The Justice Department has given Google’s controversial $700 million purchase of ITA Software the okay. Google (NSDQ: GOOG) announced its purchase of ITA, which provides back-end search and booking technology to travel search engines last summer, as part of a possible move into the travel search vertical, but competitors had questioned whether the deal was anti-competitive, saying that a rival would control the technology they rely on and that Google could use its dominance of the search market to push its own travel product. Regulators had said they would give the deal a closer look and there had been recent reports the government might sue to block it.
In a statement, the Justice Department says that indeed the acquisition “as originally proposed, would have substantially lessened competition among providers of comparative flight search websites in the United States, resulting in reduced choice and less innovation for consumers” and that it has in fact filed a lawsuit to block the original deal.
But the agency says that, under a proposed settlement, Google will fund research and development of the back-end technology ITA provides to other travel search engines “at similar levels to what ITA has invested in recent years” and that Google would have only limited access to the data ITA gathers from those companies. The government says those terms — which Google has agreed to — resolve its concerns.
The agreement is a big victory for Google, which had said from the day the deal was announced that it would honor all of ITA’s existing agreements with its customers — including Kayak, Orbitz and Microsoft (NSDQ: MSFT) — and hoped to add new ones. Google says it will now move to close the deal as soon as possible and will then begin development of the new travel search product it is planning but has given very few details about.