Consumers Deserve Straight Answers about Google-ITA
Google’s proposed acquisition of ITA Software raises some very important questions about the future of innovation, transparency and consumer choice in online travel search. So, it’s unfortunate that rather than address these concerns, Google has issued statement after statement attacking ITA’s customers who have raised legitimate concerns about their ability to continue to access the company’s software and real-time flight data after their existing contracts expire.
For the record, no one is worried about Google booking tickets or directly setting airline prices… But if Google is allowed to use ITA to consolidate the online travel search market, leading to higher advertising rates, those costs could get passed on to consumers in the form of higher ticket prices. Goldman Sachs and JP Morgan analysts estimate that 10 percent of Google’s global revenue already comes from the travel sector – is Google really saying it’s not already in the market for online flight search?
So let’s indeed be candid and examine the facts:
- ITA is the leading provider of flight pricing and availability data for U.S. airlines and travel sites, and it is estimated to power the majority of all online flight searches.
- ITA’s customers, many of whom pay Google for advertising to drive traffic to their sites, have invested heavily in developing customized innovations in online travel technology on top of ITA, advances that are reliant on its software.
- Google has pledged to honor ITA’s “existing agreements,” which are, in fact, legally-binding contracts.
- Google has refused to comment on what will happen once those contracts expire – this lack of a response heightens ITA customers’ concerns about their ability to license the company’s best technology and most up-to-date flight data in the future.
- By acquiring ITA, Google will be in a position to potentially undermine other providers of online travel search – and it will have the incentive to undermine ITA’s current customers so that Google can increase online travel searches on its own site, giving it the ability to recover higher advertising fees over time.
Silverman wrongly asserts that “some companies apparently believe that Google should not be allowed to improve the results we deliver our users, by providing our users with airfares and schedules.” No one has ever said that. Actually, FairSearch and its members have repeatedly said they want more, not less competition in online travel – that is what drives innovation, provides consumers with more choices and incentivizes airlines and other travel service providers to keep prices lower. In fact, FairSearch’s members are fierce competitors with one another.
But by choosing to acquire ITA Software, rather than licensing it, Google is setting up a future where there will be less competition and less choice in online travel search. The dominant search provider will become the dominant travel search provider – by force, not by consumer choice.
Just ask Bob.