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Online Travel Coalition Fights Google Deal
Deal Would Give Google Influential Flight Search Software

UPDATED: 10:36 am EDT October 27, 2010

SAN FRANCISCO -- Several leading Internet travel agencies and search engines are trying to convince U.S. government regulators to block Google Inc. from buying a technology supplier that plays an instrumental role in finding the best airline fares.

The opponents, led by Expedia Inc., have formed a coalition called FairSearch.org to fight Google Inc.'s proposed $700 million acquisition of ITA Software. Other members of the group, which was announced Tuesday, include Farelogix Inc., Kayak, which also owns SideStep; and Sabre Holdings, which owns Travelocity.

The U.S. Department of Justice is already investigating the deal, which was announced four months ago.

FairSearch argues that combining Google's dominant Internet search engine with ITA's influential flight software would stifle competition and threaten to drive up air fares. ITA's technology plays a role in most online searches for airline tickets, providing Google with the means to manipulate one of the biggest markets in electronic commerce, according to FairSearch.

The proposed deal "raises some serious concerns for travelers and the online travel industry as a whole," said Expedia CEO Dara Khosrowshahi.

To help make its case with the Justice Department, FairSearch hired Thomas Barnett, who ran the agency's antitrust division from 2005 through 2008. Before leaving the government, Barnett threatened to sue Google to block a proposed search partnership with rival Yahoo Inc. after he steered an investigation into the alliance. Google backed out of the Yahoo deal to avoid a court fight.

Google contends ITA would allow it to build better travel tools that help both consumers and the travel industry. To ease concerns that the deal could make it even more powerful, Google has pledged that it won't attempt to book airline reservations nor will it try to withhold ITA's software from other websites that already depend on the technology to find and recommend the best fares.

Those assurances have helped persuade some online travel services that Google's ITA acquisition wouldn't harm them. Priceline.com Inc., Travelport and Orbitz Worldwide Inc. have said they don't have any serious objections to the deal.

"Our reason for making this acquisition is simple: ITA will help us provide better results for our users," Andrew Silverman, a senior product manager for Google, wrote in a post on the company's website.

Google has navigated through other rigorous government inquiries to gain regulatory approval to buy online ad service DoubleClick Inc. for $3.2 billion in 2008 and mobile ad service AdMob for $681 million earlier this year.

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