No Fly Zone? DOJ Eyes Google's Proposed Deal For ITA


Google's planned acquisition of airline travel software developer ITA Software will be delayed while the U.S. Department of Justice reviews the deal for possible antitrust issues.

Late Friday Google acknowledged that it had received a request from the DOJ for more information about the planned $700 million acquisition, which Google disclosed July 1.

"While this means we won't be closing the deal right away, we're confident that the DOJ will conclude that online travel will remain competitive after this acquisition closes," wrote Andrew Silverman, Google senior product manager, in a blog posted Friday called "An update on our ITA Software acquisition."

ITA, founded in 1996, develops a customizable flight data organization tool that's used by airlines and travel agents. ITA's software is used by American Airlines, Continental Airlines, Hotwire, Kayak, Orbitz and Microsoft's Bing, among others.

At the time of the acquisition announcement Google said it would use ITA's technology to develop new airline flight and fare search tools. Word of the planned acquisition raised speculation that Google wants to expand into the online travel business. But it also raised antitrust concerns about the Internet search giant.

Silverman, in his blog, said the DOJ had sent a "second request" for information about the acquisition, a signal that the department intends to more closely scrutinize the deal for possible anticompetitive aspects. Silverman said Google would be "working cooperatively" with the DOJ while it conducted its review.

"While we think this acquisition will benefit travelers as well as those seeking their business, we know that closer scrutiny has been one consequence of Google's success, and we said that we wouldn't be surprised if there were a regulatory review before the deal closes," the Google manager wrote.

In his blog Silverman took pains to argue that online travel companies such as Kayak and Orbitz have said that there are effective alternatives to ITA technology and that the industry would remain competitive after Google's acquisition.