Competitors will be able to complain if they believe Google is altering search results. | REUTERS Justice approves Google-ITA deal

The Department of Justice approved Google's $700 million purchase of ITA Software Friday but with conditions to prevent the Web giant from unfairly overtaking the online travel market.

The agreement thrusts the federal government even deeper into the business operations of the Mountain View, Calif. Web search giant. The DOJ will force Google to submit to regular reviews of its conduct in online travel and create a venue for competitors to bring complaints against Google alleging improper behavior.


The new government oversight of Google comes just a week after the Federal Trade Commission announced plans to regularly audit Google's online privacy practices for the next 20 years.

The DOJ and FTC scrutiny “creates a new normal for Google to operate in,” Rebecca Arbogast, managing director of the research firm Stifel Nicolaus, said. “Going forward, it will always be under government oversight. The days when it could operate under the radar screen and not have to worry about its actions being judged and critiqued and monitored are over — by virtue of their success, of course.”

The DOJ's extensive list of demands demonstrates that regulators view Google as a potentially serious antitrust threat — and could increase the likelihood of a broader look at whether Google is playing fair with competitors.

To secure DOJ's blessing, Google agreed to continue licensing ITA software to rival travel sites and to make available some improvements to the software. The agreement establishes protections to keep Google from obtaining sensitive information from other sites that use ITA software.

It does not dictate how Google should display search results of rival travel sites, a concern that drove opposition to the deal. But the government decree does invite competitors to complain to DOJ if they believe that Google is manipulating the results to unfairly favor its own travel site or disadvantage competitors.

DOJ made those demands to assuage concerns that Google would use the purchase of ITA to parlay its dominance in search and search advertising to the lucrative area of online travel. ITA provides the back-end tools that power many airline and travel search websites.

Absent the conditions, DOJ said, the purchase would substantially lessen competition in online travel.

“The Department of Justice’s proposed remedy promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software,” Joseph Wayland, a deputy assistant attorney general in DOJ’s antitrust division, said in a news release. “The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”

Google announced the purchase of ITA in July, triggering the DOJ review. The company said the acquisition would enable it to build a superior travel site, benefiting consumers.

“We’re moving to close this acquisition as soon as possible,” Jeff Huber, Google’s senior vice president for commerce and local, said in a blog post. “We’re confident that by combining ITA’s expertise with Google’s technology we’ll be able to develop exciting new flight search tools for all our users. Up, up and away!”

A group of competing travel sites created a coalition called FairSearch.org to organize opposition to the deal. The coalition includes TripAdvisor, Travelocity, KAYAK, Hotwire, Expedia, Microsoft and others.

The DOJ's consent agreement responded to many of the group’s concerns and includes these provisions:

• A compulsory licensing requirement that will force Google to continue making ITA technology available “on commercially reasonable terms” to competitors that now license the technology. Google will also be required to fund, at least at current levels, research and develop of ITA existing software known as QPX. And it will have to develop and offer to competitors ITAs next generation InstaSearch software, which is currently in development.

• A firewall to prevent Google from gleaning proprietary information from competing sites that use ITA software.

• A formal reporting mechanism for competitors to raise concerns with DOJ officials about Google's conduct, such as how it displays travel search results.

• Language blocking Google from cutting deals with particular airlines that restrict what information about booking the airlines share with Google’s competitors.

The DOJ — Google agreement must still be approved by a federal court.

Below are several documents related to the deal:

Google-ITA competitive impact statement



DOJ complaint



Final judgement



Google-ITA stipulation and order



Elizabeth Wasserman contributed to this report.

This article first appeared on POLITICO Pro at 12:35 p.m. on April 8, 2011.