Government Settlement Proposed for Google to Acquire ITA Software

The U.S. Justice Department has come up with a proposed settlement for Google (News Alert) to acquire ITA Software for $700 million – with several conditions recommended.

With the purchase, Google will become a key player in the online travel market, added TMCnet.

Under the plan, Google will develop and license ITA’s (NewsAlert) travel software to other companies – to avoid “reduced competition among providers of comparative flight search websites in the United States,” the AFP news agency said.

“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, deputy assistant attorney general of the Department of Justice’s Antitrust Division, said in a statement. “The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”

Under the proposal, Google will license ITA’s QPX software “to airfare websites on commercially reasonable terms.” QPX provides searches for airfares, schedules and seat availability. Google will also have to develop and later provide ITA’s InstaSearch product to travel websites, when it becomes commercially available. 

As part of the approval, the Justice Department is also requiring Google to establish an internal firewall to prevent unauthorized use of data gathered from ITA customers, according to a Justice Department press release.

In addition, Google can’t restrict an airline from sharing seat and booking information with Google’s competitors, AFP said.

The proposed settlement needs final approval from a federal court. 

Expedia (News Alert), Kayak, Travelocity and several other online travel sites attempted to stop the Google-ITA deal, because Google would have had excessive control over online travel and it would have led to higher prices, AFP said.

The Justice Department said that Google’s original plan to acquire ITA reduced competition among flight search websites, leading to “reduced choice and less innovation for consumers.”

“We will begin work immediately to close the acquisition, and are committed to making the integration process as seamless as possible for our employees and customers,” ITA said in a company statement.

“It’s important to us that ITA continue with business as usual, providing great service to its business partners,” Jeff Huber, senior vice president, Commerce and Local, at Google, added in a Google blog post. “We indicated last July that we would honor ITA’s existing contracts.… We’ve formally committed to let ITA’s customers extend their contracts into 2016. We’ve also agreed to let both current and new customers license ITA’s QPX software on ‘fair, reasonable and non-discriminatory terms’ into 2016—along with related commitments aimed at making ITA’s technology available to other travel sites.”

News of the settlement was welcome by Google.

“How cool would it be if you could type ‘flights to somewhere sunny for under $500 in May’ into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily?,” Huber said in the Google blog post. “Well that’s exactly why we announced our intention to buy ITA Software … last July—and we’re excited that the U.S. Department of Justice … approved our acquisition.”

ITA Software is a provider of travel solutions. ITA’s QPX, an airfare shopping system, is used by airlines and travel distributors. On July 1, 2010, ITA announced an agreement that Google would acquire the company. ITA was founded by computer scientists from MIT (NewsAlert) and is located in Cambridge, Mass.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Janice McDuffee

Apr 12th, 2011 | Posted in Travel
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