Google-ITA Software deal: Major European headache surfaces

September 1, 2010 By 5 Comments

Google could be facing a series of awkward regulatory hurdles in Europe even if its acquisition of ITA Software is approved by US antitrust officials.

ITA software-google

Noises emerging this week from Brussels, home to the European Commission, suggest the search giant could be facing scrutiny from members as to whether a beefing up of its position in travel after acquiring ITA Software needs to trigger a shake up of wider regulatory powers.

The problem Google could potentially face is not around the subject of competition, as its acquisition of ITA and the travel tech company’s client base is predominantly a North American issue.

Investigators at the Commission are beginning to be concerned that Google’s dominance of the search market in Europe, coupled with how it decides to use the ITA technology, could seriously impact on consumers and their ability to compare air fares.

There are now increasing calls for the Commission to undertake a study as to whether Google should be seen in the same light as other air data firms, namely the global distribution systems.

A source who wished to remain unnamed but is well-placed in the regulatory world of Brussels, says:

“In a GDS environment, the display neutrality concept enshrined in the GDS Code of Conduct addresses this issue. If Google is going to provide services that are similar to those of GDSs, then probably safeguards similar to those in the GDS Code of Conduct should be imposed on Google.”

Such a move would be a enormous leap for those that administer the GDS Code of Conduct and how regulation of the distribution of airfare data across the continent is handled.

Placing Google alongside the GDSs (as it has done so itself with the travel technology ecosystem chart) within a regulatory framework also has the opportunity to trigger other major permutations.

The push to include Google in such a framework is considered by a number of those close to the situation to be primarily a GDS-led drive.

But Google could argue that if it is subject to such oversight by regulators then other travel search providers (B2C and B2B) should be included – a prospect likely to keep lobbyists in Brussels tied up for years.

For its part, Google remains focused on the competition element of the deal and will not address the Code of Conduct issue, saying:

“The [ITA] transaction is subject to normal pre-merger notification procedures in the United States only. ITA Software’s European revenues aren’t large enough to warrant European regulatory review.

“We think this combination will benefit travelers as well as those seeking their business, but closer scrutiny has been one consequence of our success, and on that basis we wouldn’t be surprised if there were regulatory review before the deal closes.”

An alternative and radical position could be that if commissioners decide Google is not to be included in the regulatory framework then the same powers should be relaxed for the GDSs as well.

A Travelport official says:

“Given that there are so many factors in relation to the potential Google/ITA acquisition that remain to be resolved and/or announced, it would be inappropriate for Travelport to speculate on these specific questions.”

Sabre declined to comment and Amadeus is discussing internally with its legal team how to respond.

Related posts:

  1. Google-ITA Software deal hits a snag, array of other interested parties
  2. Google-ITA Software deal: Google quietly adds new rival to travel ecosystem chart
  3. Google-ITA Software deal: Google expects Justice Department will handle inquiry
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Kevin May About Kevin May

Kevin May is editor of Tnooz. He joined as a co-founder in August 2009 after spending nearly four years as editor of UK-based business publication Travolution.

Passionate about the business of travel and the internet, Kevin played a major role in establishing Travolution in print, online, events and with an annual awards programme, as well as becoming a regular speaker and moderator at industry events.

Prior to Travolution, Kevin was web editor at Media Week (UK) and also worked in regional newspapers for two years at the Essex Enquirer. He started his career in journalism at the Police Gazette at New Scotland Yard in London.

Trackbacks

  1. Today’s Recommended Reads « Google Monitor says:
    September 1, 2010 at 5:36 pm

    [...] Google-ITA Software deal: Major European headache surfaces [...]

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  2. Google erwägt angeblich Kauf von Itasoftware says:
    September 8, 2010 at 2:30 am

    [...] ist Aber gut…. Es mehren sich die Anzeichen das der Gegenwind aus Brüssel kommen wird. Siehe Google-ITA Software deal: Major European headache surfaces | Tnooz Noises emerging this week from Brussels, home to the European Commission, suggest the search [...]

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  3. Google-ITA Software deal: Anti-deal consortium goes public | Tnooz says:
    October 26, 2010 at 4:50 am

    [...] The ramifications of the deal have also been felt across the Atlantic with Amadeus predicting European regulators are likely to look at the deal amid suggestions that Google should be held to the same oversight in the EU as the GDSs. [...]

    Reply
  4. FairSearch circles the wagons as travel execs gather in the desert | Tnooz says:
    November 15, 2010 at 9:49 am

    [...] their heads as to how all this affects them, it is worth recalling that in Europe there is genuine concern, especially within the GDSs and European Commission, as to what Google will do with ITA’s [...]

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  5. European travel firms quietly sharpen their knives over Google-ITA Software | Tnooz says:
    March 22, 2011 at 1:57 pm

    [...] 2010, as the industry started digesting Google’s proposed acquisition of ITA Software, speculation emerged that the search giant could also face issues outside of the [...]

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