Are Google's anti-trust talks with DoJ over ITA Software acquisition in jeopardy?

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Professional conspiracy theorist Glenn Beck might want to go back to his chalkboard regarding his dark theory that search giant Google is in bed with the U.S. government.

According to Politico, Google's negotiations with the U.S. Department of Justice over its proposed $700 million acquisition of ITA Software aren't going well:

(Also see: Google, Justice Department in talks over ITA deal)

The Justice Department has made it clear to Google that it’s willing to go to court to block its acquisition of travel software-maker ITA – and Google has responded by stepping up negotiations to save the deal, a source familiar with the talks tells POLITICO.

Sources say that a deal between Google and DOJ’s antitrust lawyers could be “days away,” but others also warn that negotiations about the $700 million acquisition could fall apart at any time.

ITA is the dominant software player in the online air-travel industry, booking nearly two-thirds of web-based flight bookings, so getting the green light would put Google in a powerful position within yet another online sector. The deal, announced last July 1, immediately drew protests from online travel industry players who say the ITA purchase would give the search company an unfair advantage in the online travel industry.
Those competitors include Microsoft, Expedia (which operates TripAdvisor and Hotwire), Kayak.com, Sabre Holdings and Farelogix.

Soon after the Justice Department began asking Google questions. The search giant has insisted it has no plans to prevent those competitors from using ITA Software to power their customers' searches. Google also points out that the top three travel sites -- Expedia, Travelocity and Priceline -- don't even use ITA software.

One possible condition reportedly being discussed would require Google to license ITA software to travel sites that want to use it.

Obviously this leaked news could just be a ploy by the Justice Department to force Google to accept that condition (and perhaps others) to gain government approval for the deal.

But the real question is, what's the hang-up? If Google is balking at being required to offer ITA software licenses to travel-industry players, that would call into question the company's sincerity when it says it has no intentions to compete directly in the online travel market.

Of course, that's a simplistic theory. I'm sure the real truth can be found on Glenn Beck's chalkboard.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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