Travel search players unite to oppose Google-ITA merger
- 27 October, 2010 06:10
Major online travel players Expedia, Kayak, Sabre and Fairlogix have banded together to oppose Google's planned acquisition of ITA Software and ask the U.S. government to block it on the grounds that it will hurt competition and drive up prices.
The coalition, called FairSearch.org, argues that ITA Software's air-travel flight-information products are used too broadly by online travel players and that letting Google control that technology will give it an unfair advantage over its rivals.
Specifically, FairSearch.org wants the U.S. Department of Justice to come out against the US$700 million deal, which was announced in July.
If Google becomes the owner of ITA Software, "the end result could be higher travel prices, fewer travel choices for consumers and businesses, and less innovation in online travel search," the group said Tuesday in a statement.
Google countered with a blog post reiterating its claim that it will honor ITA Software's existing customer agreements and work to add more partners.
Google also challenged the allegation that its ITA Software acquisition will trigger higher prices, saying that the two companies don't compete, so consumer choice won't be harmed. Google also argues that since ITA Software neither sets prices nor sells tickets, but rather analyzes that data, its acquisition by Google will not increase travel costs.
"In fact, by acquiring ITA we hope to build flight comparison tools that make it easier for users to compare prices and find the best possible deal," wrote Andrew Silverman, a Google senior product manager.
Silverman also stated that Google has no plans to sell tickets directly, and is instead focused on driving traffic to airline and travel agency websites.
"We also believe that giving users better ways to search for flights online will encourage more users to make their flight purchases online, which will create more overall online sales for airlines and travel agencies," he wrote.
Google also objects to the assertion that the deal will stifle innovation in online travel search, saying that the reason it is acquiring ITA Software is precisely to improve flight search technology.
In August, Google disclosed that it had received a formal "second request" for more information about the deal from the DOJ, meaning the agency is looking more closely at the proposed merger. At the time, Google said it remained confident that the DOJ will eventually give the deal the green light.
ITA Software customers include major airlines and online travel agencies, such as American Airlines, Continental Airlines, Kayak, Orbitz, Southwest Airlines, United Airlines, US Airways, Virgin Atlantic Airways and Microsoft's Bing.
As soon as the deal was announced in July, industry observers speculated that government regulators might object to the deal for the same reasons now outlined by FairSearch.org.
The privately held ITA Software is based in Cambridge, Massachusetts, and has about 500 employees. It was founded in 1996.
Google has said that ITA Software technology will help Google improve the quality of its travel search technology. Travel-related searches are one of the most popular on Google.