Q: What happens when the world’s largest search site acquires the industry’s most powerful airfare software provider?
A: No one knows—yet. But many are worried.
As we noted back in July, search engine Google is attempting to purchase ITA Software, one of the industry’s most critical travel technology companies, even though you probably have never heard of it. ITA is primarily a business-to-business entity that provides the back-end pricing and itinerary content for a range of leading travel sites, including Bing, Cheap Tickets, FareCompare, Hotwire, Kayak, and Orbitz, as well as airlines such as American, Continental, Southwest, United, and US Airways.
Currently the U.S. Department of Justice is considering whether to allow the $700 million purchase, given the potential it would have for Google to control data that are the lifeblood of competing travel sites. In August, the DOJ issued a “second request” for information from Google, indicating a widening review. However, even some opponents of the deal concede that DOJ approval ultimately seems likely, and the real fight might take place if and when the U.S. Department of Transportation decides to investigate this acquisition.
Google is being opposed by a coalition of competing travel technology companies, and both camps have responded by launching informational sites, as well as dueling cartoons.
FairSearch.org — which represents leading players such as Expedia, Hotwire, Kayak, and Travelocity—warns that a combined Google-ITA could limit “competition and innovation” and states: “If the transaction is approved, consumers should expect to face higher prices and less choice when searching for travel online.”
For its part, Google denies such claims and states the acquisition will benefit consumers and travel firms and will not alter existing market shares in the travel technology field. The company adds: “Google will honor all existing agreements, and we’re also enthusiastic about adding new partners.”
However, Consumers Union is concerned with the effect of the merger beyond the terms of those agreements. Specifically, we are 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.
Consumers Union has a long history of investigating online travel bias issues, particularly through the Consumer Reports WebWatch project, and we advocate greater transparency for consumers faced with online travel choices.
Consumers seeking to take action can visit the FairSearch site for further details.
— William J. McGee