Google reaches key antitrust settlement

Larry Page has ended his first week as chief executive of Google with a landmark settlement with US antitrust regulators and a shake-up of the search company’s senior ranks.

The settlement with the Department of Justice, ann-ounced on Friday, will allow Google to proceed with its $700m acquisition of ITA Software, giving it an influential position in travel search and online airline bookings.

It will also subject the company to ongoing monitoring by US antitrust regulators and open a new avenue for rivals to take allegations of unfair treatment by Google to Washington.

The agreement marks the first time Google has acceded to ongoing oversight of part of its business by antitrust regulators, though last month it was forced to accept monitoring of its privacy protections as a result of the scandal that followed its unauthorised collection of personal data as part of its StreetView service.

The regulatory scrutiny comes a month before a US antitrust settlement that has restricted rival Microsoft for nearly a decade is due to expire.

Mr Page, the Google co-founder who took over as chief executive from Eric Schmidt on Monday, has pushed through a high-level reorganisation at the company as it struggles to catch up with Facebook in social networking.

Mr Page has made it clear in recent weeks that he wants to revitalise Google by clearing away unnecessary levels of management and allowing engineers to act more quickly.

The acquisition of ITA, which makes travel search technology and software used by airlines to handle bookings, was fiercely opposed by online travel companies such as Expedia.

It would put Google in a position to use its dominance of the search business to siphon off travel bookings, rather than pass internet users on to specialist sites.

Under a consent decree with US regulators, Google will be required to license out ITA’s technology to other companies, and to set up “firewalls” to prevent information from other companies that use ITA’s systems from leaking into its own operations.

The agreement also sets up a procedure for travel businesses to complain to the justice department if they think they have been treated unfairly by Google’s search engine.

Under the new management structure, six new senior vice-presidents will report directly to Mr Page and have responsibility for product management and engineering in the most important product areas.

They include Vic Gundotra, a former Microsoft executive who was instrumental in mobile efforts and will now be responsible for social, the first time Google has explicitly recognised this as one of its core markets.

Meanwhile, bonuses for all Google employees this year are to include an element determined by whether the company makes headway in social networking.