Google is reportedly talking to the Department of Justice, negotiating conditions on its proposed $700 million acquisition of ITA Software, in a bid to forestall a DOJ move to block the deal.
The Wall Street Journal reports that antitrust investigators have had a flurry of meetings with Google and members of FairSearch.org, the coalition spearheading opposition to the acquisition.
One of the ideas under discussion, according to the report, is a consent decree that would require Google to continue licensing ITA Software's QPX airfare shopping and pricing system to existing clients "at a reasonable price" and to ensure that upgrades would be provided.
Contract renewals and access to any innovations that ITA Software makes under Google ownership are key sticking points for clients, although FairSearch.org has stated publicly that it would only be satisfied if the DOJ kills the acquisition outright.
However, FairSearch.org's all-or-nothing stance, may be a negotiating position of its own.
Some regulators are said to believe that such a licensing agreement would be unworkable given the pace of technology change.
Google has countered DOJ demands with the argument that it shouldn't be required to provide rivals with updates containing key innovations to QPX, the Wall Street Journal says.
Google's objections, if true, confirm the fears of deal opponents -- that innovations to QPX would pass them by.
Google also is said to be resisting a consent decree, fearing this would set a precedent for other major acquisitions in the future.
But, signing on to a consent decree may be the only way Google can head off an all-out DOJ full-court press against the deal -- and possibly a wider investigation of Google's practices across many verticals.
"Google has been pressing the Justice Department to wrap up the merger review quickly, and it might therefore be keen to settle to get the deal done," the Wall Street Journal says.
These latest developments signal how far sentiment has shifted since Google announced July 1 that it intended to buy ITA Software. At that juncture, most observers thought the acquisition would sail through because Google and ITA Software operate in different sectors, search/advertising and travel data, respectively.
FairSearch, whose members include companies such as Expedia, Sabre, Kayak and Farelogix, have managed to make some credible arguments to regulators, who have had to become quick studies in a very complex arena -- the ever-changing swath of airfare shopping and pricing.
Opponents of the deal have also managed to tap into a line of reasoning that Google has become too powerful in a variety of verticals and must be reined in.