United States v. Google Inc. and ITA Software Inc., Proposed Final Judgment and Competitive Impact Statement, 21017-21033 [2011-9020]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Notices]
[Pages 21017-21033]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9020]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Google Inc. and ITA Software Inc., Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Google Inc. and ITA Software Inc., Civil Case No. 
1:11-cv-00688. On April 8, 2011, the United States filed a Complaint 
alleging that Google's proposed acquisition of ITA Software Inc. would 
substantially reduce competition in the online travel planning 
industry, in violation of Section 7 of the Clayton Act, 15 U.S.C. 18. 
The proposed Final Judgment would require Google to continue licensing 
ITA Software's products for a period of five years following the 
merger.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at https://www.justice.gov/atr, and at the Office of the Clerk of the United 
States District Court for the District of Columbia. Copies of these 
materials may be obtained from the Antitrust Division upon request and 
payment of the copying fee set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to James J. Tierney, Chief, Networks and Technology Section, Antitrust 
Division, U.S. Department of Justice, 450 Fifth Street, NW., Suite 
7100, Washington, DC 20530 (telephone: 202-307-6200).

Patricia A. Brink,
Director of Civil Enforcement.

In the United States District Court for the District of Columbia

    United States of America, United States Department of Justice, 
Antitrust Division, 450 Fifth Street, NW., Suite 7100, Washington, 
DC 20530, Plaintiff, v. Google Inc., 1600 Amphitheatre Parkway, 
Mountain View, CA 94043, and ITA Software, Inc., 141 Portland 
Street, Cambridge, MA 02139, Defendants.

Civil Action No. 1:11-cv-00688.
Filed: 4/8/2011.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil action against 
Google Inc. (``Google'') and ITA Software, Inc. (``ITA'') pursuant to 
the antitrust laws of the United States to enjoin Google's proposed 
acquisition of ITA, and to obtain such other equitable relief as the 
Court deems appropriate. The United States alleges as follows:

I. Nature of Action

    1. On July 1, 2010, Google, a significant provider of general 
Internet search and search advertising in the United States, entered 
into a merger agreement to acquire ITA, the provider of the leading 
independent airfare pricing and shopping system (``P&S system''), for 
$700 million. P&S systems provide flight pricing, schedule and seat 
availability information to Internet travel sites.
    2. Online travel represents a significant share of e-commerce in 
the United States. Consumers rely on the Internet to make their travel 
plans, and often begin by shopping for airfare. Online travel 
intermediaries (``OTIs'') such as Orbitz, Kayak and Expedia allow 
consumers to compare flight prices, schedules, and seat availability on 
multiple airlines simultaneously. OTIs, and the flight search services 
they offer, have become very popular with consumers who want to ensure 
they are getting the best deal. Indeed, most U.S. consumers compare 
flight options on an OTI Web site before purchasing a ticket online.
    3. ITA's P&S system, QPX, powers a significant share of the 
domestic comparative flight searches conducted by U.S. consumers. ITA 
licenses QPX to many of the most popular and innovative OTI's providing 
comparative flight search services, including Orbitz, Kayak, and 
Microsoft's Bing Travel. QPX is a critical flight search tool for many 
of its licensees, as other P&S systems cannot match its speed and 
flexibility, and are not poised to do so in the near future. Thus, 
these OTIs currently have no adequate alternatives to QPX and will not 
have any following the merger.
    4. Google has the most widely used general Internet search engine 
in the United States and is the leading seller of Internet search 
advertising. Google seeks to expand its search services by launching an 
Internet travel site to offer comparative flight search services.
    5. The proposed merger will give Google the means and incentive to 
use its ownership of QPX to foreclose or disadvantage its prospective 
flight search rivals by degrading their access to QPX, or denying them 
access to QPX altogether. As a result, the proposed merger is likely to 
result in reduced quality, variety, and innovation for consumers of 
comparative flight search services.

II. Jurisdiction, Venue and Commerce

    6. The United States brings this action under Section 15 of the 
Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain Google 
and ITA from violating Section 7 of the Clayton Act, as amended, 15 
U.S.C. 18.
    7. Google is a corporation organized and existing under the laws of 
the State of Delaware, with its principal place of business located in 
Mountain View, CA. In 2009, Google earned more than $23 billion in 
revenues in the United States. Google is engaged in interstate commerce 
and in activities substantially affecting interstate commerce. It sells 
online search advertising throughout the United States. Its sales of 
online search advertising in the United States represent a regular, 
continuous and substantial flow of interstate commerce, and have had a 
substantial effect upon interstate commerce.
    8. ITA is a corporation organized and existing under the laws of 
the State of Delaware, with its principal place of business located in 
Cambridge, MA. ITA is engaged in interstate commerce and in activities 
substantially affecting interstate commerce. It makes sales throughout 
the United States. Its sales in the United States represent a regular, 
continuous and substantial flow of interstate commerce, and have had a 
substantial effect upon interstate commerce.
    9. The Court has subject-matter jurisdiction over this action and 
these defendants pursuant to Section 15 of the Clayton Act, as amended, 
15 U.S.C. 25, and 28 U.S.C. 1331, 1337(a), and 1345.
    10. Venue is proper in this District under Section 12 of the 
Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1391(b)(1) and

[[Page 21018]]

(c). Defendants Google and ITA transact business and are found within 
the District of Columbia. Google and ITA have submitted to personal 
jurisdiction in this District.

