cleared to Buy ITA

Danny Goodwin
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Seems today's Department of Justice proposed settlement has appeased all sides of the Google-ITA acquisition debate. The deal, 9 months in the making, will see Google develop and license travel software that would be available to rivals to avoid falling into the realm of anti-competitive.

The Department of Justice's Antitrust Division today filed a civil antitrust lawsuit in U.S. District Court in Washington, D.C., to block the proposed acquisition, while also filing the proposed settlement that would resolve the concerns. Under the settlement, which still needs federal court approval, Google is required to:

  • Continue licensing ITA's QPX software to airfare websites on commercially reasonable terms.
  • Continue funding research and development at similar levels to what ITA has invested in recent years.
  • Further develop and offer ITA's InstaSearch product (currently in development) to travel websites.
  • Implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA's customers.
  • Avoid 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.

The DOJ said that Google's $700 million acquisition of ITA, 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."

ITA is a software company that specializes in organizing airline data, such as flight times, availability, and prices. Travel websites including Orbitz, Kayak, Hotwire, American Airlines, United Airlines, and even rival search engine Bing use ITA's software.

Google's Senior Vice President, Commerce and Local Jeff Huber, in a blog post said Google was "excited that the U.S. Department of Justice today approved our acquisition." He noted that Google has committed to extending contracts with ITA's customers and agreed to "let both current and new customers license ITA's QPX software into 2016."

Even Google's fiercest opponent, FairSearch.org, which formed in October in an attempt to kill the deal, seemed pleased with the terms, issuing the following statement:

"Today's antitrust enforcement action by the Justice Department is a clear win for consumers and competition in the marketplace. Google's attempt to acquire unrestricted control over ITA, which would have violated antitrust laws, has been thwarted - representing a significant step in the right direction."

This whole process began last July, when Google announced its agreement to buy ITA Software.


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