Google buys travel software company

WASHINGTON (AP) - Government officials are imposing significant conditions on Google Inc. as they allowed the Internet search leader on Friday to proceed with its $700 million purchase of airline fare tracker ITA Software.

The purchase will establish the Internet search giant as a key player in online travel. ITA gives Google control over the technology that powers the reservation systems of most major U.S. airlines and many popular online fare-comparison services, including Kayak, TripAdvisor and Hotwire.

But to win Justice Department clearance Friday, Google agreed to license ITA's software to other companies on fair and reasonable terms through 2016, and to continue to invest in research and development of new products.

Google previously promised only to honor all of ITA's current contracts, which expire over the next few years. ITA officials had worried that Google would keep its innovations for itself. Under the terms of the approval, any disputes would be subject to binding arbitration.

Google also agreed to establish a separation between ITA and other Google operations to ensure that it cannot misuse proprietary customer data or technology that resides on or runs through ITA servers.

In addition, the government will monitor Google to ensure it does not engage in anticompetitive behavior. That could include manipulating its powerful Internet search engine to steer consumers to its own services - or bury links to rivals far down in its search results - if it uses ITA to enter the online travel business.

The company will be subject to broad requirements to report to government officials on its online travel operations, including travel search and advertising. In addition, the government will establish a forum for complaints about Google's behavior.

This could eventually lay the groundwork for a broader investigation by either the Justice Department or the Federal Trade Commission into Google's practices as it expands beyond general Internet search into more specialized markets. The company's search results already highlight some of its own specialized services, including mapping, video and finance.

The European Commission and the Texas attorney general are currently looking into whether Google manipulates search results to extend its monopoly into other online businesses.

Google has promised it won't sell airline tickets or book other travel arrangements on its own site. Rather, it has said it wants to use ITA to improve its search results for travel - giving consumers more choices and better ways to search for plane tickets. That would enable the company to command higher ad rates from airlines, hotels, rental car agencies and other leisure services trying to reach travelers.

Google offered a hint on what could be coming in a blog post Friday. It suggested that by simply typing in "flights to somewhere sunny for under $500 in May" into Google, the user would get not just a set of links but also flight times, fares and a link to sites for buying the trip.

Joseph Wayland, deputy assistant attorney general of the Justice Department's Antitrust Division, said in a statement Friday that online airfare comparison services that rely on ITA software will still be able to compete, though.