U.S. DOJ announces proposed settlement concerning Google acquisition of ITA

On 8 April 2011, the U.S. Department of Justice (“DOJ”) announced a proposed settlement concerning the acquisition by Google Inc. (“Google”) of ITA Software, Inc. (“ITA”). ITA is the leading producer of airfare pricing and shopping systems with its QPX software that powers various flight search services offered by online travel intermediaries (online travel agents and travel meta-search engines).

According to the DOJ, the acquisition of ITA would give Google the means and incentive to foreclose or disadvantage its prospective comparative flight search rivals by denying or degrading the rivals’ access to QPX, which would by reducing choice and innovation ultimately harm consumers of comparative flights search services.

In order to ensure that online travel intermediaries that use the ITA’s QPX software will be able to compete against any airfare website Google may introduce, the proposed settlement seeks to ensure that online travel intermediaries continue to have access to QPX. To that end, under the proposed settlement Google will be required to license the QPX software to airfare website on existing terms to current licensees and on fair, reasonable, and non-discriminatory terms to new licensees.

The settlement also aims to ensure that Google continues to develop QPX after the acquisition. Google will be required to make available ordinary upgrades to QPX at same price to all its customers and is required to fund research and development of the QPX software at similar levels as done by ITA in recent years. Google will also be required to offer ITA’s yet commercially unavailable next generation InstaSearch product to online travel intermediaries.

Finally, the proposed settlement also, in particular, establishes a mechanism for reporting to the DOJ complaints that Google violates the settlement or treats online travel intermediaries in an unfair manner in connection with flight search advertising. This brings an aspect of Google’s search advertising services under DOJ’s antitrust oversight. [Juha Vesala]

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