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After nine months of waiting, the Department of Justice (DOJ) finally approved Google's $700 million acquisition of Cambridge, Massachusetts-based ITA Software. ITA provides fare search technology for numerous major metasearch airline websites. Google will presumably use ITA technology to integrate airfares into its search results,
In the intervening nine months, however, opponents of the deal campaigned heavily against it, notably through the group FairSearch.org, which counts among its members TripAdvisor and Expedia (both of which are sister sites to SmarterTravel). FairSearch argued that Google would gain access to its ITA customers' proprietary data, and could withhold ITA innovations from those companies, thus giving it an unfair advantage over its competitors once it launched a fare search tool of its own.
Similarly, FairSearch and other critics of the deal suggested that Google's influence in the space could limit consumer choice by cutting off the fare search at Google rather than passing users along to other sites.
Apparently the DOJ shared some of these concerns, because its approval of the deal is laden with catches and clauses:
- "Google will be required to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms." Google had promised to honor existing agreements, but this appears to take things a step further.
- "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 (which is not yet commercially available) to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries."
- "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 ... 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."
- "The proposed settlement provides for a formal reporting mechanism for complainants if Google acts in an unfair manner."
Both Google and FairSearch claim to be pleased with the outcome, and, quite frankly, there's not a whole for either side to complain about. The DOJ directly addressed many of FairSearch's concerns, but at the same time allowed Google to move forward with the deal. Sure, FairSearch may have preferred an outright block of the deal, just as Google would have preferred an unconditional approval, but neither option ever seemed likely or even reasonable.
So, now that all the legal wrangling, lobbying, and waiting is over, what the heck will Google do with ITA? That's a question for another day.
Readers, do you think consumers will benefit from Google entering the fare search space?