III. The Merger Is Likely To Lessen Competition Substantially in the 
Market for Comparative Flight Search Services in the United States

A. Overview of Comparative Flight Search Services and P&S Systems

    11. Major airlines developed the first flight search systems in the 
1950s and 1960s for their own internal use. In the 1970s, the airlines 
started releasing specialized versions of these systems for use by 
professional ``brick and mortar'' travel agents. These systems provided 
both flight search and booking functionality. They were known first as 
``computer reservation systems'' (``CRSs''), and later as ``global 
distribution systems'' (``GDSs'') as airlines divested their ownership 
interests and the companies expanded their presence outside of the 
United States. The GDS firms function as intermediaries between the 
airlines looking to sell tickets and travel agents with customers 
looking to buy tickets.
    12. The early flight search systems were relatively limited in 
their search capabilities. They generated a limited set of results per 
query, and did not present the list of flight options in a user-
friendly format. Travel agents received special training in order to 
use the systems, and brought their training and experience to bear both 
in performing flight queries and interpreting the results for 
consumers. Consumers made travel decisions based on information 
extracted from these systems by professional travel agents.
    13. With the advent of the Internet, two different types of OTIs 
emerged that allow U.S. consumers to search for domestic flight prices, 
schedules, and seat availability on multiple airlines simultaneously: 
Online travel agencies (``OTAs'') such as Expedia, Travelocity and 
Priceline, and travel meta-search engines (``Metas'') such as Kayak, 
TripAdvisor and Bing Travel. Like the ``brick and mortar'' travel 
agencies, OTAs provide both flight search and booking services. Also 
like the ``brick and mortar'' travel agencies, OTAs split booking fees 
with the GDSs. They supplement this revenue by selling advertising on 
their Web sites to airlines, hotels and other companies offering 
travel-related products and services.
    14. Metas enable consumers to search for flights but do not offer 
booking services. When a consumer on a Meta travel site enters a flight 
query, the Meta provides a set of flight options, and for each option, 
a set of links to various airline and OTA Web sites. To purchase a 
ticket, the consumer must click a link to an airline or OTA Web site. 
In contrast to OTAs, which generate revenue primarily through booking 
fees and secondarily through advertising sales, Metas generate revenue 
through advertising sales and referral fees collected from the airlines 
and OTAs.
    15. To attract traffic, Metas generally offer innovative flight 
search features that capture the consumer's attention, and provide an 
array of attractive flight options in response to each query. Metas 
also prioritize quick response times because consumers on their sites 
are often at an earlier stage of the travel planning process, and are 
less likely to endure a prolonged wait for search results. Although 
Metas are the newcomers, they are driving competition in comparative 
flight search services through innovation, and are progressively 
gaining ground.
    16. To perform a flight search on an OTA or a Meta, a consumer 
typically enters an origin and destination city and desired travel 
dates and times. The travel site then provides a number of options on 
different airlines with varying routes and pricing. Some travel sites--
particularly the Metas--also offer more sophisticated and innovative 
flight search features, for example, a fare predictor that allows 
consumers to identify the best time to buy a ticket for a particular 
trip, or an ``anywhere'' feature that allows them to explore different 
destinations by specifying a price range, desired activity (e.g., 
beach, golf, skiing) and desired temperature (e.g., average high of 
80).
    17. To provide flight search functionality, OTAs and Metas rely on 
P&S systems such as ITA's QPX. A system includes not only the P&S 
engine software, but also on-going access to seat and fare class 
availability data. When a consumer on a Meta or OTA Web site submits a 
flight query (e.g., Boston to San Francisco, March 1, 2011, returning 
March 14, 2011), the Web site sends the query to the P&S system. The 
P&S system accesses the fare, schedule, and seat availability 
information of multiple airlines, and uses a sophisticated algorithm to 
analyze the flight possibilities and convert the query into a list of 
available flight options. It sends these options back to the OTA or 
Meta, which presents the available flight options to the consumer in a 
format that facilitates comparison (e.g., organized by price, departure 
or arrival time, or number and length of connections). P&S systems 
differ in their speed; flexibility; ability to find the lowest price 
itinerary; ability to obtain accurate seat availability information; 
and breadth of results presented.
    18. Although the flight queries submitted on OTA and Meta Web sites 
are often simple, the computing challenges involved in providing the 
underlying flight search functionality are quite significant. Airfare 
pricing and seat availability change from moment to moment, and are 
governed by a complex system of fare rules that vary by airline. There 
are thousands of possible flight paths that can be used to travel 
between any two cities on a given day; when different airlines, 
departure and arrival times, and fare codes are taken into account, the 
number of possible flight combinations can number in the billions. In 
order to present consumers with flight options that are actually 
available for purchase, the billions of possible combinations must be 
checked against seat availability data and fare rules.

B. Relevant Product Market

1. Comparative Flight Search Services
    19. One of the markets affected by this transaction is comparative 
flight search services. Comparative flight search service providers 
enable consumers to search online for flight prices, schedules, and 
seat availability on multiple airlines simultaneously. Comparative 
flight search services is a relevant antitrust product market because 
no other flight search service is as useful and convenient to 
consumers.
    20. Current competitors in this market include Metas (e.g., Kayak 
and Bing Travel), and OTAs (e.g., Expedia, Orbitz and Travelocity) 
whose comparative flight search services can be consumed separately 
from their flight booking and other travel services.
    21. Airline Web sites and reservation lines are not reasonable 
substitutes for comparative flight search services because they do not 
allow consumers to compare prices and schedules across multiple 
airlines simultaneously. It is significantly more cumbersome for a 
consumer to compare flight prices and schedules by going to many 
different airlines' Web sites separately, and even then the consumer 
might not find the best fare.
    22. Using a ``brick and mortar'' travel agent is also not a 
reasonable substitute for comparative flight search services online 
because travel agents do not provide the same sort of user control, 
instantaneous response, and flight search flexibility as OTAs and 
Metas.

