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Gov’t To Okay Google-ITA Deal After Google Agrees To Burdensome Conditions
The Justice Department (DOJ) has signed off on the Google acquisition of travel software company ITA, but says Google must meet certain conditions. The Justice Department said that as originally proposed the acquisition would have “substantially lessened competition among providers of comparative flight search websites in the United States.”
The DOJ is requiring Google to do a number of things if it wishes to proceed with the ITA acquisition:
Google will be required to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms. QPX conducts searches for air travel fares, schedules and availability. Google will also be required to continue to fund research and development of that product at least at similar levels to what ITA has invested in recent years. Google will also be required to further develop and offer ITA’s next generation InstaSearch product to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries. InstaSearch is currently not commercially available, but is in development by ITA.
In other words, Google must effectively operate ITA as though the acquisition had not been made: continue software development and continue to license the platform to competitors. The proposed settlement also restricts how Google might use information it obtains from its operation of ITA:
To prevent abuse of commercially sensitive information, Google will be required to implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA’s customers. The proposed settlement delineates when and for what purpose that data may be used by Google. Google is also prohibited from entering into agreements with airlines that would inappropriately restrict the airlines’ right to share seat and booking class information with Google’s competitors.
Beyond this, there will also be an enforcement mechanism to ensure that Google complies with the above and doesn’t do anything “unfair” with ITA:
The department said that Google will also be required to provide mandatory arbitration under certain circumstances and provide for a formal reporting mechanism for complainants if Google acts in an unfair manner.
It’s now Google’s move. The company could simply walk away from the acquisition or it could accept the DOJ’s settlement terms or fight the litigation.
You can also read the full DOJ statement here.
Postscript: According to a Google blog post, ITA Software acquisition cleared for take off, Google is planning to comply with all the requirements set forth by the DOJ’s statement, and license the software under fair and reasonable terms through 2016.