Google, ITA deal approved with conditions

By @ibtimes on

The Justice Department approved Google Inc's purchase of ticketing software company ITA Software as long as ITA's products remain available to Google's rivals, among other conditions.

The Justice Department said on Friday that Google would be required to license the software, to continue to upgrade it and to establish firewalls to protect ITA clients' intellectual property.

Google said the deal required them to license the software until 2016.

In addition, disputes between Google and the online travel websites -- for example over fees -- are to be submitted to binding arbitration, the Justice Department said.

A Justice Department official said that a potential shutdown of the government had nothing to do with the deal announced Friday, but others disagreed. They were rushing to get it done today because of that, said a source close to the deal.

Google shares were up 0.2 percent at $581.41 on the Nasdaq on Friday afternoon.

Google, the world's No. 1 Internet search engine, said in July that it would buy ITA Software for $700 million in cash. The announcement sparked concerns that travel websites such as Kayak and TripAdvisor could be deprived of ITA's software.

ITA's QPX is used by leading airlines and travel distributors like Alaska Airlines, American Airlines, Microsoft's Bing and Hotwire, among others.

The ITA buy is part of an acquisition and hiring spree as Google aims to ensure its online products stay on top as surfers go mobile and turn to services like the wildly popular Facebook.

Google said it was excited to get the deal approved, and would soon bring out a new travel search tool.

We're moving to close this acquisition as soon as possible, and then we'll start the important work of bringing our teams and products together, wrote Jeff Huber, a Google senior vice president, in a blog post.

The Justice Department was also aware that Google had an incentive to tweak search results to favor its businesses and was keeping an eye on the issue, said a Justice Department official who requested anonymity.

There were a variety of complaints about bias in search, the official said. So, while we're aware of those complaints we did not think they were relevant to this transaction.

Foundem, a British price comparison website, is one of several companies that have accused Google of manipulating results so that Foundem and other rival websites show up lower in search results. Users overwhelmingly tend to click on the first few results.

Both the Justice Department and the Federal Trade Commission, which also enforces antitrust law, are reportedly contemplating investigating Google on the issue of search fairness. European regulators are also looking in to Google's search practices.

(Reporting by Diane Bartz and Jeremy Pelofsky; Editing by Lisa Von Ahn and Matthew Lewis)

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