UPDATED 12:40 EDT / APRIL 08 2011

Google’s ITA Deal Cleared by U.S. Justice Department, Conditions Applied

The much-talked about Google’s Travel Deal has finally got the nod of U.S. Department of Justice, but with several concessions and conditions applied. Google planned to purchase flight-data company ITA Software Inc. for a whopping $700 million. The same has now received clearance form the Justice Department, with a special settlement so that deal should not hurt competition.

This will require Google to continue to license ITA’s software to airline-ticket search and booking sites, along with providing funding for research and development of the software at levels that are similar to ITA’s investments in recent years. According to the Justice Department, Google should also develop and offer ITA’s next-generation software to travel websites.To protect the data of IT customers, it will also need to implement internal firewalls to prevent the unauthorized use of sensitive information.

While other competitors like Microsoft are concerned about threatening competition in the online travel industry, Google said the acquisition would help it provide more useful information to consumers when they search for flight data. In addition to Microsoft, other opponents of this deal include Expedia Inc., Kayak.com and Sabre Holdings, which believe that Google would use its dominance of online search to direct users toward its own travel services and away from that of rivals.

But this is not a new thing as back in October last year, these travel sites also formed a coalition to counter the deal.

“Google has tremendous power in the search market, and it gives Google the ability to steer users in directions that are best for Google,” Expedia’s counsel, Thomas Barnett, said in an interview. “All of that would ultimately end up harming consumers.”

Defending itself, Google pointed out,

“Our reason for making this acquisition is simple: ITA will help us provide better results for our users. When someone searches for “flights from San Francisco to London,” we’d like to provide not just “ten blue links” but exact flight times and prices as well — just as our competitors do today.”

Later on in December, Microsoft also joined the coalition against Google’s $700 million acquisition of ITA Software as all of the travel sites involved in the coalition above as well as many others rely on ITA’s crucial data. And this includes Microsoft’s Bing for its flight search tool as well.


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