Competitors Claim ITA Acquisition Would Give Google an Unfair Advantage in Travel Search

10/26/10Follow @wroush

[Updated, see page 2] Quite a few online travel-info companies—FareCompare, Fly.com, Hotwire, Kayak, Sidestep, TripAdvisor, and Orbitz, to name a few—get their airline fare and seat availability information from a vast real-time database called QPX, the creation of Cambridge, MA-based ITA Software. Even search engines like Bing rely on QPX for flight data. So it sent shockwaves through the travel industry when Google announced plans in July to buy ITA for a reported $700 million.

Google says the proposed acquisition—which is still being reviewed by antitrust regulators at the Department of Justice—would allow it to innovate faster in the area of online flight search. But competitors fear the Mountain View, CA-based search giant has something more aggressive in mind, and this week they banded together to put pressure on the Justice Department to nix the deal, prompting Google to fire back in a defensive blog post.

The coalition, called FairSearch.org, is led by Seattle-based Expedia (which also owns TripAdvisor), Farelogix, Hotwire (a sister company to Expedia within IAC/InteractiveCorp), Kayak (which owns SideStep), and Sabre Holdings (which runs Travelocity). This week the group launched a website and blog arguing that a Google-ITA combination would give the search company too much power over the way consumers find the best air travel deals. “No one company should be allowed to use its dominance to foreclose competitors from the search marketplace,” argues the site, which includes Facebook and Twitter buttons designed to spark a viral uprising against the proposed merger.

In addition to the online campaign, the FairSearch companies are also meeting with members of Congress to ask them to lean on regulators to prevent the takeover, according to a report yesterday in the Wall Street Journal. Expedia counsel Thomas Barnett, who blocked a proposed advertising deal between Google and Yahoo as head of the Justice Department’s antitrust division during the second Bush administration, told the Journal that if Google controlled QPX, it could give the company the ability to steer Web users “in directions that are best for Google,” which he said would “ultimately end up harming consumers.”

The Justice Department has no obligation to act on the coalition’s complaints—but regulators do take the stances of industry players into account during antitrust reviews.

Online travel planning is a huge business, accounting for nearly 40 percent of all e-commerce in 2009. About one-third of people beginning a travel-related search start with Google. ITA says that about 65 percent of all online ticket sales by airlines, meanwhile, involve a search using QPX.

The members of the FairSearch coalition argue that if Google is allowed to acquire ITA, it could withhold QPX from rivals or offer a degraded version, or use its dominant position in search and search-related advertising to … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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