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US Justice Department looking into Google’ plan to become hub of online travel

Wednesday, February 16th 2011 - 19:25 UTC
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Google has offered 700 million US dollars for top airline fare tracker ITA Software Google has offered 700 million US dollars for top airline fare tracker ITA Software

Google wants to become the hub of online travel, promising better bargains and more convenience by melding the internet search leader's capability with the web's top airline-fare tracker, ITA Software.

The plan has existing online travel sites such as Kayak, Expedia andTravelocity worried that they will not stand a chance of competing, a scenario that could lead to higher fares.

The US Justice Department is expected to decide soon on whether to let Google buy ITA for 700 million dollars. The deal would give Google control over software that has helped power the reservation systems of most major US airlines and a fleet of online fare-comparison services for the past decade.

The US government review could serve as a test of how aggressively US antitrust regulators intend to police Google as the company uses the wealth and influence gained from its dominance in internet search to expand into other lucrative markets.

The US market for online travel bookings totals about 80 billion dollars annually, according to Forrester Research.

Google says owning ITA, the brainchild of computer scientists specialising in artificial intelligence at the Massachusetts Institute of Technology, would lead to lower prices and more convenient ways to shop for tickets on the internet.

For instance, travellers might tell Google how much they could afford to spend to visit a warm place on certain dates, and the search engine would turn into a travel guide.

But critics contend that Google would be able to hobble other travel services by burying them in its search results or denying them ITA's latest technical innovations. Google so far has only promised to honour all of ITA's current contracts, which expire over the next few years.

“Google will have leverage over the entire online flight industry” said Thomas Barnett, a former leader of the Justice Department's antitrust division. Now an attorney in private practice, Barnett represents Expedia, which has banded with such online travel services as Microsoft's Bing, Travelocity, Kayak Software and Farelogix to oppose the ITA deal.

Categories: Tourism, International.

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