[[Page 21019]]

    23. There are no reasonable substitutes for comparative flight 
search services, and thus, a small but significant degradation in the 
quality of comparative flight search services or increase in price to 
consumers of these services would not cause a significant number of 
users to switch to other services, such as airline Web sites or ``brick 
and mortar'' travel agents. Accordingly, comparative flight search 
services is a relevant product market for purposes of Section 7 of the 
Clayton Act.
2. P&S Systems
    24. This transaction also impacts the P&S systems market. P&S 
systems have two main components: a continuously-updated database of 
airline pricing, schedule and seat availability information, and a 
software algorithm used to search the database for flight options that 
best match consumers' search criteria. The significant competitors in 
this market include ITA, Travelport, Sabre, Amadeus, and Expedia.
    25. P&S systems is a relevant antitrust product market because no 
other comparative flight search technology is as fast or as reliable. 
The closest alternative to P&S systems is screen-scraping software 
which pulls or ``scrapes'' airline pricing and scheduling information 
from airline Web sites and other OTIs instead of accessing a 
centralized database of flight pricing, schedule, and seat availability 
information. Screen-scraping technology is not a reasonable substitute 
for P&S systems because it is significantly slower and less reliable.
    26. A small but significant increase in the licensing fees charged 
to OTIs for use of P&S systems would not cause a sufficient number of 
these sites to substitute to screen scraping technology to make such 
price increases unprofitable. Accordingly, P&S systems is a relevant 
product market for purposes of Section 7 of the Clayton Act.

C. Relevant Geographic Market

1. Comparative Flight Search Services
    27. The relevant geographic market for comparative flight search 
services is the United States. All the major OTIs that allow consumers 
to compare domestic flight prices and schedules are optimized for use 
by U.S. consumers. While some of the Web sites have foreign versions 
(e.g., https://www.expedia.co.uk), the foreign versions are not adequate 
substitutes for most U.S. consumers because they list flight prices in 
their local currency, and sell tickets in that currency, requiring a 
currency conversion fee.
2. P&S Systems
    28. The relevant geographic market for P&S systems is the United 
States. In order for a P&S system to serve U.S. consumers, it must have 
access to comprehensive and reliable seat and fare class availability 
data on routes with at least one U.S. endpoint, and software which 
provides fare, tax, and fee calculations denominated in U.S. dollars. 
Accordingly, OTIs serving U.S. consumers cannot reasonably substitute 
software that is optimized for a different geographic market (e.g., 
Europe) and not the United States.

D. Anticompetitive Effects

    29. The acquisition of ITA by Google is likely to lessen 
competition substantially in the market for comparative flight search 
services in the United States. After acquiring ITA, Google intends to 
use QPX as the back-end technology for its forthcoming comparative 
flight search services. Google's travel service will compete with OTIs. 
As Google has recognized, QPX is a unique P&S system because it has 
superior features that cannot be quickly replaced or replicated. After 
acquiring QPX, Google will have the ability and incentive to foreclose 
competing OTIs' access to QPX and thereby weaken the ability of its 
rivals to compete.
1. ITA's QPX Is Dominant in P&S Systems and Serves as the Leading 
Platform for Web Sites Offering the Most Innovative Flight Search 
Services
    30. Since its entry into the P&S systems market in 2001, ITA has 
dramatically expanded its portfolio of customers. ITA has won virtually 
every competition for business in the United States in which the 
customer did not already have a P&S system provider or product. At the 
same time, ITA has lost very few customers. Today, QPX powers all major 
Metas and three major OTAs and handles more domestic flight comparison 
queries than any other P&S system. QPX is widely recognized as the best 
P&S system in the U.S. market due to its superior speed and 
flexibility.
    31. QPX has a significant speed advantage because it can more 
quickly determine seat availability using its proprietary Dynamic 
Availability Calculating System (``DACS''). ITA's DACS is a unique 
system which can quickly estimate seat availability without polling the 
airlines' systems (which slows the process) or relying on data from 
prior queries (which is sometimes stale and inaccurate). Speed is 
important because the longer it takes to respond to a query, the 
greater the likelihood that the consumer will abandon the search and 
switch to another flight search site.
    32. QPX is also highly configurable. QPX has more than a thousand 
different parameters that can be adjusted or ``tuned'' to meet the 
needs of individual travel site customers. QPX's flexibility also 
allows it to more efficiently handle the complex queries demanded by 
more innovative flight search features such as Bing Travel's Fare 
Predictor, which predicts whether prices for a particular route are 
trending up or down.
    33. ITA also leads in P&S system innovation. For example, ITA is 
developing a new product called InstaSearch which relies on cutting-
edge computing techniques to significantly reduce query response times. 
ITA expects InstaSearch to be particularly useful in reducing the 
response times for more innovative flight search features such as 
``calendar'' features which allow consumers to search for the lowest 
fares for a particular route over a period of weeks or months; and 
``anywhere'' features which enable consumers to explore different 
destinations by specifying a price range, desired activity (e.g., 
beach, golf, skiing) and desired temperature.
    34. QPX's flexible design makes it the tool of choice for Metas. 
Indeed, ITA is the only P&S system currently capable of supporting many 
of the innovative comparative flight search services that are the core 
attraction for these travel sites.
2. Currently Available P&S System Alternatives Are Not Adequate 
Substitutes for QPX
    35. The three GDSs--Sabre, Travelport and Amadeus--license P&S 
systems to third-parties (generally OTAs), but usually as part of a 
broader software package that includes booking and ticketing 
functionality. In addition, one of the OTAs, Expedia, has a proprietary 
P&S system to support its own travel Web site, which is based on a GDS 
product, but it has never licensed its system to third parties.
    36. QPX's significant qualitative advantages have prompted some 
OTIs with ready access to a GDS or proprietary P&S system to license 
QPX. For example, Hotwire, an OTA, and TripAdvisor, a Meta, license QPX 
even though their corporate affiliate, Expedia, owns and operates its 
own proprietary P&S system. Similarly, Orbitz and Cheaptickets are 
part-owned (48%) by Travelport, one of the GDS firms, but have opted to 
license ITA's QPX

