Justice Dept. sharpens focus on Google-ITA deal

DOJ is determining whether Google's acquisition of the online travel firm will unfairly hurt competition and drive people to Google's travel services instead of third-party sites.

The DOJ is probing Google's proposed takeover of ITA.
The DOJ is probing Google's proposed takeover of ITA Software. ITA

Google is facing regulatory challenges from the Justice Department over its proposed purchase of online travel firm ITA Software.

The search giant must obtain government approval of its $700 million deal announced in early July to buy ITA Software, which helps travelers find cheaper airfares through relationships with major carriers, travel agencies, and travel search engines. Google wants to incorporate ITA's technology into its own search engine to make it easier for people to find tickets directly through Google.

But the Justice Department is concerned that a Google-owned ITA could give Google too much control over the online travel industry. The DOJ's review, which Google announced late last month, is apparently focused on two key antitrust points, The Wall Street Journal reported Monday.

First, travel sites such as Kayak, Orbitz, and Expedia already use ITA's services as does Microsoft Bing. Were Google to acquire ITA, would such companies still have access to ITA's travel data? Some of those in the online travel industry have already voiced their fears to DOJ lawyers that the deal could turn Google into the new hub for finding cheap airfare and drive people away from their own sites, the Journal said.

Second, people who currently search Google for travel and airfare are directed to other Web sites where they can book their flights. The DOJ is interested in the potential impact of giving Google the power to drive people to its own travel services. Representatives from Microsoft, Expedia, and other companies have been speaking with the DOJ on this issue as well, the Journal reported.

On its end, Google has attempted to address some concerns over the acquisition. The company has said it doesn't plan to sell airline tickets directly to customers and would instead continue to lead people to sites such as Expedia and Orbitz to purchase the tickets. Google has even argued that any new travel services it creates could send even more customers to third-party sites in hopes of finding good deals on airfare.

Google has stated its confidence that the acquisition will be approved.

The Justice Department had sent Google a second request for information on the proposed acquisition late last month, although that's not unusual in a deal of this magnitude especially when antitrust concerns have been voiced.

 

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