It appears the Department of Justice has heard the cries of travel companies and consumer watchdogs, who threw a fit over Google‘s planned $700 million acquisition of ITA Software. Many travel sites, from Microsoft‘s Bing to Kayak to Expedia, use ITA’s technology, which helps enable consumers to search for airfares and flight times. If Google were allowed to buy ITA, some believed, it could give the company an unfair advantage in the travel-search business.
But today, the Department of Justice approved Google’s proposed purchase of ITA–with some important caveats. The DOJ has mandated that Google must adhere to a slew of requirements to ensure that healthy competition remains in the online travel industry. For now, the DOJ’s decision has satisfied critics.
“We are extremely pleased with the decision,” says Robert Birge, chief marketing officer of Kayak. Fairsearch.org, a coalition of businesses that includes Kayak, Expedia, and Bing, also lauded the DOJ’s moves. “Today’s antitrust enforcement action by the Justice Department is a clear win for consumers and competition in the marketplace,” Fairsearch said in a statement. “Google’s attempt to acquire unrestricted control over ITA, which would have violated antitrust laws, has been thwarted–representing a significant step in the right direction.”
According to Birge, the DOJ has protected Kayak and sites like it in two key ways. First, it ensures the company’s continued access to ITA, a product that is critical to Kayak’s technology. Second and most importantly, “they’ve protected our own technology that we’ve developed over the last seven years and that sits on [ITA’s] servers,” says Birge.
But such protections were not always guaranteed. While Google has defended the acquisition–arguing that it would actually increase, not stifle, competition–Birge says Google’s purchase could have had a big impact on Kayak, had the DOJ not intervened.
“It would’ve put them in control of a critical and unique asset that could put them in a position to undermine our product,” he says. “I’m sure you’re going to hear from the other side that they’re very happy their deal was approved–after nine months, by the way. You know, we asked Google in normal business context: We would like you to assure us that you’re going to continue to provide us access to this product, including ongoing upgrades, and that you will protect our intellectual property, and that, essentially, you won’t look at the proprietary technology that we’re using.”
“And they said no on multiple occasions,” Birge says.
The DOJ, he adds, did not accept no as an answer.
“The government has essentially told them, you told Kayak and companies like it no, but you’re going to have to do these things,” he says. “Google said this wasn’t a threat to competition, and I think the Justice Department should be applauded: They really rolled up their sleeves and dug into the details, and they’ve put very meaningful decrees [in place]. For us, this is an unambiguous win.”
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