[[Page 21020]]

because it provides superior flight search functionality.
    37. ITA has a superior flight search tool and is driving innovation 
in P&S system technology. Although the GDS firms and Expedia have 
responded by improving their P&S systems, they continue to be followers 
rather than leaders. As competition both in P&S systems and comparative 
flight search services is driven increasingly by innovation, the GDS 
firms have been unable to close the gap allowing ITA to progressively 
grow its share.
3. Google Will Have the Incentive To Foreclose Rivals' Access to QPX
    38. The proposed merger will eliminate ITA as an independent and 
unique source of P&S system technology for competing OTIs, potentially 
stripping these sites of the technology needed to support their 
existing comparative flight search services, and delaying or deterring 
their efforts to develop new flight search features. After the merger, 
Google would have the ability to use its ownership of QPX to foreclose 
or disadvantage rivals of Google's travel service. For example, Google 
could refuse to renew existing QPX contracts, refuse to enter into new 
QPX contracts, enter into contracts on less favorable terms than ITA 
would have, or degrade the speed or quality of QPX offered to 
licensees. Unlike ITA, Google plans to develop a travel Web site. 
Therefore, Google will have the incentive to weaken competing OTIs by 
denying or degrading their access to QPX because increased profits from 
driving customers to its new travel service from rival OTIs will likely 
outweigh any lost profits from reduced licensing revenues from QPX.
    39. The elimination of an independent ITA will also reduce travel 
site innovation. ITA partners with many different travel sites, and 
consumers have benefitted from the variety of flight search features 
that these collaborations have produced. Thus, consumers are likely to 
be harmed through reduced innovation and diminished consumer choice in 
the comparative flight search services market.
    40. Finally, the proposed merger will provide Google access to 
competitively sensitive information from competing OTIs relating to 
their use of QPX, including tuning parameters and plans to offer new or 
improved services. Disclosure of such competitively sensitive 
information from competitors to Google will likely harm competition in 
the market for comparative flight services.

E. Difficulty of Entry in the Comparative Flight Search Services Market

    41. The proposed merger would raise entry barriers into the 
comparative flight search market by placing QPX into Google's hands and 
beyond the reach of potential entrants. P&S systems are a critical 
input to the provision of comparative flight search services. No other 
firm offers a P&S system that is comparable to QPX.
    42. The entry barriers associated with developing a new P&S system 
are extremely high. Indeed, two firms, Vayant and Everbread, have been 
developing P&S systems for several years, but have yet to garner any 
significant U.S.-based OTIs as customers. In addition, Google looked at 
developing its own P&S system as an alternative to acquiring ITA but 
concluded it would take several years and require numerous engineers 
due to the complexity of the algorithms.

VI. Violation Alleged

    43. The United States incorporates the allegations of paragraphs 1 
through 41 above.
    44. The proposed transaction between Google and ITA would likely 
substantially lessen competition in interstate trade and commerce in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18, in the market 
for comparative flight search services in the United States.

VII. Relief Requested

    45. The United States request that:
    a. The proposed merger of Google and ITA be adjudged to violate 
Section 7 of the Clayton Act, 15 U.S.C. 18;
    b. Google and ITA be enjoined from carrying out the proposed merger 
or carrying out any other agreement, understanding, or plan by which 
Google and ITA would acquire, be acquired by, or merge with each other;
    c. The United States be awarded their costs of this action; and
    d. The United States receive such other and further relief as the 
case requires and the Court deems just and proper.

Dated: April 8, 2011.

    Respectfully submitted,

    For Plaintiff United States:
Katherine B. Forrest,
Deputy Assistant Attorney General.

Joseph F. Wayland,
Deputy Assistant Attorney General.

Patricia A. Brink,
Director of Civil Enforcement.

James J. Tierney,
(DC Bar  434610),
Chief.

Scott A. Scheele
(DC Bar  429061), Assistant Chief, Networks and Technology 
Enforcement Section.

Aaron D. Hoag,
Attorney, Networks and Technology Enforcement Section, Antitrust 
Division, U.S. Department of Justice, 450 Fifth Street, NW., 7th 
Floor, Washington, DC 20530. Telephone: (202) 307-6153. Fax: (202) 
616-8544. E-mail: aaron.hoag@usdoj.gov.

Michael D. Bonanno,
(DC Bar  998208),
Kent Brown,
Pam Cole,
Aaron Comenetz
(DC Bar  479572),
Lauren I. Dubick,
John F. Greaney,
F. Patrick Hallagan,
Danielle G. Hauck,
Anurag Maheshwary
(DC Bar  490535),
Alexander Paul Okuliar
(DC Bar  481103),
Kathleen S. O'Neill,
Adam T. Severt,
Ryan S. Struve
(DC Bar  495406),
Jennifer A. Wamsley
(DC Bar  486540),
Attorneys for the United States.

Certificate of Service

    I, Aaron D. Hoag, hereby certify that on April 8, 2011, I caused a 
copy of the Complaint to be served on defendants Google Inc. and ITA 
Software, Inc. by mailing the document via e-mail to the duly 
authorized legal representatives of the defendants, as follows:

For Google:
John D. Harkrider,
Axinn, Veltrop & Harkrider LLP, 114 West 47th Street, New York, NY 
10036, E-mail: jdh@avhlaw.com.

For ITA:

Michele Sasse Harrington, Hogan Lovells US LLP, 555 Thirteenth 
Street, NW., Washington, DC 20004. E-mail: 
michele.harrington@hoganlovells.com.

For Plaintiff United States of America

Aaron D. Hoag, Attorney, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street, NW., 7th Floor, Washington, DC 20530. 
Tel: (202) 307-6153. Fax: (202) 616-8544. E-mail: 
aaron.hoag@usdoj.gov.

