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|15th August 2012, 06:21||#1|
Join Date: May 2010
Google attacked by antitrust watchdog over Frommer's buy
Google has snapped up travel guidebook brand Frommer's, a deal which has been attacked by a consumer group over potential antitrust implications.
The acquisition will mean Google further increasing its online content services a year after the acquisition of restaurant ratings service Zagat. Frommer's online and print publications will offer the search giant extensive local reviews and listings content. Owners John Wiley & Sons did not reveal how much the deal was worth.
Google has made other inroads into the travel industry, acquiring software firm ITA last year. Although the deal was eventually given the all clear by US authorities, the Federral Trade Commission was keen to ensure that Google would not be leveraging its dominant position unfairly.
Now it seems that the Frommer deal has raised the ire of consumer rights groups, with Consumer Watchdog demanding another antitrust investigation from the FTC.
The antitrust allegations centre around the firm moving away from its traditional services and further into providing online content.
"There is a fundamental conflict between being a search provider and a content provider," John M. Simpson, Consumer Watchdog's Privacy Project Director, said in a statement.
"As Google has increased its content and services, it has unfairly favoured them in its search results and damaged competitors," he said. "It makes absolutely no sense to approve this deal."
Google is already in hot water with the FTC, having been landed with a record $22.5 million fine last week.
The search giant also faced criticism from a UK MP over its tax payments which have been described as using the controversial "Double Irish" system.
But according to Alan Davis, a partner at law firm Pinsent and Masons, the deal is unlikely to run afoul of competition authorities as Frommer's does not have the dominant position that ITA had prior to its Google buy out.
"I don't think that this particular acquisition is likely to be objectionable from a merger control point of view," Davis said. "I don't think the competition authorities will be able to block or it or raise serious concerns about the acquisition at this stage in order to stop it taking place."
According to Davis it is unlikely that the deal in itself would constitute anti-trust, though should Google unfairly leverage its own position search dominance then authorities could come calling again.
"There may be concerns down the line depending on how they treat other travel guides," Davis said.
"If they act in some sort of discriminatory way in relation to how their search engine works and they give favourable discrimination to Frommer's, then they could be subject to challenge for abuse of dominance," he said.
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