Newspapers, Consumer Groups and Members of Congress Raise Concerns with Google/ITA

January 6th, 2011 | Bookmark and Share | SUBSCRIBE

Leading newspapers, consumer groups and members of Congress are voicing concerns about Google’s proposed takeover of ITA Software, the flight search technology that powers many rival travel sites, including KAYAK and Hotwire.

  • ConsumerReports.org: “Google travel deal threatens competitors—and consumers” (11/20/10)
  • Columbia’s Tim Wu in The New York Times: “[T]he risk is that this deal could give Google such an advantage that travel search becomes like other forms of search, dominated by one engine, which could eventually stifle innovation” (12/27/10)

Acquiring ITA would enable Google to manipulate and dominate the online air travel marketplace.

  • Tom Krazit, CNET: “With this deal, Google will have transformed itself into one of the biggest power brokers in the travel industry…But it is playing a game of chicken with federal regulators, daring them to conclude and then prove that Google is gaining too much control over commerce on the Internet.” (7/1/10)
  • Rick Seaney, CEO of FareCompare, in Tnooz: “If they [Google] throw their entire weight behind travel and slowly but surely figure out the secret travel sauce their reach is beyond comprehension – and that my friend is scary.” (7/2/10)
  • Henry Harteveldt, Forrester Research Analyst: “The concern: We don’t know how Google will present websites within flight results…If, for example, an airline or OTA had to pay Google-ITA a fee for its Website to be listed in that flight’s organic results, I see trouble brewing.” (7/2/10)

The result could be higher air travel prices, fewer choices and less innovation in online travel search.

  • The New York Times on Google-ITA: “This could lead to higher costs for agencies, airlines and passengers.” (12/20/10)
  • ConsumerReports.org: “The Google-ITA acquisition has the potential to limit consumer choice in the already complex marketplace of online travel…” (11/20/10)
  • Sen. Herb Kohl (D-WI): “This deal has the potential to greatly impact the robust online air travel search and booking markets relied on today by millions of consumers and it warrants a careful review by the Antitrust Division to determine whether it will substantially harm competition and consumers in the markets affected.” (12/1/10)
  • Edward Hasbrouck, Author, The Practical Nomad: “What will this deal mean for travelers? The short answer is that it is likely to be a bad thing for travelers…it is likely to exacerbate the trend toward personalized and less transparent pricing of airline tickets.” (7/12/10)

But the DOJ has the ability to protect consumers from harm and preserve competition in online travel by challenging this deal.

  • The Washington Post: “…regulators must review the deal closely to ensure that Google’s vast power and reach do not unfairly hinder others’ ability to compete or deprive consumers of innovations not yet imagined.” (1/2/11)
  • Bert Foer, President of the American Antitrust Institute in CFO Zone: “[Foer] says that [the deal] must be examined closely in terms of the precedent it can set for Google’s future ventures into software that drives other industries. He explains: ‘With every step Google takes, something essentially new is in creation, for better or worse, or for both. I am not sure that current antitrust thinking is adequate to protecting the public in this dynamic area.’” (7/13/10)