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Google Inc., and ITA 
Software, Inc., Defendants.

Civil Action No. 1:11-cv-00688.
Filed: 4/8/2011.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment

[[Page 21021]]

submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of This Proceeding

    On July 1, 2010, Google Inc. (``Google'') entered into a merger 
agreement to acquire ITA Software Inc. (``ITA'') for $700 million. ITA 
develops and licenses a software product called ``QPX.'' QPX is used by 
many airlines, online travel agents and online travel search sites to 
provide extremely complex and customized flight search functionality to 
consumers. QPX has unique capabilities and acts as a type of mini-
search engine for travel sites. When a customer wants to know the 
availability and cost of flights from Boston to San Francisco, for 
example, QPX is the tool that provides the answer.
    Google intends to offer an online travel search product that will 
compete with existing travel search sites that provide the ability to 
search for airfares across a range of airlines, many of whom use QPX; 
these Web sites are referred to as Online Travel Intermediaries 
(``OTIs''). In essence, Google is acquiring a critical input not 
previously owned by a company that is a horizontal competitor to users 
of ITA. This transaction therefore posed a significant risk that Google 
could use the acquisition to foreclose rivals or unfairly raise their 
costs. Accordingly, the United States brought this lawsuit against 
Google and ITA on April 8, 2011, seeking to enjoin the proposed 
transaction. Following a thorough investigation, the United States 
believes that, unless enjoined, the likely effect of the transaction as 
proposed by the parties would be to lessen competition substantially 
for comparative flight search services in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18. This loss of competition likely would result 
in reduced innovation and reduced consumer choice in the comparative 
flight search market.
    Simultaneous with the filing of the Complaint, the United States 
also filed a proposed Final Judgment designed to remedy the Section 7 
violation. The Final Judgment does not settle any claims which may 
arise under any other provisions of the laws, including Section 2 of 
the Sherman Act.
    Under the proposed Final Judgment, which is explained more fully 
below, Defendants are subject to a variety of affirmative obligations, 
all of which are designed to ensure ongoing access to QPX for current 
ITA licensees and to enable new entrants or new licensees to obtain the 
QPX software on fair, reasonable, and non-discriminatory terms. The 
licensing provisions require Google to honor existing QPX licenses for 
OTIs, renew existing licenses under similar terms and conditions, and 
offer licenses to any OTIs not under contract on fair, reasonable, and 
non-discriminatory terms, judged in reference to similarly situated 
entities. Google must continue with the development of ordinary course 
upgrades and enhancements to QPX, and must devote substantially as many 
resources to research and development for QPX as ITA did prior to the 
acquisition. Google must license InstaSearch, an add-on to QPX which 
enables consumers to enter more flexible and creative queries in 
searching for flights. Google must observe strict firewall commitments 
to ensure the confidentiality of licensee information. In addition, 
Google must report certain complaints that it has directly or 
indirectly treated OTIs unfairly. This obligation will enable OTIs who 
believe that Google has acted in an unfair manner with respect to 
flight search advertising \1\ to make complaints and have written 
complaints brought directly to the attention of the Department of 
Justice.
---------------------------------------------------------------------------

    \1\ Google has the largest online search engine and generates 
revenue through the sale of online advertising.
---------------------------------------------------------------------------

    Google's affirmative obligations ensure that OTIs will have 
continued access to QPX after the merger, while preserving Google's 
ability to use QPX and ITA's engineering talent as a platform for 
developing new and innovative flight search services for consumers. The 
proposed Final Judgment therefore strikes an appropriate balance 
between competing interests by preserving the potential significant 
efficiencies from the combination of Google's and ITA's complementary 
expertise while redressing the potential for anticompetitive 
foreclosure that could result from the acquisition.
    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA, unless 
the United States withdraws its consent. Entry of the proposed Final 
Judgment would terminate this action, except that this Court would 
retain jurisdiction to construe, modify, and enforce the proposed Final 
Judgment and to punish violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Comparative Flight Search Industry

    Over the past decade, consumer access to direct search and booking 
of air travel has been revolutionized. The Internet has provided 
consumers with tools that enable them directly to search for customized 
itineraries. Innovation in flight search tools has provided consumers 
with quick and convenient access to the most responsive and useful 
itineraries and prices. Two different types of Web sites enable U.S. 
consumers to conduct Internet searches for domestic flight prices, 
schedules, and seat availability on multiple airlines simultaneously: 
Online travel agencies (``OTAs'') and travel meta-search engines 
(``Metas''). In many respects, OTAs function like the online equivalent 
of brick and mortar travel agents, assisting users in identifying 
travel options and then in booking the consumer's choice. Examples of 
OTAs are Expedia, Travelocity, and Priceline. By contrast, the so-
called Metas, such as Kayak, TripAdvisor, and Bing Travel, provide 
highly differentiated products with broad search capabilities--
functioning almost like mini-search engines to enable consumers to 
search for flights. The Metas, however, do not offer direct booking 
services (i.e., to purchase a ticket, consumers must click a link to an 
airline's Web site or to an OTA). The largest Metas are all powered by 
QPX. In addition to providing comparative flight search services, both 
Metas and OTAs often enable consumers to search for other travel 
products and services such as hotel rooms, rental cars, and vacation 
packages. When described together, OTAs and Metas constitute OTIs.
    To perform a flight search on any OTI, a consumer typically enters 
an origin and destination city and desired travel dates. The OTI then 
provides a number of options on different airlines with varying routes 
and pricing. Some travel sites--particularly the Metas powered by QPX, 
which has some unique capabilities and advantages--also offer more 
sophisticated and innovative flight search features, such as a fare 
predictor that allows consumers to identify the best time to buy a 
ticket for a particular trip, or an ``anywhere'' feature that allows 
them to explore different destinations by specifying a desired price 
range, activity, and/or temperature at the destination.
    To provide flight search functionality, OTIs rely on pricing and 
shopping (``P&S'') systems. ITA's QPX is a sophisticated P&S system 
that is

