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Diller Calls Google Travel Deal ‘Disturbing’

Google’s use of its search engine to support its expansion into new internet services gives it an unfair advantage and puts it on a collision course with antitrust regulators, according to a prominent US media mogul.

Barry Diller, chairman of online travel company Expedia and InterActiveCorp, which has amassed one of the largest collections of internet properties, criticised Google for giving prominence in results to its in-house services. That had enabled it to “arbitrarily get in front of” other internet companies that rely on Google for traffic.

Barry Diller
Barry Diller

“I think it is disturbing that Google is moving into serving individual spaces, rather than being search neutral,” Mr Diller said. “It is a dangerous step because it is inevitably going to cause problems with customers and regulatory authorities.”

The comments come less than two weeks after Google unsettled the online travel industry with an agreement to pay $700 million for ITA Software, whose technology is used to find airline flights and tickets prices.

By enabling Google to display suggested flights in reply to searches, the deal would give it a strong foothold in the largest e-commerce market and potentially put it in competition with companies such as Expedia.

Eric Schmidt, Google’s chief executive, has said he expects a protracted regulatory review of the deal but that it would enable Google to create services making it easier for travellers to book travel online.

Calling the ITA deal “a frontal assault on a core area of internet life”, Mr Diller said that Google was “using its market power” to gain an unfair advantage. He said regulators should deal with the ITA problem “either by conditions or denial”.

His comments echo complaints lodged with regulators in Europe this year about Google’s spreading power as it moves into a wider range of specialised, or “vertical”, information web services.

Sergey Brin, Google’s co-founder, said last week that displaying results from its own services enabled it to provide more useful answers to search queries.

Mr Diller said that he believed Expedia was Google’s biggest advertiser, paying the search company “very many hundreds of millions of dollars” a year. He said representations to Google before the deal not to buy ITA had been ignored.