DOJ Approves Google's Purchase Of ITA
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The Justice Department has announced it will allow Google's $700 million purchase of a flight data software company.
But NPR's Tamara Keith reports that the approval comes with lots of new requirements to make sure Google plays fair with its competitors.
TAMARA KEITH: When you go to search for flights on, say, KAYAK...
(SOUNDBITE OF TV AD)
KAYAK: Compare hundreds of travel sites at once. KAYAK, search one and done.
KEITH: ...or Orbitz...
(SOUNDBITE OF TV AD)
Unidentified Man #2: In one click...
Unidentified Man #3: Perfect.
Man #2: When you Orbitz, you know.
KEITH: ...or Bing...
(SOUNDBITE OF TV AD)
Unidentified Man #4: Stop searching. Start deciding with Bing, the decision engine from Microsoft.
KEITH: ...there's a software company behind the scenes that makes those quick, clear results possible. The company is called ITA Software, and last year when Google announced it was planning to buy ITA, it set off antitrust alarms. Google was planning to get into the travel search business while also owning the software that other travel search firms rely on.
Robert Birge is the chief marketing officer at KAYAK. He says companies like his were worried about what Google would do with the software.
ROBERT BIRGE: Is Google going to continue licensing this to us and continue upgrading the product, or are we going to get a diminished product? You know, essentially owning it could put them in a position to undermine our product.
KEITH: That concern and others was enough to cause the Justice Department to conclude that the acquisition would have hurt competition and harmed consumers by reducing choice and innovation.
Today, the Justice Department said the sale can go ahead, but only because Google has agreed to a series of restrictions. Spencer Waller is director of the Institute for Consumer Antitrust Studies at the Loyola Chicago Law School.
SPENCER WALLER: What they're really saying here is, as a result of this merger, Google is going to control something that's absolutely essential for competition and can't misuse that control to the detriment of competitors or consumers. And to ensure that that happens, there's 22 pages of explanation for when, why and how.
KEITH: For example, Google will be required to continue selling ITA's flight data software to other travel search sites at reasonable prices. It will have to keep improving the software and developing products that are in the pipeline. Google will have to set up a firewall, so it cannot get sensitive information from ITA's customers. And most notably, Google has agreed to ongoing monitoring by the Justice Department.
JOHN LOPATKA: It's a major concession on Google's part.
KEITH: John Lopatka is a law professor at Penn State University and wrote a book about the Microsoft antitrust case.
LOPATKA: They're inviting the government in because the alternative is for the government to say: We're going to oppose this merger. You won't be able to acquire ITA.
KEITH: On a company blog, a Google executive celebrated the Justice Department's approval of the acquisition and didn't mention the ongoing monitoring. He said, quote, "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."
Observers say Google isn't out of the antitrust woods here. The government made a point of saying it could come back at the company if it suspects Google is using its dominance in search to thwart competition in travel or any other market.
Tamara Keith, NPR News, Washington.
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