FairSearch, the coalition opposed to Google’s acquisition of ITA Software, questions whether Google’s treatment of Kayak amounts to retribution against a competitor which has questioned Google’s market power.
A FairSearch blog post on the topic follows the news Feb. 7 that ITA Software agreed to extend its QPX licensing agreement with Orbitz through 2015.
FairSearch, which counts Kayak among its active members, notes that Google and ITA have declined to give Kayak assurances that it would be able to renew its licensing agreement with ITA if the acquisition goes through “at fair and reasonable terms” and that Kayak would be able to get access to “the best technology available” under such renewals.
In its public statements, Orbitz has remained neutral about the Google-ITA Software acquisition deal, FairSearch says.
The opposition coalition tries to explain what it sees as the disparate treatment given to Orbitz and Kayak.
FairSearch says: “Perhaps it’s because Kayak, which has a meta-search product that would compete directly with Google’s planned travel search product (don’t take our word for it, Google’s last annual report cites KAYAK as a competitor — but not Orbitz), has spoken out about Google’s power and incentive to control the market for online travel if it is allowed to acquire ITA.
“Should we take this as a sign that Google, if allowed to acquire ITA, intends to use its power in the travel market to punish competitors who question its power, and reward trusted allies? We’ll let you do the math. That’s really a question better put to Google. After all, their motto is – wait for it – “trust us” (and you thought we were going to say ‘don’t be evil.’)”
On the ITA-Orbitz renewal, FairSearch cites the Orbitz statement that “ITA will provide the Company with access to the most up-to-date functionality related to QPX that ITA makes generally available to all of its customers [FairSearch emphasis].”
FairSearch argues that this “reinforces concerns that Google will be able to keep the best innovations to ITA technology to itself.”
In response to FairSearch’s charges, Google rejects the notion that it is retaliating against Kayak.
“Kayak itself disclosed in its SEC filing that its current contract with ITA doesn’t expire until December 2013, and we have pledged to honor all of ITA’s existing contracts,” says Google spokesman Adam Kovacevich. “Orbitz’ renewal of its ITA contract is a vote of confidence in that commitment. When contracts are up for renewal after the acquisition closes, we will treat all licensees fairly, and any claims that a company’s position on this deal would affect negotiations are categorically false.”
Kovacevich emphasizes that ITA isn’t the only game in town.
“Furthermore, though Orbitz renewed its contract with ITA, it acknowledged publicly last November that it has alternatives to ITA and didn’t feel locked into using ITA,” Kovacevich says. “In fact, many of the leading online travel agencies — including the top three trafficked sites, Expedia, Travelocity and Priceline – seem to be doing just fine without using ITA.”
Of course, although Expedia.com doesn’t use ITA’s QPX solution, sister sites TripAdvisor and Hotwire do.
For its part, ITA spokeswoman Cara Kretz declined to comment on the company’s Kayak relationship, saying ITA’s policy is ”not to discuss or comment on specific customer’s terms or arrangements.”
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It should be noted that the ITA/Orbitz agreement is not the only agreement ITA has entered into since the Google/ITA merger was announced (US Airways, AA, Hipmunk, etc.).
Unfortunately no details regarding the rumored Kayak negotiations are provided; I highly doubt that Kayak was unsuccessful (if indeed it negotiated) because of its relationship with fairsearch.