A handful of companies in the online travel industry, including Microsoft, Kayak, and Expedia, are arguing that Google‘s pending $700 million acquisition of ITA should be blocked on antitrust grounds, The Wall Street Journal reports.The most interesting thing about this report is who the Journal doesn’t mention, in particular, airlines.
No matter what the merits of the deal, we would expect most of the companies the Journal cites to come out against it. Microsoft has every reason to oppose any deal that would help Google, and especially this one, since the company already licenses ITA data to power Bing Travel. Kayak probably stands to lose more than anyone; the entire point of the acquisition from Google’s perspective would be to allow the company to deliver relevant, actionable search results to customers looking to purchase plane tickets, making a separate travel search service unnecessary.
It’s less obvious how Airlines should react to the deal. On the one hand, if Google offers quality flight results, consumers will be fewer clicks away from paying up for plane tickets. On the other hand, as one industry analyst explained to Flightglobal, “airline yields are often built on a lack of transparency, so there is a potential downside for airlines.”
But several airlines, including American and Continental, are also ITA clients, using its data to help power their own booking systems. If there weren’t legitimate alternatives to ITA, such that this deal would let Google extract unreasonable fees after this deal, these airlines would presumably be concerned.
So far, however, airlines — including ITA clients — have been supportive of the deal.
It’s never a good idea to take corporate statements on these cases at face value — if a company didn’t have a vested interest in the outcome of a regulatory decision like this, it wouldn’t bother commenting on it. But objections from Microsoft and Kayak are particularly suspect here, since this hurts them irrespective of any legitimate anti-trust concerns. The airlines’ interest in this appears more closely tied to whether there is actually something anti-competitive about the deal.
So far, they aren’t concerned.
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