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DOJ approves Google's ITA deal ... with caveats

By David Goldman, staff writer


NEW YORK (CNNMoney) -- Google can have its precious flight data company if it promises to play nice, the Department of Justice said on Friday.

The DOJ approved the $700 million takeover deal between Google, the world's largest search company, and ITA, the world's largest airline search software company, provided that Google accept certain restrictions.

The search giant would have to continue to licence ITA's software to airfare websites "on commercially reasonable terms." Google (GOOG, Fortune 500) would also be required to maintain and enhance that software in a manner consistent with ITA's research and development investment over the past several years.

The company would also have to put an internal firewall in place to prevent Google from accessing "competitively sensitive information" gathered from ITA's customers. Google also can't enter in exclusive contracts with airlines that would prevent the airlines from providing certain ticketing information to the search company's competitors.

"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 prepared statement.

The worry, of course, is that Google maintains a 65% share of the search market. If its access to flight information is superior to its rivals, it could easily shut out the competition.

Boston-based ITA specializes in organizing airline data, including flight times, availability and prices. Its data is used on a host of websites like Kayak, Orbitz, Expedia.com, TripAdvisor and Microsoft's (MSFT, Fortune 500) Bing, as well as a number of airlines' websites.

FairSearch.org, a group representing Expedia and Kayak, said Friday that it was pleased with the DOJ's terms for the deal, calling it a "clear win for consumers." Kayak, with backing from Expedia.com, had offered last year to buy ITA to prevent Google from purchasing it.

When it announced the ITA deal last July, Google said it had no intention of selling airline tickets, but it would likely direct consumers to sites on which they can buy tickets. Google's users already come to the site for travel searches, but find it difficult to express flight queries through the current search tools, the company said.

With its ITA purchase, Google said it intends to make airline searches simpler. The company painted a picture of the online travel landscape as one of mass confusion, with thousands of options and unclear ticket pricing and availability.

For instance, Google could use ITA's software to field more advanced searches, like "Where can I travel for $700?"

The proposal still needs to gain approval from a federal judge. The DOJ's Antitrust Division filed an antitrust lawsuit Friday in U.S. District Court in Washington, D.C., to block the deal. The DOJ then filed a proposed settlement with all the restrictive terms that, the Justice Department said, would alleviate those antitrust concerns.

A Google representative was not immediately available for comment on the proposed settlement's terms.  To top of page

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