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Fact-Checking Google: Higher Prices and Fewer Choices for Travel Consumers

Google points out that it doesn’t compete with ITA, “so there will not be less choice for consumers.”  But here’s the problem: Google DOES compete with ITA’s customers.  Quite a few of them, in fact.  In its 2009 annual report filed with the SEC, Google specifically calls out KAYAK and other “vertical search engines” as competitors.  Here’s a direct quote from the report (emphasis ours):

“We compete with these sites because they, like us, are trying to attract users to their web sites to search for product or service information, and some users will navigate directly to those sites rather than go through Google.”

Google wants to make sure more users go through Google.  And that’s why Google is buying control over the software that powers most of its direct competitors in flight search.  If Google’s competitors no longer have access to ITA’s technology or have to pay more for it, that’s going to drive more consumers to Google.  That, in turn, will drive more travel advertising dollars to Google, raising prices for advertisers, including airlines, online travel agencies and travel search engines.

And guess who will ultimately pick up the tab for those higher costs?  That’s right, consumers.

When you look at it that way, it’s not so hard to see why it would result in higher prices.

Thomas Barnett, who recently served as Assistant Attorney General for the Justice Department’s Antitrust Division and who serves as counsel to Expedia, puts it in perspective: “Google is seeking to control the software that powers most of the competition in on-line flight search.  That competition has brought enormous benefits to consumers.  If Google restricts access to ITA’s key technology, consumers are likely to be harmed.