The US Department of Justice has given Google’s takeover of air-fare distribution company ITA Software the go-ahead.
Google wins go-ahead for ITA acquisition
The US Department of Justice has given Google’s takeover of air-fare distribution company ITA Software the go-ahead.
The Department of Justice (DoJ) gave the green light to Google’s $700 million (£440 million) acquisition on Friday, subject to conditions. The deal, announced last July, will make Google a key player in the online travel, giving it control of the technology behind the reservations systems of most US airlines and fare comparison sites such as TripAdvisor and Kayak.
However, the decision is likely to trigger immediate demands from global distribution systems (GDSs) for rules governing GDS activity to be extended to Google.
The judgment requires Google to license ITA software to rival companies on “reasonable commercial terms” and to continue to invest in upgrading the software “at least at similar levels to what ITS invested in recent years”.
Google will also be required to offer ITA’s next generation InstaSearch software to other websites and be prevented from “entering into agreements with airlines that would restrict the airlines’ right to share seat and booking class information with Google’s competitors”. In addition, the ruling prohibits Google from accessing the data or technology of ITA customers.
Travel Weekly reported a go-ahead for the deal was imminent last month, turning Google into a major distributor of air fares and leading to demands for revised GDS regulations.
Christoph Klenner, executive secretary of the European Technology and Travel Services Association (ETTSA), said: “The term GDS will have to disappear from the regulations.”
In a statement on Friday, the DoJ said: “The proposed settlement will protect competition for airfare comparison and booking websites and ensure those websites using ITA software will be able to power their websites to compete against any airfare website Google may introduce.”
The department added: “The acquisition as originally proposed would have substantially lessened competition among providers of comparative flight search websites in the US, resulting in reduced choice.”
The DoJ simultaneously filed an anti-trust lawsuit to block the acquisition and a proposed settlement that would allow it to go ahead, pending Google’s formal agreement.
DoJ Anti-Trust Division deputy attorney general Joseph Wayland said: “The proposed remedy promotes robust competition for airfare websites by ensuring they will continue to have access to ITA’s pricing and shopping software.”
