Will Google's ITA Merger Fly with U.S. Regulators?

Google's (GOOG) $700 million acquisition of ITA Software could be in jeopardy: The U.S. Justice Department is considering an antitrust lawsuit to challenge the pending merger, according to Bloomberg News.

The operator of the world's largest search engine agreed to buy ITA, which supplies the largest airfare-pricing platform, back in July. Government lawyers expanded their investigation into the merger a month later. Then in December, Google invoked a legal provision that triggers a 30-day deadline for the government to decide whether to challenge a pending merger, unidentified sources told Bloomberg News. Some Justice Department attorneys cancelled holiday plans to compile documentation for a claim, according to the story.

The potential acquisition has spurred opposition from online travel agency Expedia (EXPE), global distribution operator Sabre Holdings and other companies, who've said the merger would likely stifle competition and innovation, ultimately hurting consumers. Last October, Expedia, Sabre and others formed a coalition called FairSearch.org to pressure the Justice Department to challenge the proposed deal. Google has maintained that the acquisition would spur innovation and help the online travel industry.

At stake is control over a rapidly expanding online travel industry. Forrester Research projects that U.S. online leisure and "unmanaged travel" spending will surge 38% to about $111 billion in 2014 from $80 billion this year, and also forecasts that travel companies will almost double their annual spending on online advertising -- including search, display advertising, mobile and social media -- to about $5 billion in that time.

Google, worth about $183 billion, continues to snap up companies at a rapid pace as it branches out into new technology-related industries. Late last month, the company reportedly bid about $6 billion for online coupon site Groupon, although the bid was rejected.