Post updated – see below.
We’ve heard from two sources that the US Department of Justice is about to announce a consent decree with Google over its acquisition of ITA that comes with an interesting twist. As we reported, Google will have to license out ITA technology to other companies for a set period, putting it under government oversight.
But it appears that the DoJ is also creating a new complaints procedure for anyone who thinks the company’s involvement in the travel market leads to deceptive or manipulative practices – including in its core search service.
This would create a powerful precedent that might eventually be applied to other areas of search beyond travel, particularly if Google continues to expand through acquisition.
Any rival that felt its service was being unfairly penalised by Google – for instance, by being relegated down the search rankings – would theoretically be in a position to lodge a complaint and have the justice department take up its case.
Of course, the real question will be how the regulators go about these investigations and what is considered to be deceptive or manipulative practice by Google. As Rebecca Arbogast, an analyst at Stifel Nicolaus, says, it’s hard to imagine the DoJ asking to analyse Google’s search algorithms to see if the code has been manipulated to harm a competitor. The regulators are more likely to seek explanations from Google about its practices, she adds.
But it is an important start.
Update: The competitive impact statement issued by the DoJ in connection with the Google consent decree contains this intriguing wording:
In addition, Google must report certain complaints that it has directly or indirectly treated OTIs [online travel intermediaries] unfairly. This obligation will enable OTIs who believe that Google has acted in an unfair manner with respect to flight search advertising to make complaints and have written complaints brought directly to the attention of the Department of Justice.
So does this mean the regulators are only interested in advertising-related issues? Not from what we hear.
A DoJ official tells us that the agency plans to take a broad interest in how Google uses its new power in the travel search business. While it will not stand in the way of innovations that bring new benefits to consumers, this official says, the DoJ will be on the lookout for signs that Google is favouring its own travel affiliates over rivals – and that includes significant changes in the algorithmic search rankings that might see a competitor unduly disadvantaged.
