Tweet
January 13, 2011, 1:07 PM EST
By Sara Forden and Jeff Bliss
(Updates with share prices and comment from former FTC commissioner beginning in seventh paragraph.)
Jan. 13 (Bloomberg) -- The U.S. Justice Department is preparing for a possible antitrust lawsuit to stop Google Inc.’s $700 million acquisition of ITA Software Inc., according to people familiar with the situation.
Department officials haven’t made a final decision about whether to sue to block the purchase by Google, owner of the world’s most popular search engine, said the people, who requested anonymity because the agency discussions are confidential. Google announced in July its plans to acquire ITA, which provides online airline flight and ticket information. The next month, government lawyers said they were extending their ITA investigation.
Google triggered preparation for the government’s possible lawsuit last month by invoking a provision of federal law that forces the government to decide within 30 days whether to challenge the deal, the people said. In bringing the matter to a head, they said, Google prompted Justice Department lawyers to cancel Christmas holiday plans and put together a case.
“It could be Google did that because things are not moving forward,” said Andrew Gavil, a law professor at Howard University in Washington, in an interview. “As a business matter, it can be very difficult” to manage an acquisition if there is a probe.
Gavil, who said he has no direct knowledge of the progress of the investigation, received funding from Google for research unrelated to the ITA acquisition.
Opposing the Deal
A group of software and online travel companies including Microsoft Corp., Expedia Inc. and Sabre Holdings Corp.’s Travelocity have been leading opposition to the acquisition. They helped form FairSearch.org to highlight concerns that Google would prevent others from using ITA’s technology.
Expedia rose 61 cents, or 2.3 percent, to $27.26 in Nasdaq Stock Market trading as of 12:20 p.m., and Orbitz Worldwide Inc., which supports the acquisition, gained 15 cents, or 2.8 percent, to $5.61 in New York Stock Exchange trading. Google fell as much as $2.52 before recovering and rose 23 cents to $617.10 in Nasdaq trading.
Adam Kovacevich, a Google spokesman, declined to comment on the deadline or the department’s preparation.
“While we continue to cooperate with the Justice Department’s review, we are ultimately confident that this acquisition will increase competition,” he said in an e-mail.
In an e-mail, Gina Talamona, a department spokeswoman, declined to comment because the matter is pending.
Urging a Challenge
“I believe the Google-ITA deal is uncompetitive and should be challenged,” said Pamela Jones Harbour, a former member of the Federal Trade Commission who dissented in 2007 from its decision to let Google buy DoubleClick Inc., an online advertising company. “It’s a dominant firm expanding in an adjacent market by acquiring ITA, and the effect would be to dominate flight search.”
Harbour is a partner in Fulbright & Jaworski LLP’s antitrust and competition practice, with offices in Washington and New York City.
Google has said it will continue to license the ITA software to third parties after the acquisition is complete.
Online travel agencies Priceline.com Inc. and Orbitz have been supportive of the deal, which Google said would allow it to display flight times and prices in search results.
The threat of a government lawsuit has thwarted Mountain View, California-based Google’s expansion plans before. The company in 2008 abandoned its agreement to place ads on Yahoo! Inc.’s site after the department threatened to challenge the venture in court.
--Editors: Jim Rubin, Ann Hughey.
To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net; Jeff Bliss in Washington at jbliss@bloomberg.net
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net; Mark Silva in Washington at msilva34@bloomberg.net
Webmaster Forum | SEO Forum | Coding Forum | Graphics Forum</b>
(Updates with share prices and comment from former FTC commissioner beginning in seventh paragraph.)
Jan. 13 (Bloomberg) -- The U.S. Justice Department is preparing for a possible antitrust lawsuit to stop Google Inc.’s $700 million acquisition of ITA Software Inc., according to people familiar with the situation.
Department officials haven’t made a final decision about whether to sue to block the purchase by Google, owner of the world’s most popular search engine, said the people, who requested anonymity because the agency discussions are confidential. Google announced in July its plans to acquire ITA, which provides online airline flight and ticket information. The next month, government lawyers said they were extending their ITA investigation.
Google triggered preparation for the government’s possible lawsuit last month by invoking a provision of federal law that forces the government to decide within 30 days whether to challenge the deal, the people said. In bringing the matter to a head, they said, Google prompted Justice Department lawyers to cancel Christmas holiday plans and put together a case.
“It could be Google did that because things are not moving forward,” said Andrew Gavil, a law professor at Howard University in Washington, in an interview. “As a business matter, it can be very difficult” to manage an acquisition if there is a probe.
Gavil, who said he has no direct knowledge of the progress of the investigation, received funding from Google for research unrelated to the ITA acquisition.
Opposing the Deal
A group of software and online travel companies including Microsoft Corp., Expedia Inc. and Sabre Holdings Corp.’s Travelocity have been leading opposition to the acquisition. They helped form FairSearch.org to highlight concerns that Google would prevent others from using ITA’s technology.
Expedia rose 61 cents, or 2.3 percent, to $27.26 in Nasdaq Stock Market trading as of 12:20 p.m., and Orbitz Worldwide Inc., which supports the acquisition, gained 15 cents, or 2.8 percent, to $5.61 in New York Stock Exchange trading. Google fell as much as $2.52 before recovering and rose 23 cents to $617.10 in Nasdaq trading.
Adam Kovacevich, a Google spokesman, declined to comment on the deadline or the department’s preparation.
“While we continue to cooperate with the Justice Department’s review, we are ultimately confident that this acquisition will increase competition,” he said in an e-mail.
In an e-mail, Gina Talamona, a department spokeswoman, declined to comment because the matter is pending.
Urging a Challenge
“I believe the Google-ITA deal is uncompetitive and should be challenged,” said Pamela Jones Harbour, a former member of the Federal Trade Commission who dissented in 2007 from its decision to let Google buy DoubleClick Inc., an online advertising company. “It’s a dominant firm expanding in an adjacent market by acquiring ITA, and the effect would be to dominate flight search.”
Harbour is a partner in Fulbright & Jaworski LLP’s antitrust and competition practice, with offices in Washington and New York City.
Google has said it will continue to license the ITA software to third parties after the acquisition is complete.
Online travel agencies Priceline.com Inc. and Orbitz have been supportive of the deal, which Google said would allow it to display flight times and prices in search results.
The threat of a government lawsuit has thwarted Mountain View, California-based Google’s expansion plans before. The company in 2008 abandoned its agreement to place ads on Yahoo! Inc.’s site after the department threatened to challenge the venture in court.
--Editors: Jim Rubin, Ann Hughey.
To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net; Jeff Bliss in Washington at jbliss@bloomberg.net
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net; Mark Silva in Washington at msilva34@bloomberg.net
Webmaster Forum | SEO Forum | Coding Forum | Graphics Forum</b>