- Associated Press - Friday, April 8, 2011

WASHINGTON (AP) - Google Inc. won government clearance with restrictions Friday for its $700 million purchase of airline fare tracker ITA Software in a deal that will give the Internet search giant a key role in online travel.

Google promises to give consumers more choices and better ways to search for plane tickets as it incorporates ITA technology, which powers the reservation systems of most major U.S. airlines and many popular online fare-comparison services, including Kayak, TripAdvisor and Hotwire.

The company had to accept significant conditions, though, in a sign that federal antitrust officials are becoming more concerned about whether Google’s enormous clout as a major gateway to the Internet has the potential to stifle competition broadly online.

As Google expands far beyond its core search business into specialized markets such as travel, companies operating in all corners of the Web _ and government regulators as far away as Europe _ are taking notice.


Rivals and regulators alike are worried that Google could use its control over the Internet’s dominant search engine to extend its monopoly into travel and other markets by steering users to its own sites and services and burying links to rivals far down in its search results. Indeed, Google’s search results already highlight some of its own specialized services, including mapping, video and finance.

Although Justice Department officials did not tackle that danger outright Friday, they laid the groundwork for a potential government investigation into manipulation of Internet search results. Google agreed to ongoing federal monitoring of its behavior to win government approval.

“They clearly decided that they want to keep an eye on Google,” said Thomas Barnett, an attorney who represents Expedia Inc., which opposed the ITA deal in a coalition with other online travel services including Microsoft Corp.’s Bing, Travelocity, Kayak Software Corp. and Farelogix Inc. Expedia owns TripAdvisor and Hotwire services.

“The ability to use search dominance to exclude competitors is not unique to travel,” added Barnett, who was head of the Justice Department’s antitrust division when it threatened a lawsuit to block Google from entering into a search partnership with Yahoo Inc. in 2008.

The agreement with the Justice Department comes at a time of mounting government scrutiny of Google’s behavior in Washington and beyond.

The European Commission and the Texas attorney general are looking into whether Google manipulates search results to extend its monopoly into other online businesses. The European investigation started after competitors _ U.K.-based price comparison site Foundem, French legal search engine ejustice.fr and Microsoft-owned shopping site Ciao _ complained that their services were being buried in Google searches. The Senate Judiciary Committee’s antitrust subcommittee also is investigating whether Google gives its services favorable treatment in search results.

In addition, a federal judge last month rejected a proposed legal settlement that would have given Google the digital rights to millions of out-of-print books after determining that the agreement would have violated U.S. copyright laws and given Google’s already-dominant search engine an unfair advantage over its rivals.

And just last week, the Federal Trade Commission announced a landmark agreement with Google to settle charges that it deceived users and violated its own privacy policy when it launched a social networking service called Buzz last year. The settlement requires Google to adopt a comprehensive privacy program and submit to independent audits of that program every other year for the next 20 years.

Eric Goldman, academic director of the High Tech Law Institute at the Santa Clara University School of Law in Silicon Valley, said the agreements with Justice and the FTC “collectively indicate that the U.S. government has more and more hooks into Google and is subjecting Google to greater oversight and reduced operational freedom.”

Nonetheless, Friday’s approval by the Justice Department makes ITA the latest major deal that Google has managed to clear with Washington. Other big purchases include the 2007 acquisition of Internet advertising network DoubleClick and last year’s purchase of mobile ad service AdMob, both of which were approved by the FTC without any conditions.

Google has said it wants to use ITA to improve its search results for travel and doesn’t plan to sell airline tickets or book other travel arrangements on its own site. Rather, ITA would enable the company to command higher ad rates from airlines, hotels, rental car agencies and other leisure services trying to reach travelers.

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