[[Page 21022]]

differentiated in several respects from its competitors. P&S systems 
include not only the engine that performs the search, but also on-going 
access to seat and fare class availability data. When a consumer on a 
OTI Web site submits a flight query (e.g., Boston to San Francisco, 
departing March 1, 2011, returning March 14, 2011), the Web site sends 
the query to the P&S system. The P&S system accesses the fare, 
schedule, and seat availability information of multiple airlines, and 
uses a sophisticated algorithm to analyze the flight possibilities and 
convert the query into a list of available flight options. It sends 
these options back to the OTI, which presents the available flight 
options to the consumer in a format that facilitates comparison (e.g., 
organized by price, departure or arrival time, or number and length of 
connections). QPX is a highly accurate and well developed P&S system.

B. The Defendants and the Proposed Transaction

    Google's principal business is an online search engine. Measured by 
the number of search queries or advertising revenue, Google is the 
largest search engine by far. See Author's Guild v. Google, No. 05 Civ. 
8136 (DC), 2011 WL 986049, at *12 (S.D.N.Y. Mar. 22, 2011) (recognizing 
``Google's market power in the online search market''). In 2009, Google 
earned more than $23 billion in revenues in the United States. Google 
derives nearly all of its revenue from online search advertising, or 
the ads accompanying search engine results.
    Google's only significant online search engine competitor is Bing, 
which has a much smaller share of both queries and advertising revenue. 
In addition to providing general purpose search engines, Google and 
Bing also provide specialized search sites, known as ``vertical'' 
sites. Bing, for example, offers a travel site that utilizes QPX to 
provide comparative flight search services. In conjunction with its 
acquisition of QPX, Google has announced its intention to launch new 
travel search functionality on its Web sites.
    ITA is the leading producer of P&S systems in the United States. 
ITA's software is widely used by airlines and OTIs to search for, 
price, and display results for airline travel queries.
    On July 1, 2010, Google and ITA entered into a merger agreement. 
Unremedied, this transaction would provide Google with the incentive 
and ability to foreclose rivals (actually or effectively) from the 
comparative flight search market. This could be accomplished by 
preventing licensees and potential licensees access to the leading 
comparative flight search product, QPX, or by hobbling them by failing 
to continue development at levels commensurate with the pre-merger 
environment. This would diminish competition in this market and 
effectively diminish consumer choice. The transaction would 
substantially lessen competition in the comparative flight search 
market and is the subject of the Complaint and proposed Final Judgment 
filed by the United States in this matter.

C. Relevant Markets

    Antitrust law, including Section 7 of the Clayton Act, protects 
consumers from anticompetitive conduct, such as firms' acquisition of 
the ability to raise prices or reduce choice. Market definition assists 
antitrust analysis by focusing attention on those markets where 
competitive effects are likely to be felt. Well-defined markets 
encompass the economic actors including both sellers and buyers whose 
conduct most strongly influences the nature and magnitude of 
competitive effects. To ensure that antitrust analysis takes account of 
a broad enough set of products to evaluate whether a transaction is 
likely to lead to a substantial lessening of competition, defining 
relevant markets in merger cases frequently begins by identifying a 
collection of products or set of services over which a hypothetical 
monopolist profitably could impose a small but significant and non-
transitory increase in price.
    Here, the United States's investigation revealed that all OTIs rely 
on a P&S system, such as ITA's QPX, to drive the comparative airfare 
search offerings such Web sites offer their users. Should one company 
control all P&S systems, OTIs would have no alternative products to 
which they could turn to defeat a price increase. As such, the market 
for P&S systems is a relevant product market.
    The comparative flight search market is an additional relevant 
market implicated by this merger. The market participants are OTIs that 
offer the ability for users to compare flights and prices across 
different airlines. Comparative flight search is a relevant market 
because there are no reasonable substitutes consumers could turn to if 
a company controlling all comparative flight search Web sites reduced 
the quality of its service. Airline Web sites and reservation lines are 
not reasonable substitutes because they do not offer the comparative 
aspect of OTIs. Brick and mortar travel agents are also not reasonable 
substitutes because travel agents do not provide the same sort of user 
control, instantaneous response, and flight search flexibility as OTIs. 
Accordingly, comparative flight search services is a relevant product 
market.
    Antitrust analysis must also consider the geographic dimensions of 
competition. Here, the relevant markets exist within the United States 
and are not affected by competition outside the United States. The 
competitive dynamics for both markets is distinctly different outside 
the United States.

D. Competitive Effects

    Since its introduction to the market in 2001, ITA has been the 
leader in P&S systems. ITA has won nearly every competition for 
business in the United States in which the customer did not already 
have a P&S system in place. ITA has also lost very few customers due to 
its ability to provide highly and uniquely customized P&S 
functionality. ITA's customers include two of the five largest OTAs in 
the United States, and all five of the largest Metas. ITA's P&S system, 
QPX, has an advantageous position against its competitors in terms of 
speed, configurability, and accuracy. QPX consistently leads the 
industry in innovation. In short, ITA has a leading position in P&S 
systems. From a competition perspective, ITA's corporate independence 
from any particular OTI ensures that all of its customers receive the 
benefits of ITA's cutting edge innovation--i.e., there is currently no 
vertically integrated OTI owned by ITA that receives favorable 
treatment relative to ITA's other customers.
    This will not be the case once Google purchases ITA. Google intends 
to launch a new service after completing the transaction that will 
compete directly with other OTIs by providing flight search results. 
Because so many OTIs rely on ITA as an input to their services, Google 
will have the ability and incentive to either shut off access to ITA to 
those competitors, or degrade the quality of QPX that is available to 
those competitors. Such actions in the upstream pricing and shopping 
market would substantially reduce competition in the downstream 
comparative flight search market.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment sets forth: (1) Requirements regarding 
the parties' continued licensing and improvement of QPX; (2) 
requirements regarding the parties' licensing of InstaSearch, a new 
flight search technology under development by ITA; (3) procedures for 
resolving disputes

