Discover what's up in the business of marketing each Friday.
OTA Coalition Forms, Calls Google+ITA Deal A Threat To Consumers And Competition
Last week, it was announced that FairSearch.org was formed by a group of travel and technology businesses, including Expedia Inc. ( Expedia.com, Hotwire , TripAdvisor), Farelogix, KAYAK.com and SideStep; and Sabre Holdings, owners of Travelocity to lobby against Google’s acquisition of ITA software (for $700 million) which provides data to a number of top travel websites, including Bing Travel (Farecast).
Speculation worried the travel industry for months leading up to the formal announcement on July 1, 2010, and ever since then, Google’s Acquisition of ITA has been highly scrutinized by industry insiders.
Constantly a topic of conversation at travel industry conferences (Google’s Director of Travel Rob Torres was not surprisingly tight-lipped at a recent EyeForTravel conference) and with the industry’s annual powerhouse event, PhocusWright Conference in Phoenix next week, the formation of the FairSearch organization should provide even more fuel for the fire.
What we know though, for the moment, is that the DOJ is actively engaged in a thorough review of the deal to determine the potential antitrust issues.
FairSearch is putting a lot of effort into making its voice heard, arguing that consumers stand to lose the most when search results can be manipulated to favor backroom partnership deals and transparency should lead to more choices (and savings) for travel consumers. Another major point of contention is that this deal would smother innovation among travel technology companies. FairSearch summarized its key points in a PDF factsheet noting the competitive threats in a Google+ITA deal.
The Google Public Policy Blog did post a statement in response the group’s launch, providing a fact sheet on why Google’s best travel answers are “fair and square’ for users, pointing out there will still be consumer choice: “ITA does not set ticket prices or sell tickets, but merely analyzes data about seat availability and fares — which are set by airlines — and provides that analysis to websites.”
Google also maintains that this deal will lead to greater innovation in travel search, since they have the core competencies and resources needed to improve upon ITA’s existing technology, which was applauded by travel guru Arthur Frommer back in July and Google was quick to point that endorsement out in the public policy blog post.
While Frommer certainly has a point, most travel technology is reasonably poor – Google is one of the few companies in a decent position to actually fix some of the legacy issues – but just because they can, doesn’t mean they should.
Meanwhile, the FairSearch coalition unveiled the “Meet Bob” cartoon to show Google’s impact on consumers:
There’s even a creepy-Schmidt reference, in addition to a number of implications this integration could have on advertising revenue.