6:03 PM
WASHINGTON |
WASHINGTON (Reuters) - The Justice Department approved Google Inc's purchase of ITA Software with stiff conditions on Friday, and left the door open to a larger probe into whether Google manipulates search results to hurt rivals.
The decision, which allows Google to expand into the online travel market, comes as new CEO Larry Page revamped the company's management structure in a bid to accelerate efforts in social networking, mobile and other key businesses.
The Justice Department blessed Google's $700 million deal with the ticketing software company. Google promised to license the software for five years, to continue to upgrade it, and to establish firewalls to protect ITA clients' intellectual property.
The ITA buy is part of an acquisition and hiring spree as Google aims to ensure its online services stay on top as Internet surfers go mobile and turn to services like the wildly popular Facebook.
Now, U.S. antitrust regulators will turn to the question of whether to open a formal antitrust probe into allegations that Google, the world's No. 1 Internet search engine, manipulates search results, a source told Reuters on Friday.
The Federal Trade Commission and Justice Department are both contemplating an investigation but there has been no decision made on which agency may take it up.
There has been a series of complaints made to the agencies -- many from Google rivals that specialize in searches such as price comparison websites -- that Google has made them difficult to find.
A key lawmaker has been critical of Google, and remained so on Friday. "We continue to scrutinize broader questions about the fairness of Google's search engine, and whether it preferences its own products and services to the detriment of competitors," said Sen. Herb Kohl, chairman of the Judiciary Committee's antitrust subcommittee.
The European Commission took up an antitrust probe after complaints from three small companies, one of them owned by Microsoft Corp. Microsoft filed a formal complaint against Google with the commission in Brussels last month.
Microsoft charged that Google hurt competition by "walling off" content on its YouTube site, so other search engines cannot display accurate results. It also said that Google made it hard for Microsoft's mobile phone software to show videos from YouTube, among other charges.
The Justice Department was also aware that Google had an incentive to tweak search results to favor its businesses and was keeping an eye on the issue, said a Justice Department official who requested anonymity.
"There were a variety of complaints about bias in search," the official said. "So, while we're aware of those complaints we did not think they were relevant to this (ITA) transaction."
Analysts said they believed that Google's power in search meant the company had to step carefully, and that a broader probe was a big worry.
"A lot of these new markets that they enter rely heavily on search to drive traffic," said Yun Kim, an analyst with Gleacher & Co. "That's what the government is worried about."
CONDITIONS PLACED ON GOOGLE BUY OF ITA
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