[[Page 21023]]

between OTIs and the parties regarding licensing of QPX or InstaSearch; 
(4) requirements for the creation of a firewall at the parties' 
business regarding use of competitively sensitive information gained 
through provision of QPX or InstaSearch services; and (5) oversight 
procedures the United States may use to ensure compliance with the 
proposed Final Judgment. Section IX of the proposed Final Judgment 
states that these provisions will expire five years after entry of the 
proposed Final Judgment.
    As discussed earlier, the United States' concerns regarding the 
proposed transaction revolve around Google's ability and incentive to 
weaken its competitors in the comparative flight search market by 
denying or degrading their access to QPX. Denying or degrading rivals' 
access to QPX would potentially diminish competition in the comparative 
flight search market. Therefore, as discussed in more detail below, the 
key remedies embodied within the proposed Final Judgment include 
guarantees that the key products on which OTIs rely will continue to be 
available in a robust fashion for at least five years after the entry 
of the Final Judgment. Five years will provide those OTIs that do not 
wish to be dependent on Defendants' P&S system a sufficient period of 
time to switch to an alternative system.

A. Licensing and Improving of QPX

    Section IV.A-G of the proposed Final Judgment preserves competition 
for OTIs by creating a legally enforceable commitment that Defendants 
will continue to license and improve QPX. Sections IV.A-C require 
Defendants to honor the terms of all QPX agreements in effect as of the 
entry of the Final Judgment, negotiate extensions to existing QPX 
agreements with any OTI on the terms set forth in the OTI's existing 
contract for up to five years from the entry of the Final Judgment, and 
negotiate new QPX agreements with any OTI who is not party to an 
existing QPX agreement on terms that are fair, reasonable, and non-
discriminatory.
    Section IV.D prohibits Defendants from entering into any new QPX 
agreement that would prevent an OTI from using alternative products to 
QPX. Defendants and an OTI, however, are free to enter into an 
exclusive QPX agreement if Defendants offer a non-exclusive agreement 
on fair, reasonable, and non-discriminatory terms.
    Section IV.E requires Defendants to make available to OTIs ordinary 
course upgrades to QPX at the same price those upgrades are made 
available to other customers. Section IV.F requires Defendants to 
devote substantially the same resources to the research and development 
and maintenance of QPX for the use of customers as ITA did in the 
average of the two years prior to the filing of the Complaint. This 
requirement eases concerns that post-merger Defendants will let the QPX 
product languish without committing resources to improve it over time.
    Finally, Google intends to introduce a new travel search service 
that will include airfare pricing and shopping functionality. Section 
IV.G provides that Defendants are not required to offer OTIs any 
product, service or functionality that Google develops exclusively for 
its new travel search service.

B. Licensing of InstaSearch

    Prior to the proposed transaction, ITA was developing a product, 
called InstaSearch, for license to customers that promised to be the 
next generation in pricing and shopping services. InstaSearch was being 
developed to use a cache of results to provide instantaneous or near-
instantaneous results to airfare search queries. One concern of the 
proposed transaction is that Google will prevent this innovative 
product from being made available to its OTI competitors. As such, the 
decree aims to ensure InstaSearch is available for license.
    Sections IV.H-J of the proposed Final Judgment preserves 
competition for OTIs by requiring Defendants to negotiate InstaSearch 
agreements for terms up to five years from the entry of the Final 
Judgment. While ITA developed InstaSearch for future sale, it has not 
sold a commercial version of the product to any customers. ITA, 
however, has entered into a contract with one customer to deliver a 
``proof of concept'' implementation of InstaSearch. The proposed Final 
Judgment requires Defendants to offer OTIs at least the same 
functionality as contained in the proof of concept attached to the 
proposed Final Judgment, and requires Defendants to make commercially 
reasonable efforts to ensure that the InstaSearch implementation 
conforms to the proposed technical specifications. Should Defendants 
provide an InstaSearch implementation to any of their customers that is 
superior to the version envisioned by the proof of concept, the 
proposed Final Judgment requires Defendants to make that improved 
product available to all OTIs. Finally, the proposed Final Judgment 
allows Defendants to charge fair, reasonable and non-discriminatory 
fees for InstaSearch.

 C. Arbitration Provisions

    The proposed Final Judgment requires that the Defendants negotiate 
in good faith with any OTI, but also sets forth certain procedures by 
which Defendants and OTIs can resolve disputes over the fees charged 
for any type of service should Defendants and an OTI not reach 
agreement over fees. As described in Sections IV.K-M, Defendants shall 
submit to binding arbitration over the disputed fees once certain 
conditions have been met. The Defendants and the OTI must, prior to 
submitting a matter to arbitration, designate a person at each company 
with the authorization to resolve the dispute in a final and binding 
fashion, and those individuals must meet in an attempt to resolve a 
dispute. Additionally, prior to Defendants' being obligated to enter 
into binding arbitration with an OTI, that OTI must certify to the 
United States that it negotiated in good faith with Defendants, and 
further receive consent of the United States to initiate arbitration. 
Upon receiving consent of the United States to initiate arbitration, 
the OTI may commence arbitration through the American Arbitration 
Association. The parties may agree to suspend the arbitration 
proceedings to attempt to resolve the dispute.
    These procedures ensure that Defendants negotiate in good faith 
with all OTIs, and that if an agreement cannot be reached between the 
OTI and Defendants on a price term, that a resolution can be had 
quickly by an impartial third party using clear benchmarks from 
existing contracts. For non-price terms, the traditional decree 
enforcement provisions will provide the mechanism for resolving 
disputes.

