Justice Department Very Close to Addressing Some of the Travel Industry’s Google Problems

Online Travel This Week

The U.S. Department of Justice could be very close to issuing its Google antitrust findings — and some of the travel industry’s longstanding concerns could be part of the mix.

The details will matter here — what specific steps does the department decree to blunt Google’s quasi-monopoly over search, its diverting traffic to Google Flights and Google Hotels, and to level the playing field? For example, Google’s critics have complained that European Commission actions to reign in Google’s anticompetitive practices in its shopping vertical in Europe didn’t resolve the problems.

We’re hearing the release of the Justice Department findings could be imminent, but as with all governmental maneuverings, they could be delayed.

The issues in the United States could take years to resolve, and litigation would seem likely.

But if there is proverbial meat on the bone of any enforcement actions, it would be a welcome surprise for the travel industry. After all, the U.S. Federal Trade Commission probed Google on antitrust matters in 2011 and 2012, and although the commission’s bureau of competition staff advocated suing Google over its ripping off of Tripadvisor and Yelp user reviews, the FTC basically stood down.

Similarly, although the European Union has leveled nearly $8 billion in fines against Google since 2017 and 2018 for anticompetitive practices in its shopping vertical and restrictions on Android device manufacturers, it has yet to tackle Google’s travel business practices.

In 2018, the Trump administration starting attacking Google for alleged media bias, but the Justice Department investigation has apparently broadened to address Google’s practice of manipulating search engine results pages to push organic results into relative oblivion a few pages off the screen, and to divert traffic to its own verticals in areas such as flights, hotels, experiences, restaurants, and careers, for example.

When President Trump started blasting Google for its alleged anti-conservative bias in news stories in 2018, saying Google search results pages were “rigged,” and that Google, Facebook, and Twitter represent a “very antitrust situation,” we wrote about Google’s travel biases in a story, Google Is Rigged. Just Not the Way Trump Thinks It is.

The House Judiciary Antitrust Subcommittee issued a report October 6 on anticompetitive practices at Google, Facebook, Amazon and Apple, and called for “prohibiting platforms from engaging in self-preferencing, as well as “structural separations” of some high-profile acquisitions.

The subcommittee’s 451-page report mentioned travel a mere nine times, often in passing, but it quotes one competitor as saying, “Google thus deceptively siphons internet traffic away from its vertical competitors in online travel and forces them to pay more for [search engine monetization] and Ads in order to get meaningful placement on Google’s [search engine results page]. Importantly, Google also requires its vertical competitors to provide their inventory feed to populate the ads, allowing Google to appropriate vertical service providers’ valuable inventory data,” according to the report.

Google not only faces the findings from the U.S. Department of Justice, but also attorneys general around the United States, as well as a couple of probes in Europe. Stay tuned.

In Brief

Chinese Booking Sites Report Surge in Golden Week Trips

If an official Chinese government publication is to be believed, than online travel agency Tongcheng-eLong saw hotel bookings jump 40 percent in early October compared to a year ago and pre-pandemic. Alibaba’s Fliggy reported a 50 percent jump, and Trip.com Group saw a substantial rise in car-rental bookings. Hotel occupancy, though, may not have tracked as high. Macau News Agency

SPAC Triple Play

Three travel-oriented SPACs (special purpose acquisition companies) in the last few weeks have gone public or are in the process of doing so if their plans come together. With valuations of target companies likely nose-diving, private equity players and venture capitalists smell opportunity. Skift

AirAsia.com Wants to Compete as an OTA

AirAsia Group CEO Tony Fernandes told Skift in an exclusive interview that he learned a bunch from Expedia Group’s Barry Diller and its former CEO Dara Khosrowshahi in the two companies’ now-deceased joint venture that he decided he could build his own online travel agency. Is all that data enough? What about limitations on marketing spend to compete? Skift

Trivago Officially Launches Commission Model

Online travel agencies and hotels advertising in metasearch engines felt ripped off in the beginning of the pandemic when their cost-per-click advertising turned into cancelled bookings, and the necessity to issue refunds. Like Google, Trivago launched an optional commission model to take out some of that worry in the future. Mirai