Unlike with the recent approval of the Comcast-NBC Universal merger, critics of Google's proposed acquisition of the travel software firm ITA are unlikely to be pacified by the possible conditions that federal regulators are reportedly weighing.
The Justice Department is reviewing Google's proposed acquisition of ITA, which provides its search technology to many travel search sites, and appears close to wrapping up its deliberations, according to several sources following the matter closely.
Some recent reports have speculated that the department is considering whether to require Google to offer a compulsory license for those who want to ITA's technology. A Google spokesman would not comment on the deliberations at Justice or on what conditions it has proposed to the department to gain approval of the deal.
Google has said publicly that its $700 million acquisition of ITA will "create a new, easier way for users to find better flight information online, which should encourage more users to make their flight purchases online." The firm argues that the deal will benefit passengers, airlines and online travel agencies by "making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines' and online travel agencies' websites. Google won't be setting airfare prices and has no plans to sell airline tickets to consumers."
But critics of the merger, which include a group of travel search sites that compete against each other, have been lobbying to have the merger blocked. Some say that conditions would not address the overall harm to competition they see from the merger.
"The only way to truly avoid competitive harm is to block the transaction," said Expedia counsel Thomas Barnett, who headed the Justice's antitrust division during the administration of former President George W. Bush.
Many of the travel and other online sites including Expedia, Kayak, Microsoft and Travelocity have joined together as the FairSearch coalition to oppose the Google ITA deal. Several of these travel sites including Kayak, Hotwire and major airlines such as Continental and United Airlines, use ITA Software.
When asked about the possibility of requiring Google to offer ITA software under a compulsory license, said Kayak Chief Marketing Officer Robert Birge said it would be difficult to enforce. He said he is concerned that a compulsory license would not guarantee that innovations are passed on to the licensees or ensure that the software performance is not degraded. Kayak uses ITA software for its travel search services but also has its own proprietary technology layered on top of the ITA software, an arrangement that gives ITA access to Kayak's own software.
"We don't think conditions will protect competition," Birge sad.
Expedia, Kayak and other travel search sites worry that unlike ITA, which licenses its software to travel sites but does not compete with them, Google also will be a competitor. In addition, they voice concern that Google will leverage its dominance in Internet search to travel search by offering its products at the top of a search page when someone is looking for travel options, which it does with other its other services such as Google maps.
"Right now ITA doesn't compete with us. The second they do their incentive has changed," Birge said.
He added that Kayak asked Google and ITA whether they would agree to renew Kayak's license to use ITA software, continue to grant access to software upgrades and put up a firewall to protect Kayak's intellectual property but were turned down on all three requests.
Don't Miss Today's Top Stories
Chock full of usable information on today's issues."
Michael, Executive Director
Concise coverage of everything I wish I had hours to read about."
Chuck, Graduate Student
The day's action in one quick read."
Stacy, Director of Communications
Great way to keep up with Washington"
Ray, Professor of Economics