D. Additional Provisions

    Section V of the proposed Final Judgment prohibits Google from 
taking certain actions that could undermine the purpose of the proposed 
Final Judgment. Access to airline seat and booking class information is 
a critical input to a P&S system. To ensure that Defendants do not 
restrict access to this crucial information, Section V.A prohibits 
Defendants from entering into agreements with an airline that restricts 
the airline's right to share seat and booking class information with 
Defendants' competitors, unless one or more airlines enter into 
exclusive agreements with a competitor. Subject to certain limitations, 
Sections V.B-C require Google to make available to OTIs any seat and 
booking class information Defendants obtain for use in Google's new 
flight search service. Finally, Section V.D prohibits Defendants from

[[Page 21024]]

conditioning the provision of QPX or InstaSearch on whether or how much 
an OTI spends on other products or services sold by Google.

E. Firewall Requirements

    As alleged in the Complaint, Defendants could use information and 
data gained through contracts with OTIs to then compete with those 
OTIs. Section VI of the proposed Final Judgment requires Defendants to 
establish a firewall at the company to prevent the misappropriation of 
competitively sensitive information and data. That section requires 
that Defendants only use an OTI's confidential information for the 
provision of any product or service to that specific OTI, for routine 
administrative or financial purposes, or for the continued development 
and improvement of QPX or InstaSearch. Google may use more limited 
query information, which does not include data regarding how OTIs 
configure the QPX product, for the improvement of Defendants' airfare 
pricing and shopping engines. Section VI.A prohibits, subject to a 
small list of exclusions, employees working on Google's travel search 
product from accessing confidential OTI information. Section VI.D 
requires Defendants to implement procedures to prevent confidential 
information from being used or accessed by employees other than those 
having a legitimate need for such information. Finally, Section VI.E 
requires the Defendants to submit its proposed procedures to the United 
States for its approval or rejection of those procedures.

F. Compliance

    To facilitate monitoring of Defendants' compliance with the 
proposed Final Judgment, Section VII grants the United States access, 
upon reasonable notice, to Defendants' records and documents relating 
to matters contained in the proposed Final Judgment. Defendants must 
also make their employees available for interviews or depositions about 
such matters. Moreover, upon request, Defendants must answer 
interrogatories and prepare written reports relating to matters 
contained in the proposed Final Judgment.
    In addition, Sections IV.N-O requires Google to create a Web site 
where OTIs can access a copy of the proposed Final Judgment and submit 
complaints that Google is violating the terms of the proposed Final 
Judgment or is acting, directly or indirectly, in an unfair manner in 
connection with flight search advertising in the United States. Google 
must provide copies of these complaints to the United States for a 
period of time from the earlier of five years from entry of the 
proposed Final Judgment, or two years from the date Google launches its 
new travel flight search service.

IV. Remedies Applicable to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in Federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. Procedures Applicable for Approval or Modification of the Proposed 
Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register, or the last date of publication in a newspaper of 
the summary of this Competitive Impact Statement, whichever is later. 
All comments received during this period will be considered by the 
United States, which remains free to withdraw its consent to the 
proposed Final Judgment at any time prior to the Court's entry of 
judgment. The comments and the response of the United States will be 
filed with the Court and published in the Federal Register.
    Written comments should be submitted to: James J. Tierney, Chief, 
Networks & Technology Enforcement Section, Antitrust Division, United 
States Department of Justice, 450 Fifth Street, NW., Suite 7100, 
Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, seeking preliminary and permanent injunctions against 
Defendants' transaction and proceeding to a full trial on the merits. 
The United States is satisfied, however, that the relief in the 
proposed Final Judgment will preserve competition in the comparative 
flight search market. Thus, the proposed Final Judgment would protect 
competition as effectively as would any remedy available through 
litigation, but avoids the time, expense, and uncertainty of a full 
trial on the merits.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a 60-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the Court's inquiry is necessarily a limited one as the United States 
is entitled to ``broad discretion to settle with the Defendant within 
the reaches of the public interest.'' United States v. Microsoft Corp., 
56 F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d 1

[[Page 21025]]

(D.D.C. 2007) (assessing public interest standard under the Tunney 
Act); United States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 
76,736, 2009 U.S. Dist. LEXIS 84787, No. 08-1965 (JR), at *3 (D.D.C. 
Aug. 11, 2009) (noting that the court's review of a consent judgment is 
limited and only inquires ``into whether the government's determination 
that the proposed remedies will cure the antitrust violations alleged 
in the complaint was reasonable, and whether the mechanism to enforce 
the final judgment are clear and manageable'').\1\

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for a court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    Under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the United States's complaint, whether the decree is 
sufficiently clear, whether enforcement mechanisms are sufficient, and 
whether the decree may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d 
at 1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 
(D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have 
held that:

    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is `within the reaches of the public 
interest.' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States's prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).

    \2\  Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.' '').
---------------------------------------------------------------------------

    In addition, ``a proposed decree must be approved even if it falls 
short of the remedy the court would impose on its own, as long as it 
falls within the range of acceptability or is `within the reaches of 
public interest.' '' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 
131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v. 
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. 
Maryland v. United States, 460 U.S. 1001 (1983); see also United States 
v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) 
(approving the consent decree even though the court would have imposed 
a greater remedy). To meet this standard, the United States ``need only 
provide a factual basis for concluding that the settlements are 
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 
F. Supp. 2d at 17.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009 
U.S. Dist. LEXIS 84787, at *20 (``[T]he `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged.''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d. at 1459-60. 
Courts ``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). This language effectuates what 
Congress intended when it enacted the Tunney Act in 1974, as Senator 
Tunney explained: ``[t]he court