Posts Tagged ‘google merger’

Google, DOJ square off on acquisition

Monday, February 28th, 2011 by Vbhotla

The Department of Justice has some concerns about a pending merger between internet giant Google and ITA, a flight information software company.  Google announced the acquisition July 1, 2010.  Initial reactions around the business community were that the deal merely increased Google’s business; it did not threaten the existence of other travel sites. But members of FairSearch.org, an organization comprised of top internet travel sites, including Expedia, Hotwire, TripAdvisor, Kayak, fear that Google may try to leverage its dominance in the internet search industry to promote its product, thereby damaging their own.

The Department of Justice is threatening to block the merger, and the parties are in negotiations.  Insiders are unable to predict whether a deal is within days or whether it will fall apart completely.  Google spent nearly $12 million on in-house lobbying around anti-trust, privacy, and competition among other issues between 2008-2010.  The company spent an additional $5.4 million on retained firms over the same time period.

Though Google contends that it does not intend to set prices or sell tickets, and that its acquisition will make airfare searches easier and drive “more potential customers to airlines’ and online travel agencies’ websites,” Bing, which is in direct competition with Google, relies on the software for its travel site as well.

Sen. Herb Kohl (D-Wis.) wrote to Attorney General Christine A. Varney last year from his position on the Antitrust subcommittee to outline concerns over competition and antitrust issues raised by the acquisition, and saying it “warrants a careful review.”  Consumer Reports said it is “concerned that the Google-ITA acquisition has the potential to limit consumer choice in the already complex marketplace of online travel, particularly after such a deal were to be finalized.”