Google antitrust deal sets stage for bigger fight

Updated: Apr 11, 2011, 21:28 PM IST

The U.S. government’s agreement to allow Google to buy Internet travel programmer ITA Software — with a few sensible restrictions — is just the appetizer. The main course in the extended meal shared by Washington and Silicon Valley will be control of the huge markets for broad Internet search and mobile operating systems.

Travel companies such as Expedia and Hotwire lobbied against Google’s acquisition of ITA, which makes software for many airfare and travel search websites, travel agents and airlines. Their fear was that Google would use its new subsidiary to gain an unfair advantage in online travel search. Stipulations that Google must continue to develop ITA’s software, license it out to rivals and ring-fence their data should reduce these concerns.

Yet travel sites aren’t the only businesses complaining that Google uses its powerful position to its own advantage. The company has about two-thirds of the U.S. market for Internet search and a share in excess of 90 percent in parts of Europe. And Android, its operating system for mobile phones, may be following. It is now the most popular smart phone operating system, with a rapidly growing 33 percent slice of the U.S. market, according to comScore.

This brings the ability to sway large numbers of consumers. For example, critics of the ITA deal claim Google favors its own services in searches, making them appear higher up in the list of results. The company counters that tying together its products — such as travel data, online calendars and maps — makes them more useful and that, as a result, they deserve to be more prominent.

Google’s best defense, though, has long been to say that users can always just click on a rival search engine. But regulators are now being asked to question that notion. For example, Microsoft says Google-owned properties such as YouTube unfairly wall off data, thereby making other search sites’ results less reliable. Other critics say Google may start locking out phone manufacturers from the latest versions of Android if they work too closely with its search rivals or upcoming ones like Facebook.

It took nine months for U.S. regulators to decide about the ITA purchase. It will take far longer to figure out whether Google is acting unfairly with its search engine and Android.

Bureau Report