Inside Google

The US Department of Justice says Google won’t be able to move forward with its acquisition of airline software maker ITA Software unless it agrees to a set of rules designed to ensure continued competition in the market. The rules come as part of the DoJ’s proposed settlement for the antitrust suit it filed against Google, but if Google agrees to the terms, the DoJ says its competition concerns will be resolved. Competitors, while somewhat pleased, still want more scrutiny.

Under the proposed settlement, Google must continue licensing ITA’s popular QPX software to airfare sites at “commercially reasonable terms,” while also continuing research and development of QPX at a similar rate as ITA has. Google can’t restrict airlines from sharing seat or booking class information with Google’s competitors, and must set up a reporting mechanism for complaints about Google’s behavior once it assumes control of ITA.

The terms go beyond just offering competitors a fair slice of the pie, too. Google must also implement some extra security practices in order to ensure that unauthorized parties cannot access sensitive competitive data or information gathered from ITA customers. And the company must commit to finishing up and releasing ITA’s new InstaSearch tool, which is expected to provide “instantaneous” results on certain types of queries.

These are all concerns that cropped up when Google first announced its intention to buy ITA in July 2010. At the time, Google insisted that it would honor all existing agreements with ITA’s licensees, adding that

the company was “enthusiastic about adding new partners.” It wasn’t long before the Federal Trade Commission and the DoJ began an antitrust investigation, especially after competitors like Expedia and Travelocity expressed concerns that Google was toeing “the creepy line” with the acquisition.

FairSearch, a group of companies that formed

in October to oppose the deal, appears to support the DoJ’s conditions, describing them as a “win for consumers.” The group said that Google’s dominance in the search market still needs to be addressed, though, leaving room for further action.

“By putting in place strong, ongoing oversight and enforcement tools, the Department has ensured that consumers will continue to benefit from vibrant competition and innovation in travel search,” the company said in a statement. “While this enforcement action is an important victory, Google’s abuse of its search dominance still threatens competition and consumers in many critical areas of online services. Antitrust enforcers and lawmakers in the US and elsewhere must remain vigilant in their investigation of these larger concerns and take whatever further enforcement actions are needed to protect consumers.”

Consumer Watchdog and the Association for Competitive Technology (ACT) both expressed measured confidence about the proposal as well. Consumer Watchdog said the DoJ’s conditions would “focus unprecedented and necessary regulatory scrutiny on the Internet giant,” but that even with the rules in place, Google could still drive up ticket prices due to its dominance in search.

ACT President Jonathan Zuck seemed to agree. “The Justice Department has yet to address Google’s admitted manipulation of search results,” he said, “but we are cautiously optimistic that antirust regulators will continue to look into Google’s anticompetitive practices.”