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Two New Suits May Make Google Pant
Jul 18, 2007 11:37 AM
, By Brian Quinton
Google’s being drawn into court again in two lawsuits—one in the U.S., another far abroad-- that could influence how the company conducts its pay-per-click advertising business. In the first action, the search giant is being sued by an Australian competition watchdog agency for allegedly deceiving users over the question of paid links that look like organic search results. The Australian Competition and Consumer Commission, an independent Australian government body with statutory authority, has filed a suit in Australian federal court maintaining that Google has failed to adequately distinguish paid “sponsored links” from its index of natural search results. While Google identifies keyword-triggered pay-per-click ads as such in the box above the natural listings and along the right rail of the search results page, the ACCC claims that including Web pages from those advertisers in the organic results section without identifying them as sponsors is an unfair trading practice. The suit grows out of an investigation by the ACCC of a 2005 complaint from two Australian auto dealers that Google users who looked up their brands were being shown a sponsored link to a newspaper offering used-car listings. The paper had bid on the dealer names as keywords for serving its pay-per-click ads. Google has faced numerous lawsuits over its practice of allowing advertisers to use competitors’ trademarks as keywords, and has won most of them in the U.S. But the ACCC says this suit is the first to call into question Google’s involvement in possible unfair trading practices. “While Google has faced court action overseas, particularly in the U.S., France and Belgium, this has generally been in relation to trademark use,” the commission said in a release. “Although the U.S. Federal Trade Commission has examined similar issues, the ACCC understands that it is the first regulatory body to seek legal clarification of Google’s conduct from a trade practices perspective.” The ACC wants Google to make it clearer when search results are also paid advertisers, to acknowledge any wrongdoing and to defray full legal costs. A Google spokesman was quoted as saying that it will fight the case in court and described the suit as “an attack on all search engines.” In the second suit Google is not a defendant but a subpoenaed witness, but that may be small consolation. Salt Lake City-based Sport Court, a manufacturer of sports flooring, has charged that Rhino Sports, a Scottsdale AZ competitor, placed AdWords bids on the keywords “sport court” to get its sponsored links next to search results for Sport Court. That violates an earlier injunction preventing Rhino from using the Sport Court mark in e-commerce (the suit dates back to 2002.) Earlier this year Sport Court brought Rhino back before a judge, maintaining that a Rhino pay-per-click ad turned up alongside a Google search for “sport court”. But Rhino countered that the ad didn’t use the term in copy and that the company did not bid on “sport court”: Rather, it bid on broad matches for the terms “court” and “basketball court”, and Google itself made the connection to the “sport court” keyword trigger. That argument led the judge to dismiss the contempt complaint against Rhino. But in mid-June Sports Court served Google with a subpoena, asking for a lot of internal disclosure including records of all purchases of the “sport court” keyword, the cost per click calculations associated with those buys, estimated ad positions for the keyword and the search volume trends for the term. Eric Goldman, assistant law professor at Santa Clara University and director of that school’s High Tech Law Institute, points out in his blog that this kind of data could be very valuable to a number of parties, from other trademark owners to search engine optimizers everywhere, and that Google seems willing to supply it. He notes that the company sent out an e-mail in late June to buyers of the “sport court” keyword informing them of the subpoena. The note further says that unless these buyers move to quash that subpoena, Google will assume they have no objection and go ahead and supply the requested data. And those buyers are on their own. “Unfortunately, Google is not in a position to provide you with legal advice,” the note concludes. “Maybe I’m not aware of how common these types of subpoenas to search engine are, but this data sounds like it would have significant competitive value,” Goldman writes. “This data may be yours for the price of a complaint and a subpoena.” “These subpoenas of keyword purchase data might be routine. But my instincts tell me they aren’t common yet, but they will be in the near future.” |
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