Google Inc may face an antitrust lawsuit by the US Department of Justice over its US$700 million acquisition of ITA Software Inc, people familiar with the situation said.
Department officials haven’t made a final decision about whether to sue to block the purchase by Google, owner of the world’s most popular search engine, said the people, who requested anonymity because the agency discussions are confidential.
Google announced in July its plans to acquire ITA, which provides online airline flight and ticket information. The next month, government lawyers said they were extending their ITA investigation.
Google triggered preparation for the government’s possible lawsuit last month by invoking a provision of federal law that forces the government to decide within 30 days whether to challenge the deal, the people said.
In bringing the matter to a head, they said, Google prompted the department’s lawyers to cancel Christmas holiday plans and put together a case.
“It could be Google did that because things are not moving forward,” Andrew Gavil, a law professor at Howard University in Washington, said in an interview. “As a business matter, it can be very difficult” to manage an acquisition if there is a probe.
Gavil, who said he has no direct knowledge of the progress of the investigation, received funding from Google for research unrelated to the ITA acquisition.
A group of software and online travel companies — including Microsoft Corp, Expedia Inc and Sabre Holdings Corp’s Travelocity — has been leading opposition to the acquisition. They helped form FairSearch.org to highlight concerns that Google would prevent others from using ITA’s technology.
Google spokesman Adam Kovacevich declined to comment on the deadline or the department’s preparation.
“While we continue to cooperate with the Justice Department’s review, we are ultimately confident that this acquisition will increase competition,” he said in an e-mail.
In an e-mail, Gina Talamona, a department spokeswoman, declined to comment because the matter is pending.
Both parties can negotiate an extension of the 30-day deadline under federal law.
“I believe the Google-ITA deal is uncompetitive and should be challenged,” said Pamela Jones Harbour, a former member of the US Federal Trade Commission who dissented in 2007 from its decision to let Google buy DoubleClick Inc, an online advertising company.
“It’s a dominant firm expanding in an adjacent market by acquiring ITA, and the effect would be to dominate flight search,” she said.
Harbour is a partner in Fulbright & Jaworski LLP’s antitrust and competition practice, with offices in Washington and New York City.
Google has said it will continue to license the ITA software to third parties after the acquisition is complete.
Online travel agencies Priceline.com Inc and Orbitz have been supportive of the deal, which Google said would allow it to display flight times and prices in search results, much as Microsoft Corp’s Bing search engine is already doing.
The American Consumer Institute Center for Citizen Research, a Washington-based nonprofit that describes itself on its Web site as an educational and research group, said in a statement that it is “encouraged” by reports of a possible lawsuit.
“Google’s acquisition of ITA would give it dominant control of online travel search, which would lead to less choice and higher prices for consumers,” institute president Steve Pociask said in an e-mailed statement.
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