Lawsuit Says Google Was Unfair to Rival Site
By MIGUEL HELFT
A small Web site operator filed an antitrust suit against Google on Tuesday, accusing it of unfairly manipulating its advertising system to harm a potential competitor.TradeComet.com, which operates a site called SourceTool.com, a vertical search engine for those seeking business products and services, accused Google of raising the advertising rates it charged the company after it realized that SourceTool was a potential competitor.
TradeComet also said that Google entered into an anticompetitive agreement with Business.com, a SourceTool rival, which despite having a similar business model was offered more favorable advertising terms.
“Google understood the threat that vertical search engines posed to its business model,” said Jonathan Kanter, a partner in Cadwalader Wickersham & Taft.
Mr. Kanter’s firm represents Microsoft in antitrust matters. Mr. Kanter said Microsoft “has no involvement in this matter at all.” Google said it had not reviewed the complaint in detail. “But as we have consistently made clear, the advertising market in which Google operates is highly competitive and advertisers have a huge range of choices,” said Andrew Pederson, a Google spokesman.
Ben Hanna, a vice president for marketing at Business.com, said his company had no special relationship with Google.
TradeComet said that Google initially welcomed SourceTool, which bought ads on Google to drive traffic to its site.
That traffic grew quickly, reaching 650,000 visitors a day. By the following year, however, Google increased the prices that SourceTool had to bid for its ads by as much as 10,000 percent, the company charged.
Google uses a proprietary algorithm to assign “quality scores” to advertisers’ sites, using measures like the apparent usefulness of the sites. Advertisers with low scores have to pay more for their ads, and many advertisers have complained that Google can use the system to manipulate prices.
Last year, SourceTool urged the Justice Department to block a proposed search advertising partnership between Google and Yahoo. Its story became the subject of a column in The New York Times.
After the Justice Department notified Google and Yahoo that it planned to file suit to block the agreement, Google abandoned the partnership.
Legal experts said that the lawsuit appeared to be fallout from the Justice Department review of the partnership, which concluded that Google’s market share in search advertising amounted to a monopoly. But they were split on the merits of the case.
“I do believe that this properly alleges harm to competition, not just harm to one plaintiff,” said Samuel Miller, a partner at Sidley Austin in San Francisco.
But EricMr. Goldman, a law professor at Santa Clara University, cast a skeptical eye on TradeComet’s accusations , noting that courts had dismissed a similar antitrust case against Google. “We’ve heard all these arguments before and they haven’t gotten much traction,” Mr. Goldman said.
source : The new york times
