When some of the leading travel companies in the US unite to voice concerns, you know something must be seriously wrong.
Big names like Expedia Inc, Kayak.com, Sabre Holdings and Farelogix have come together to voice their opposition to the proposed acquisition of ITA Software by search giant Google for a staggering $700 million. The ITA software is widely used by the online travel industry for online flight comparison.
The companies have formed a coalition called FairSearch.org and have are appealed to the US Justice Department to intervene in what they believe is a deal which will give Google too much sway over the travel sector.
The opposing companies fear that if the deal goes through Google might restrict their access to ITA’s software for flight being used on their pages and the traffic coming to their websites. And they have genuine reason for concern – currently ITA controls 65% of direct online air ticketing, while Google commands more than 30% of the search traffic to online travel sites.
FairSearch.org states that this deal goes against the two main principals of online search which it stands for:
- Transparency: Consumers – not search engines – should choose winners in the marketplace. Consumers benefit from more choices in the search marketplace competing to win users, innovating to improve products and displaying results transparently. When search providers engage in search discrimination – manipulating search results to promote a favored product and punish competitors – consumers pay the price.
- Innovation: Consumers benefit when competition in the marketplace forces companies to continue to innovate and develop the best solutions for online search. No one company should be allowed to use its dominance to foreclose competitors from the search marketplace – particularly in high-traffic specialty segments, like travel, jobs and real estate.
Expedia’s counsel, Thomas Barnett sums up the situation quite nicely: “Google has tremendous power in the search market, and it gives Google the ability to steer users in directions that are best for Google. All of that would ultimately end up harming consumers.”
If this deal does go through, there are some major travel sites that could be impacted, including Expedia, Hotwire, TripAdvisor, Travelocity, SideStep and Kayak.
In its defense, Google says they proposed this deal so as to create a quick and easy way for users (who find the process of searching & comparing for online ticketing slow and cumbersome) to find and compare flight information under one roof. The company has no plans of selling online tickets so there is no question of posing a threat to the existing market.
Here is the official word from Adam Kovacevich, a Google spokesman:
When a user is searching on Google for a flight, we’d like to provide a more useful answer in the form of flight results, just as other search engines do today.
We plan on building flight search tools that will drive more traffic and potential customers to airlines’ and online travel agencies’ websites, and so we’ve been encouraged by the support this deal has received from the online travel industry.
When news of this deal first broke back in July, we knew Microsoft wouldn’t be happy with the deal because Bing uses the ITA software. And we weren’t wrong. Microsoft has also opposed the deal in conversations with Justice Department investigators and lawmakers.
So, it seems Google’s plans to move into the travel market might be a long way off yet.