On the Google-ITA Software deal, is it Department of Justice decision time yet?
Estimating when a decision will come down is a hazardous occupation.
The DOJ requested additional information about the Google-ITA Software deal in late August, and Google declines to state if all of the paperwork has been turned in.
Generally, under the Hart-Scott-Rodino Act, once DOJ certifies that a request for information has been completed, then it has 30 days to approve the deal or sue to block it — unless the scrutinized company, in this case Google, agrees to extend the process.
It’s already been more than five months since the proposed deal was announced, and more than three since DOJ requested additional information.
So, if Google completed its submissions well before Thanksgiving, then DOJ could in theory decide the whole thing before the end of the year.
If it’s any guide, Google’s acquisition of AdMob closed in May 2010, Â a little less than seven months after the deal was announced, and the DoubleClick acquisition took a whopping 11 months to complete.
So a Christmas gift or lump of coal for Google, ITA Software and the opposition coalition, FairSearch.org, is a possibility, but the review may extend into 2011.
Speaking of coal, FairSearch published a letter last week from Sen. Herb Kohl, chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, asking the DOJ to conduct a “careful review” of the deal out of anti-competition concerns.
FairSearch obviously views the letter as a positive event in its anti-acquisition campaign and Kohl’s statement got a lot of press.
However, Kohl writes lots of these sorts of letters to the DOJ or Federal Trade Commission and if opponents hoped the senator would urge regulatory authorities to block the deal outright, as he did with the proposed XM Satellite Radio-Sirius Satellite Radio merger, they didn’t get it.
In addition to this month’s letter to the DOJ about Google-ITA, Kohl urged the Federal Trade Commission in April 2010 to carefully review Google’s acquisition of AdMob. The deal closed at the end of May.
In October 2008, Kohl urged DOJ to “closely examine” the Google-Yahoo advertising agreement, which the companies eventually dropped in the face of DOJ opposition.
In November 2007, Senators Orrin Hatch and Kohl penned a letter to the FTC asking it to probe Google’s acquisition of DoubleClick. That merger closed in March 2008.
Kohl actually did not oppose Google’s acquisitions of ITA Software, DoubleClick or AdMob, nor did he come out against  the Yahoo-Google advertising agreement. In all of these matters, he expressed concerns.
In the Google-ITA matter, Kohl urged DOJ to condition any approval by barring “Google from selling search positioning or otherwise biasing its air travel search results in a commercially motivated way.”
Kohl also urged DOJ to obtain a consent decree that would ensure that Google’s statements that it would honor ITA Software’s existing contracts “is enforceable and implemented in good faith.”
FairSearch’s stated position is to go for the knockout blow and urge DOJ to kill the deal. Any conditions that the DOJ would tie to the deal, in FairSearch’s view, would be ineffective and difficult to enforce.
Some supporters of the Google-ITA Software deal believe FairSearch members Expedia, Kayak, Travelocity and Farelogix would quietly be somewhat pleased if DOJ delivered a Christmas gift, placing some stiff conditions on approval of the acquisition.
To that, FairSearch members undoubtedly would reply: Bah Humbug.
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If you are cynical – you will surmise from this article that the Hon. Senator from Wisconsin is a toothless tiger.
I believe the issue is being clouded not by the individual merits of the case but rather by whether or not Google’s power should be curtailed.
So far I have not seen anyone put forward a strong reasoned argument that says the Google’s ITA acquisition is against a specific body of US law. The closest argument has been quoting the Clayton Act of 1914 itself an extension of the Sherman Act of 1890 on which all US anti-trust/monopoly law is based. Indeed as Dennis cited the other examples that the US Government (DoJ/FTX et al) approved – DoubleClick and Admob would have qualified far more easily than this ITA deal does if one applies the common Clayton/Sherman tests.
Thus the key question is whether the Administration draws a line in the sand now. That is indeed the tactic that everyone else seems to want to propose. But be careful for what you wish. The reverberation if the deal would be disallowed would be lawsuit city.
While I don’t like the deal personally as I feel like many others that the deal provides more power to Google’s already considerable influence over the travel category – it doesn’t matter what I think. It only matters if the deal breaks a law.
Cheers
alright already! any chance of getting someone from the DOJ to leak the results to wikileaks?