Google’s entry into the online travel sector was cleared for takeoff as the US Justice Department gave the green light to its $700 million purchase of flight data company ITA Software.
The Justice Department’s anti-trust division, however, extracted a number of concessions from Google and imposed conditions on the Internet search giant to allow the controversial acquisition to go ahead. The proposed legal settlement, which will need the approval of a US District Court, requires Google to notably develop and license ITA’s travel software to other companies.
Several online travel sites, including Expedia, Kayak and Travelocity, had sought to block the Google-ITA deal, claiming it would give Google too much control over the lucrative online travel market and lead to higher prices.
The Justice Department agreed that unless modified, the acquisition “would have substantially lessened competition among providers of comparative flight search websites in the United States.”
But US deputy assistant attorney general Joseph Wayland said the proposed settlement “promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software.
“(It) assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers,” Wayland said.
ITA, a 500-person firm founded in 1996 by Massachusetts Institute of Technology
computer scientists, specializes in organizing airline data, including flight times, availability and prices. ITA flight data software is used by many US airlines and a number of leading online travel sites, including Expedia’s Hotwire and TripAdvisor, Kayak, Orbitz and Microsoft’s Bing search engine.
Under the settlement, Google agreed to let ITA customers extend their contracts into 2016 and to let new customers license ITA’s QPX software on “fair, reasonable and non-discriminatory terms” into 2016. Google also must offer ITA’s next generation InstaSearch product to the sites.
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