WASHINGTON – The Justice Department on Friday approved a controversial deal by Google that would allow the firm to acquire a powerful travel search software firm, though with some strings attached.
Fearing a government shutdown, antitrust officials moved quickly to resolve months of negotiations with the tech giant over concerns that the acquisition could hurt competition in the travel search business.
The agreement, which establishes a formal process for firms to complain about Google’s behavior, marks the first time the company will face ongoing antitrust monitoring.
Government officials want Google to continue licensing ITA’s software to airfare websites that use the company’s technology, a group that includes Orbitz, Microsoft’s Bing and Kayak.
Google will also have to add firewalls to prevent the company from accessing inside information from ITA’s customers, which Google could use to outdo them as it launches its own travel search engine.
In addition, Google must promise to continue developing ITA’s technology at a level similar to what the software firm has pursued in the past.
Justice Department officials “clearly decided that they want to keep an eye on Google,” said Thomas Barnett, an attorney who represents Expedia Inc., which opposed the ITA deal in a coalition with other online travel services including Microsoft Corp.’s Bing, Travelocity, Kayak Software Corp. and Farelogix Inc. Expedia owns TripAdvisor and Hotwire services.
“The ability to use search dominance to exclude competitors is not unique to travel,” said Barnett, who was head of the Justice Department’s antitrust division when it threatened a lawsuit to block Google from entering into a search partnership with Yahoo Inc. in 2008.
Google announced last year it wanted to pay $700 million to acquire ITA, a firm that created the technology powering most online flight searches.
“We’re excited that the U.S. Department of Justice today approved our acquisition,” Jeff Huber, a senior vice president at Google, wrote in a blog post. “It’s important to us that ITA continue with business as usual, providing great service to its business partners.”
Opponents of the deal worried that if Google acquired ITA, it would have immense power over the online flight searches. Google says it wants to acquire ITA in order to build a superior flight search engine.
But competitors feared that Google could cut off their access to ITA’s technology, or more subtly, post its own flight search results higher because it controls the algorithm for the world’s most popular search engine.
The ITA decision comes as Google approaches a pivotal point in its relations with Washington.
Last week, the Federal Trade Commission said it was imposing regular audits on the company for violating privacy agreements with users when it released its Buzz social-networking product.
There also has been growing interest at the Justice Department and the FTC in examining Google’s power in the search market, though neither agency has launched an official inquiry.
Meanwhile, European Union antitrust officials have gone ahead with a broad investigation into Google’s dominance following complaints from other tech firms, including rival Microsoft.
Google says it understands that it will face more government scrutiny as it grows bigger. But the company argues that most of the accusations of anticompetitive behavior come not from users, who like its services, but from competitors that are not pleased with their search rankings. And that, the company, is not necessarily an antitrust problem.
“We built Google for users, not websites,” the company said in a statement.
— The Associated Press contributed to this report.
Comments are no longer available on this story