US Government Scrutinising Google ITA Purchase
Google said on 27 Aug. that the Department of Justice filed a second request for information about the search engine’s $700 million (£451m) bid to buy ITA Software
The Department of Justice is taking a harder look at Google’s $700 million ($451m) bid to buy ITA Software, lodging a second request with the search engine for more information about the deal.
Google last month agreed to buy the flight information software specialist to build new flight search tools that will make it easier for users to search for flights, compare flight options and prices, and shuttle users to a site to purchase tickets.
Google has had little to offer in this area to date compared with Microsoft’s Bing, which uses ITA’s info for its travel Webpage. Kayak and Orbitz also rely on ITA for information. Kayak expressed concern that Google could shut off its access to the ITA data, something the search engine pledged not to do.
DoJ Scrutinise Deal
This concern, combined with Google’s increasingly acquisitive nature, was enough to attract the DOJ and Federal Trade Commission to discuss who would scrutinise the bid. The DOJ, which typically covers travel-related agreements, won out.
“While we think this acquisition will benefit travelers as well as those seeking their business, we know that closer scrutiny has been one consequence of Google’s success, and we said that we wouldn’t be surprised if there were a regulatory review before the deal closes,” wrote Andrew Silverman, a Google senior product manager, on 27 Aug. “This week we received what’s called a ‘second request,’ which means that the U.S. Department of Justice is asking for more information so that they can continue to review the deal.”
Second requests typically mean the agency is concerned about the impact a deal will have on an industry and could signal the DOJ’s intent to block Google’s bid. Google and travel industry analysts have contended that the travel industry is plenty competitive enough to allow Google to buy ITA.
Travel Competitive Enough
Google quoted noted travel guru Arthur Frommer, who said that “the existence of so many competing airfare search engines convinces me that the field will remain competitive even after Google enters it.”
Indeed, Expedia offers Best Fare Search, while WorldSpan offers e-pricing search. Silverman said Google is confident the DOJ will find that online travel will continue to be competitive if Google buys ITA.
