Insurance Claim Undermines myTriggers Lawsuit Against Google
myTriggers recently amended its complaint to include allegations that its data centers overheated in January of 2008, resulting in equipment damage and layoffs. But the insurance claim filed two years ago alleges in far greater detail that the overheating incidents resulted in server crashes, which in turn caused a drop in the company's quality score.
"myTriggers servers went off line in two mission critical times ... causing many of our merchant feeds to become unstable and stale, which directly affected our quality scores from or [sic] keyword advertising partners," the company said in a claim it filed with The Hartford Insurance Company in May of 2008. That claim pegged the server damage at around $450,000.
myTriggers added that after the January overheating incidents, it spent three weeks attempting to operate sites at a new data center location. The claim continued: "Then our main search engine vendor, Google raised our keyword prices to the level of inoperability, as we could not provide them with consistent unique content due to the server failures ... We were essentially dead in the water with our largest keyword deployment partner."
That statement -- attributing the keyword price increase to server issues -- appears to damage the company's current contention that its quality score was hiked because its cost-per-action model posed a threat to Google.
myTriggers and Google have been battling in state court in Columbus, Ohio since last year, when Google sued myTriggers for allegedly failing to pay $335,000 in marketing fees. myTriggers filed a counterclaim alleging that Google violated Ohio's antitrust law by raising myTriggers' quality score, which caused the cost of its pay-per-click ads to increase by as much as 10,000 percent.
myTriggers alleged in its counterclaim that the cost hike was anticompetitive on the theory that Google raised prices because myTriggers' cost-per-action model "threatened to undermine Google's revenue model and, ultimately, its dominance in paid search results."
myTriggers' lawyer, Joe Bial, says the company still believes it will prove that Google's "exclusionary conduct" caused myTriggers' almost complete exit from search advertising. "We think, at the end of the day, discovery will show that it's Google's conduct, as alleged in the complaint, that's responsible," Bial says. He adds that myTriggers' quality score remained long after the overheating incidents.
Judge John Bessey in Columbus is expected to hold a hearing on Monday about whether to dismiss the lawsuit on the ground that the federal Communications Decency Act protects Google from liability. That law's "good samaritan" provisions say that Web sites are immune from liability when they take steps to remove potentially objectionable content. Google argues that its actions as a publisher -- including lowering companies' quality scores -- are the type of activity that is protected by the statute.
Ohio Attorney General Richard Cordray recently weighed in against Google on that point. He argues that accepting Google's argument "would immunize an entire industry from the reach of this state's antitrust laws."