Feds May Sue Over Google’s Deal To Buy ITA

Google’s bid to acquire travel-search company ITA software is facing a major hurdle, as government lawyers are preparing a lawsuit to block the $700 million deal. Bloomberg and the WSJ both report that the Department of Justice hasn’t made a final decision about whether to file the suit. The government has been scrutinizing the proposed deal since it was announced in July, but Google (NSDQ: GOOG) apparently decided enough is enough, and invoked a law that requires the government to decide within 30 days whether to approve the purchase or file suit.

This isn’t the first time government lawyers have been on the verge of filing an antitrust lawsuit against the search giant. Back in 2008, Google and Yahoo (NSDQ: YHOO) called off a joint advertising agreement because the Department of Justice lawyers were just three hours away from filing an antitrust lawsuit.

The deal has been opposed by some of Google’s competitors, including Microsoft (NSDQ: MSFT) and travel search websites like Expedia and Travelocity. ITA isn’t a name that’s well known by consumers but the company’s software is used by popular travel search sites like Orbitz, Kayak, Hotwire, and Microsoft’s Bing search engine.

A Google spokesman wouldn’t say anything about the lawsuit being prepared, telling the news agencies: “While we continue to cooperate with the Justice Department’s review, we are ultimately confident that this acquisition will increase competition.”