Google takes to the air in online travel but with safeguards for its rivals
With a company as powerful as Google, you have to worry when it wants to move into your business.The US has done its best to safeguard the worriers in online travel as Google is allowed to make a key acquisition.
It's the first time in its 12-year history that Google has agreed to a set of government conditions as part of a business deal. The main worry was that Google could cut off rivals' access to ITA's flight data.
Many Web travel sites depend on ITA to power their searches, including Orbitz, TripAdvisor, Hotwire, Kayak and Microsoft's Bing. ITA's software also handles about 65% of direct, online air-travel bookings for airlines.
Under the legal settlement allowing the ITA purchase, Google must continue to license ITA's service to online airfare search sites for five years - on terms that are "reasonable and nondiscriminatory."
And there's more.Google must also make available a next-generation service it has in the pipeline and continue to fund research and development at levels that are similar to ITA's investments in recent years.
Finally, Google has agreed to five years of monitoring that allows the US Justice Department to track Google's compliance
"Google is the largest player in the search market in the U.S.—it has market power—and in entering this new line of business…has incentives to favor its own affiliates," a Justice Department official said.
"Because of that we feel the need for monitoring to ensure that there's nothing about that new connection that would harm competition in the flight search business."
Opponents of the deal, including Microsoft, Expedia and Kayak, said that, despite losing the battle,they were pleased the Justice Department had shown concern about Google's growing grip on the internet.
The Justice Department is "clearly reserving judgment on whether it needs to take further enforcement action in this area," said Thomas Barnett, a former head of the Justice's antitrust division who now represents Expedia.