Barry Diller, chairman of Expedia and InterActiveCorp, protested this week about Google's $700m acquisition of ITA Software, saying that it would give Google unfair leverage in displaying flight information. Mr Diller wants the deal to be scrutinised carefully by regulators and conditions imposed.... the potential for antitrust abuse through the tying of vertical services to search raises clear concerns. European and US regulators should use the ITA deal to examine the issue broadly.
It would be wrong for Google to be hamstrung by regulators simply because its services are superior to rivals, but it needs to be watched with care.
Mr. Diller's IAC has its own search engine, Ask.com. If Google customers think Google is excessively pushing traffic to Google-owned services, nothing is stopping the customers from switching to another search engine, such as Ask.com, if the alternative service can provide better results for the consumer. Compared to Google, Ask.com so far hasn't attracted much market share on the merits. Mr. Diller may be hoping he can somehow improve the situation by having regulators hassle Google, rather than by taking the more difficult route of improving Ask.com so that it offers better search results than Google does.
Disclosure: I own some Google stock.