Google’s new travel companion: antitrust scrutiny

Published On 30/08/2012 | By Donny Low | Mergers

Google is attracting even more antitrust scrutiny after its announcement on 13 August that it was acquiring Frommer’s, the travel guide publisher.  Various consumer and internet groups including, Fairsearch.org, an organisation composed of Google’s competitors including Microsoft, Expedia and TripAdvisor, have called on antitrust officials to look closely at the deal.  The concerns raised include Google potentially giving preferential treatment to Frommer’s search results to increase advertising revenue from Frommer’s websites and the purchase of airfares through Google’s platforms.  Google recently acquired restaurant review guide, Zagat (September 2011) and ITA Software whose air-travel flight-information software is used by many airlines, travel agents and online travel sites.  What is most interesting about the Frommer’s deal is its context – in particular, the amount of antitrust scrutiny already facing Google.

The ITA Software deal, first announced in July 2010, took 9 months of antitrust review by the US Department of Justice before being eventually approved subject to conditions.  Earlier this month, Google settled an FTC case alleging that it misrepresented to users of Apple Inc.’s Safari Internet browser that it would not use tracking “cookies” or serve targeted ads in violation of an earlier privacy settlement with the FTC.  Google agreed to pay US $22.5 million which is the largest civil penalty ever levied against a single defendant.  But that’s not all.  Google’s most serious antitrust problem continues with the FTC already more than a year into a deep and broad investigation into Google’s search advertising business.  Although the Frommer’s deal is relatively small (reported to be about US $25 million), it does tell us a lot: that Google is not afraid of further antitrust scrutiny.

Photo credit: Ryan Vaarsi / Foter / CC BY

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About The Author

Donny is a Senior Associate in the Sydney office of King & Wood Mallesons. He's practised antitrust law in the US, still follows American politics and plays cricket on the weekends.

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