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Efficient Frontier: "Concern and Opposition Is Understandable" to Google-ITA


This morning, a “Google D.C. guy” (according to his Twitter profile) Tweeted about an EfficientFrontier blog post, “An analysis of the Google-ITA controversy,” drawing our attention to one of the more cogent explanations we’ve encountered (read the whole thing here).

The tweet read, “Efficient Frontier analysis of Google-ITA deal: ‘this should be a win-win for everyone’ http://bit.ly/eZpxjT.”

Only part of the story? Yes, but nothing we haven’t come to expect from Google.

For those who are interested (and we certainly were), there was actually quite a bit more to the post. In fact, it echoes many of FairSearch.org’s concerns about the potential negative impact on both competition and consumers, saying:

“…If Google starts to prefer certain partners the marketplace would become inefficient. Google would control a substantial part of the sales funnel and could drive up traffic acquisition costs for the travel sites. These costs would be passed down, making for an unhappy consumer who has to pay higher fares…

As things stand many travel players are the mercy of Google’s algorithms for much of their inbound traffic. The Google-ITA merger would only increase this dependence. Consumers who will benefit in the short run, will be at a disadvantage if the market place becomes less transparent.”

And the quote Google cited? In the spirit of openness and transparency, we thought it would be helpful to include the entire passage:

“Still, if Google can adequately demonstrate that they can set up a transparent system of checks and balances preventing monopolistic behavior in the future, this should be a win-win for everyone.”

Anyone familiar with Google’s business practices – then CEO Eric Schmidt told SearchEngineLand its black-box algorithm is “a business secret of Google” – knows that’s a really big “if.” If history is any lesson, the best way to truly protect consumers from harm is for the DOJ to challenge the deal. Just ask Bob.