Google clears Justice Dept. hurdle in ITA buy; FTC antitrust action in focus

  on April 11 2011 1:21 AM

The U.S. Justice Department approved Google's (GOOG) planned acquisition of online travel software firm ITA, but it made the technology giant agree to several conditions and concessions.

Even as the Justice Department concluded its months-long review of Google's purchase of Massachusetts-based ITA, the focus now has turned to the possibility of the Federal Trade Commission (FTC) initiating an expansive antitrust investigation into Google to see if the company is stifling competition and getting into too many market places.

Most important among the concessions given away by Google to complete its $700 million deal to buy ITA was the decision to let other companies license ITA travel software through 2016.

Other terms include a clause under which existing ITA customers can extend their contract into 2016 and the binding on Google to provide ITA's InstaSearch software to customers. Under the terms of the legal settlement with the Dept. of Justice, Google will not be able to sign pacts with any airline which would prevent the airline from sharing information regarding seats and bookings with its competitors.

The Department of Justice said the modifications agreed by Google will ensure that competition among providers of comparative flight search websites will remain robust. The deal promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA's pricing and shopping software,” the department said.

Critics have, however, said the deal to let Google buy ITA will still threaten competition. Consumer Watchdog, a critic of the deal, said as per the deal, Google will ultimately win control of the travel search industry, driving ticket prices up for consumers.

FTC's watch

Even as Google cleared a major hurdle in its quest to take the acquisition route to expand business into varied market places, the focus now will turn to speculation over a Federal Trade Commission probe into the company.

Bloomberg reported last week that the FTC was looking into the possibility of initiating a broad antitrust investigation into Google's dominance of the Internet-search industry, quoting sources familiar with the issue.

The news agency quoted Keith Hylton, an antitrust law professor at Boston University School of Law, as saying that the proposed FTC probe “could be on par” with the scope of the Justice Department’s probe of Microsoft Corp. (MSFT) a decade ago.

The report also pointed out that FTC Commissioner Thomas Rosch said last month he would support a probe of the dominant players in the Internet-search industry. Rosch hadn’t particularly mentioned Google though.

Google is already facing antitrust investigation in a few U.S. states, and a similar probe by the European Commission.

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