A helpful way to understand and put in perspective Google's proposed purchase of ITA Software, the dominant provider of flight search technology, is to identify Google-ITA's best historical and logical analog. That would be Microsoft's 1995 proposed purchase of Intuit-Quicken, the then dominant provider of financial software technology. That transaction was blocked by the DOJ as anti-competitive and was a key precursor decision to the DOJ's ultimate decision to sue Microsoft in 1998 for monopolization under the Sherman Act.
The reason so many people ask: "Is Google the next Microsoft?" is because the analogy is so apt.
First, in over thirty years, Microsoft is the only major company other than Google to establish a national monopoly via technology, generate broad serious antitrust complaints, and attract a Sherman Act anti-monopolization case from the DOJ.
Second, Google-ITA is very similar to Microsoft-Intuit as both attempted to leverage their horizontal industry dominance vertically into a non-tech market vertical of the economy, i.e. Microsoft into personal finance software and Google into travel search software.
- The DOJ's 1995 decision to block Microsoft-Intuit was strategic because it established an antitrust firewall precedent to prevent Microsoft from leveraging its software monopoly outside the tech sector into otherwise competitive verticals.
- This is highly analogous to the current DOJ's reported plans to block the Google-ITA deal in order to establish an antitrust firewall precedent to prevent Google from leveraging its search/search advertising monopoly into otherwise competitive verticals like travel.
Third, DOJ sued Microsoft in 1998 in large part for anti-competitively bundling its Explorer Internet browser with its dominant Windows Operating system in order to disadvantage Netscape and other competitive browsers.
- Analogously, Google is being formally investigated by the EU and informally by the DOJ for anti-competitively and exclusively bundling its own products and services with the top search result position of its dominant search engine.
- DOJ is well aware of the growing body of evidence of Google self-dealing the top search result slots to Google-owned properties to disadvantage a wide variety of competitors and enthrone Google as the leader in new adjacent markets.
- The DOJ also knows it is obvious that Google plans to leverage ITA's search technology and metadata dominance with the top position on Google's search engine to quickly dominate the travel vertical like it did in maps by knocking off MapQwest.
In sum, as much as Google claims to be different than the 1990's Microsoft monopoly, and different in how it responds to antitrust charges and deals with antitrust enforcers, the evidence indicates that Google can play hardball with the best of them. If reports are true, Google jammed DOJ enforcement staff with an expedited deadline forcing them them to cancel their Christmas vacation plans. That's naughty not nice behavior.
The DOJ should block the Google-ITA transaction because ITA is essentially the current "Google of travel search software."
- Combining ITA's dominance of travel search software and travel search metadata sets, with Google's dominant search engine, search advertising platform, audience, and advertiser network will take a competitive online travel ecosystem and quickly tip it to a Google-dominated market.
Interestingly, most everything Google claims to want to do with ITA's software platform, Google could achieve by licensing ITA's software like every other competitor and market player does.
- Logically the only thing Google could do by owning ITA rather than licensing it, is to leverage its ownership rights to exclude others from parts of the software or information the platform gathers, or to exclude travel competitors from the top search result position, which attracts over 30% of clicks per Chitka Research.
The DOJ is also likely to sue to block Google-ITA in order to maintain some jurisdictional relevance in Google antitrust law enforcement matters.
- Aggrieved parties of Google's anti-competitive behavior are watching closely to see if the DOJ will enforce the Clayton Act for Google mergers and acquisitions, because they have lost confidence in the FTC's ability and willingness to legally challenge Google, given that the FTC helped tip Google to monopoly by approving Google-DoubleClick and Google-AdMob.
- I don't see the DOJ following the FTC's lead in looking for ways to avoid confronting Google in court for violations of antitrust law.
- If DOJ somehow did, aggrieved parties could be expected to largely give up on American antitrust enforcement concerning Google and take their complaints directly to the EU, which is more willing to enforce antitrust law against monopolization.
Simply, Google-ITA is a fulcrum antitrust decision.
- Will the DOJ enforce antitrust law against the only major global monopoly broadly abusing its market power in a variety of markets or will it give well-connected Google a pass like the FTC has?