American Antitrust Institute: "Google/ITA Merger Could Lead to Unregulatable Monopoly"

This morning, the American Antitrust Institute released a white paper examining the antitrust issues posed by Google’s acquisition of ITA Software and concluding that the “Google/ITA merger could lead to unregulatable monopoly.”

The white paper, written by AAI Director of Special Projects Randy Stutz and approved for publication by the AAI Board of Directors, “explores both the narrow and broad competition issues that are raised by a Google/ITA combination,” and notes that a “dominant Google in online travel search would also have uniquely important effects on consumer choice.”

According to the press release, AAI says:

“[A]cquiring ITA would put Google in the business of supplying a technology input that powers downstream products in a vertical online search market. That is, Google would own what many consider to be the premier technology that online travel agents, travel meta-search websites, and airline websites license from ITA to afford Internet users the ability to search real-time pricing and seat availability data in the course of shopping for airline tickets online. Neither Google nor ITA currently competes in the provision of this data to Internet users by ‘online travel search’ firms, but together they effectively have such firms surrounded.”

Bert Foer, the President of AAI, is quoted saying:

“The Division must acknowledge the risk that Google may acquire market power in the online travel search market or the technology input market, along with the risk that Google’s control of ITA would lead to foreclosure or other exclusionary effects, whether directly or indirectly…The Division should also consider whether the transaction might have the effect of raising barriers to entry into the broader online search market, which Google already dominates.”

The white paper can be found in its entirety here.