The following is an open letter from FairSearch, a consortium of opponents to the Google-ITA deal, to members of the U.S. Senate.
With Thanksgiving right around the corner, we are approaching the busiest travel season of the year. In fact, the Air Transport Association estimates that over 24 million Americans will be flying for the holiday. These travellers currently benefit from a robust online air travel marketplace in which people shopping for flights can obtain accurate, up-to-date information about schedules and fare options. Unfortunately, a proposal currently under review by the Justice Department could put the health of this marketplace at risk.
Google now dominates the market for general online searches and search advertising with a share of more than 70%. While Google already is a leading provider of online travel search, travel search is one of the few areas where other companies have been able to compete effectively. Companies such as Expedia, Kayak, Orbitz, and Travelocity revolutionised the travel industry by bringing schedule and fare information directly to consumers over the Internet. Competition among online travel sites has increased the quality of information to consumers, reduced or eliminated booking fees, and helped to keep airfares and other travel rates as low as possible by spurring competition among travel service providers, such as the airlines.
This competition is now threatened by Google’s proposed acquisition of ITA Software, the leading source of flight search technology for online travel companies. ITA runs backend flight search for 65% of U.S. sales at airline websites and the majority of flight search sites. Instead of simply licensing the ITA technology and innovating on top of it, as other travel companies have done since 2001, Google seeks to combine its power in Internet search generally with control over the key flight search technology upon which most online travel sites rely. This combination threatens to enable Google to dominate online flight and travel search, which can reduce the quality of travel information available to consumers, increase advertising costs, and result in higher airfares.
Given Google’s market power in general search and its pattern in other markets, including books, video, display advertising, mobile advertising, shopping, and maps, this deal should be subject to intense scrutiny. We believe that Google should not be allowed to enter a market in a way that simultaneously undermines the ability of other competitors to provide quality products to consumers and continue to innovate themselves.
Currently, the Justice Department is investigating Google’s proposed acquisition of ITA. For the sake of travel consumers in your state, we encourage you to protect innovation and consumer choice in online travel by calling on the Justice Department to challenge this acquisition.
Membership includes Expedia Inc., and its brands Expedia.com, Hotwire and TripAdvisor; Farelogix Inc.; KAYAK, and its brand SideStep; and Sabre Holdings, and its brand Travelocity. To learn more about the coalition, please visit www.FairSearch.org.