Justice sets terms for Google-ITA deal

The Department of Justice on Friday outlined the conditions under which it would approve Google's $700 million acquisition of the travel search firm ITA Software.

In calling for changes, Justice said the deal as initially proposed would have jeopardized competition in the market for online travel.

The settlement must be approved in federal court, but is still a huge victory for Google, which had faced pushback on the deal from travel sites and from rivals in the tech industry.   

A number of online travel firms including Expedia and Kayak, as well as Google rivals including Microsoft, had formed a coalition, dubbed FairSearch, to oppose the transaction.

Those firms hailed the settlement and urged the government to remain vigilant to ensure Google doesn't use its dominance of the search market to unfairly favor its own travel offerings.

"Today’s decision by the Justice Department to challenge Google’s acquisition of ITA Software is a clear win for consumers," FairSearch said in a statement.

"While this enforcement action is an important victory, Google's abuse of its search dominance still threatens competition and consumers in many critical areas of online services."

Google has maintained its goal for the ITA acquisition is to improve the quality of airfare Web searches and to drive traffic to other sites, not take over the online travel market. 

The settlement paves the way for Google to complete the transaction so long as it agrees to continue to develop and license ITA's airfare search software to online travel sites and airlines. Google must also submit to regular reviews of its conduct in the online travel market.

“The Department of Justice’s proposed remedy promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software,” said Joseph Wayland, deputy assistant attorney general of the antitrust division.

“The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”

The complaint makes it clear DoJ has serious antitrust concerns about Google's entry into the online travel market. The settlement requires the search giant to establish firewalls to ensure Google doesn't access competitors' sensitive information through their contact with ITA.

The agreement also establishes reporting and arbitration mechanisms to handle complaints if Google acts in an unfair manner. Google senior vice president Juff Huber said the firm is eager to move forward and improve flight search results for consumers.

"We indicated last July that we would honor ITA’s existing contracts. Today we’ve formally committed to let ITA’s customers extend their contracts into 2016," Huber said.

"We've also agreed to let both current and new customers license ITA’s QPX software on 'fair, reasonable and non-discriminatory terms' into 2016 — along with related commitments aimed at making ITA’s technology available to other travel sites."

This story was updated at 2:26 p.m.