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Google could face legal action for ITA Software acquisition

Google-ITALast summer, Google made moves to acquire ITA Software, which makes the software that dozens of airlines and ticket sites use to make online reservations. Naturally, competitors took issue with the deal, and responded by creating FairSearch, to lobby the public and Department of Justice into stopping Google’s travel search scheme.

Yesterday, Bloomberg reported that Google may have an antitrust lawsuit courtesy of the US Justice Department on its hands. “According to people familiar with the situation,” it hasn’t been decided whether the government will block the $700 million dollar acquisition, or sue Google for it.

When rumblings of government intervention first started surfacing, Google’s legal team decided to try its luck and invoke  federal law that demands the Justice Department decide in 30 days whether or not it will take action against a deal. According to the Washington Post, Google feels it has sufficiently cooperated with government investigators, which has potentially set the stage for a court case. Bloomberg also reports government lawyers cancelled plans over the holidays to work on a case against the search titan.

Google is standing by its original statement, claiming the ITA deal will not result in squashing competitors. “While we continue to cooperate with the Justine Department’s review, we are ultimately confident that this acquisition will increase competition,” a Google spokesman told Bloomberg. In fact, Google has pledged that if it does acquire ITA, it will distribute ITA software to its competitors, which include Microsoft, Expedia, Orbitz, Kayak, and Travelocity, among others.

Google has consistently been challenged on its acquisitions, particularly in the last year. The company seemingly went on a shopping spree, scooping up companies like AdMob and DoubleClick. Despite consumer complaints, international scrutiny, and FTC investigations, Google walked away with both. It’s liable to this time as well: The Washington Post points out that the government has traditionally been wary of blocking acquisitions between non-competitors, which Google and ITA are (according to anti-trust experts). In lieu of a full-blown court case, it’s more likely Google will see a slap on the wrist and increased restrictions or government surveillance over the deal.

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