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Justice Department Approves Google's ITA Acquisition, With Conditions

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Justice Department Approves Google's ITA Acquisition, With Conditions

DOJ's Strings on Deal Will Harm Consumers, Innovation
Contact:
Lee Doren, 202-331-2259
Nicole Ciandella, 202-331-2773
 
Washington, D.C., April 8, 2011 – Today, the Department of Justice announced a proposed settlement with Google that will allow the firm to move forward with its acquisition of travel company ITA Software, subject to binding conditions that will allegedly promote “robust competition for airfare websites.

 

Statement by Wayne Crews, Vice President for Policy

The Department of Justice’s approval of the Google-ITA deal continues the worrisome trend of antitrust authorities imposing "conditions" on every large-scale technology sector deal. These conditions, such as the compulsory licensing of the ITA platform to competing online travel services, rest on the false premise that market concentration and exclusive economic arrangements tend to harm consumer interests.

The imposition of forcible restrictions on Google-ITA will undermine the incentives for future entrepreneurs and engineers to create the "next ITA" to deliver cutting edge information management and control technologies. If the conditions imposed on this merger merely obviate the need for a competitive response on the part of rivals, then they are a failure as a matter of public policy and amount to nothing more than corporate welfare.

Technology company acquisitions are a crucial element of an evolving marketplace that is rapidly expanding consumer choice and our ability to customize information. Antitrust authorities risk wreaking massive economic harm when they undermine network industries’ efforts to reorient themselves to attain the scale sufficient to foster the digital platforms that consumers will expect in years to come. The evolution of airline information management likely will not end with ITA.

Antitrust purports to limit excessive market power. Not quite. Antitrust laws have actually concentrated economic power in the hands of Washington bureaucrats as opposed to the dispersed shareholder interests that drive free enterprise.

 For more information:

› Crews can be reached at wcrews@cei.org
› Read more by Wayne Crews on CEI.org