Investing.com -- U.S. District Judge Amit Mehta's ruling in the Google (NASDAQ:GOOGL) Search antitrust case is set to reshape online travel by curbing Google's ability to secure exclusive search agreements.
Bernstein analysts described the development as "good news for the OTAs," noting that any limitation of Google's disruptive power in search distribution opens up the market for Booking, Expedia and Airbnb.
One of the most consequential changes is the ban on deals that guaranteed Google default placement on platforms such as Apple and Verizon.
The decision could revive "Apple suggestions," a feature that existed until 2016 but was discontinued under Google's exclusivity contract with Apple.
The report explains that this feature "allowed targeted searches on Safari/Siri to bypass Google to a vertical specific site," meaning a query like "vacation rental Miami" could now lead directly to Airbnb or Booking without the companies having to pay Google.
The ruling also highlights the possibility for OTAs to negotiate directly with device makers.
As Bernstein put it, "Booking could pay an OEM to have its app preinstalled and for all relevant search queries ('Hotels Miami,' 'Flights to London') to be directed to the app."
Analysts added that eliminating what they call the "Google tax" would "near certainly raise the profitability" of OTA-paid search traffic.
Still, the analysts cautioned that Google's strength in travel remains formidable. "Google continues to innovate and Tripadvisor called out changes to the algorithm at their Q2 results for a drop in organic traffic," they said.
With proprietary consumer data and hotel reviews, Google's travel tools help even smaller players target ads effectively, while alternatives such as Bing and DuckDuckGo either lack a dedicated hotel product or rely on biased third-party integrations.
The case is also inseparable from the broader shifts in artificial intelligence. The analysts acknowledged this directly, "AI will nearly certainly take share, but changes to Google Search are still material."
Despite the growing influence of AI-driven discovery tools, Google remains "by far the most important top of funnel player," the brokerage said with Booking itself reporting an increase in Google clicks during the second quarter.
While stressing that it is "premature to conclude that this will meaningfully change estimates or recommendations," the analysts said the ruling "appears to be a positive day for Online Travel Agencies, who have gained an increased chance of disintermediating Google and enjoying a more fragmented top of the funnel."