Search Marketer Files Antitrust Lawsuit Against Google
Google has been sued by a second search marketer who alleges that Google broke antitrust laws by increasing the cost of the marketer's pay-per-click ads.
The new case, filed earlier this month in Columbus, Ohio state court by comparison shopping search company myTriggers, alleges that Google unlawfully dropped myTriggers' quality score as part of a plan "to ensure that Google can continue to exert control over search advertising." As a result of the quality score change, the cost of myTriggers' search ads allegedly rose by as much as 10,000% -- a price increase that forced the company to virtually stop purchasing search ads, according to the lawsuit.
The price of search ads on Google typically results from a combination of the amount an advertiser bids to appear as a paid-search ad when users query on specific keywords and on the advertiser's quality score, which is based on Google's assessment of the landing page's relevance to the keywords.
But myTriggers alleges in its lawsuit that Google does not hold all search marketers to similar standards when it comes to quality scoring. "On information and belief," the lawsuit alleges, "Google enters into agreements with a number of search websites, including rival shopping comparison sites, that allow these sites to participate in AdWords keyword auctions without being subject to the same 'quality' scoring Google appplies to other search rivals, including myTriggers."
MyTriggers also alleges that it wasn't able to compensate for the drop-off in its search ads on Google by advertising on other search engines. "Due to Google's dominance, rival search sites such as Yahoo and Microsoft could not save myTriggers," the company says in its legal papers.
In addition, myTriggers asserts that it posed a challenge to Google by monetizing many searches on a cost-per-action basis -- a model that, it says, "threatened to undermine Google's revenue model and, ultimately, its dominance in paid search results."
A Google spokesperson said that myTriggers' claims "are entirely without merit" and that the company will "defend vigorously against them."
Meanwhile, Joe Bial, a lawyer with one of myTriggers' law firms -- Cadwalader, Wickersham & Taft -- says he hopes the lawsuit will proceed as quickly as possible. "We think, for these companies that are being put out of business, it's important that these cases move expeditiously," he said.
Cadwalader, Wickersham & Taft also represents Tradecomet.com in a similar antitrust lawsuit filed against Google last year in federal district court in New York. Cadwalader's Charles "Rick" Rule, listed as one of myTriggers' attorneys, has represented Microsoft on some antitrust matters.
MyTriggers.com's CEO, Glenn Meyers of Greenwich, Conn., was among Silicon Alley's most prominent entrepreneurs during the dot-com era. A decade before launching myTriggers, he founded and served as CEO of RareMedium Group, which helped companies develop Web sites and also acquired other companies, including entertainment network Live Universe.
Until 2008, MyTriggers -- which operates three comparison-shopping sites -- had been a big search advertiser on Google. At one point, Google gave myTriggers a $250,000 monthly line of credit for search ads.
The legal dispute between the two companies started last month, when Google sued myTriggers for allegedly failing to pay more than 335,000 in search ad fees. Google brought the case the case in state court in Ohio, despite a provision in the AdWords contract requiring all disputes to be litigated in California. In other cases, Google has attempted to enforce that term in court. Late last week, the company alleged that search marketer Flowbee broke the AdWords contract by bringing a trademark infringement lawsuit against Google in Texas.