The Department of Justice approved Google’s purchase of travel data provider ITA Software with conditions. Specifically, the DOJ will require Google to develop and license travel software, firewall data and continue to develop ITA products.
In a statement, the DOJ said that the settlement with Google will “protect competition for airfare comparison and booking websites” and allow ITA to “power their websites to compete against any airfare website Google may introduce.” Google also announced that its $700 million ITA purchase was approved and said it would let ITA customers extend their contracts to 2016.
According to the DOJ, Google’s initial ITA acquisition would have cut competition for flight search Web sites. ITA is the leading player in airfare pricing systems.
If there’s a problem with this Google-ITA arrangement the search giant will be required to go through arbitration.
Here’s a look at the requirements in more detail:
Google has to license ITA’s software. Google will be requited “to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms.” QPX searches for fares, schedules and flight availability. Google will have to develop ITA’s next-gen product dubbed InstaSearch.
Build a firewall. The DOJ said:
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.
Share the data and formalize a complaint procedure. The DOJ said Google is also prohibited from entering into agreements with airlines that would restrict information flow to competitors. The proposed settlement provides for a formal reporting mechanism for complainants.
The terms set an interesting blueprint for future Google deals, but it remains to be seen how these restrictions work in practice. Google also agreed to privacy audits to settle an FTC investigation. A likely scenario is that competitors to ITA are going to look more valuable to airlines in the future.
Fairsearch.org, a group that opposed the Google-ITA deal, said in a statement:
Today’s decision by the Justice Department to challenge Google’s acquisition of ITA Software is a clear win for consumers. The Department concluded Google’s unrestricted control over ITA’s key flight search technology would have violated the antitrust laws. By putting in place strong, ongoing oversight and enforcement tools, the Department has ensured that consumers will continue to benefit from vibrant competition and innovation in travel search. While this enforcement action is an important victory, Google’s abuse of its search dominance still threatens competition and consumers in many critical areas of online services.
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