Online travel companies unify to oppose Google/ITA deal

WASHINGTON (Reuters) - Several online travel companies are combining forces to fight search giant Google’s proposed $700 million acquisition of airline ticketing software company ITA Software Inc, saying the deal would lead to higher prices and less innovation in the travel sector.

Online travel companies Expedia Inc;; Sabre Holdings, which runs Travelocity; and Farelogix Inc formed a coalition called that is asking the Justice Department to challenge the deal, the new group said.

“ITA’s technology has made it the software provider of choice for many online players throughout the travel industry, including a number of Google’s competitors in air travel search,” said Steve Hafner, CEO and co-founder of Kayak.

Critics of the deal, such as Microsoft and others, worry that Google could limit access to ITA’s software, which powers many of the websites in the new coalition.

Google argues that since it does not compete against ITA Software, the deal will not change existing market share in the online travel industry, and notes that some in the travel industry have supported it.

“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,” said Google spokesman Adam Kovacevich.

With few exceptions -- specifically a joint venture between Google and Yahoo stopped in late 2008 -- regulators have been reluctant to challenge mergers involving software because the sector evolves so fast and has so many new entrants, said antitrust attorney Robert Doyle of the law firm Doyle, Barlow and Mazard.

“I would be somewhat reluctant to say that this deal constitutes an antitrust problem,” said Doyle.

Reporting by Sakthi Prasad and Diane Bartz; Editing by Derek Caney