Antitrust Suit Filed Against Google
We’ve heard the rumors for a long time—the government is eyeing Google as a monopoly. Late last year, the Department of Justice was allegedly hours away from filing an antitrust suit against the search giant, stopping only because Google reneged on its planned ad deal with Yahoo.
But it looks like they might not have to wait for another such pending deal—a company called SourceTool.com is now suing Google in an antitrust filing. A subsidiary of TradeComet.com, SourceTool.com explained its case in a press release (emphasis added):
Google refused to stop engaging in predatory conduct to block search traffic by imposing massive, unjustified price increases. Google’s anticompetitive conduct eliminated TradeComet as a competitor.
SourceTool.com . . . operated a thriving global business-to-business (B2B) search engine enabling buyers of industrial products to easily connect with suppliers. SourceTool.com focused on a specialized type of industrial search, which it positioned as a competitor to Google’s general purpose search engine. . . . [T]he site took off—within months reaching 650,000 visits per day. . . .
“With no notice, Google changed from cheerleader to tyrant when it realized we were a competitive threat,” said Dan Savage, founder and CEO. . . . “For example, Google raised my prices by 10,000 percent, which strangled our business, virtually overnight. Citing an ambiguous quality score determined by a secretive algorithm to justify the price increase, Google refused to consider reductions even after SourceTool.com invested the company’s savings to make the changes that Google said would rectify the supposed problems.”
SourceTool.com is also bringing in the big guns for this one: they’ve hired former head of the United States Justice Department Antitrust Division (and former counsel for Microsoft during their antitrust settlement) Rick Rule as their lawyer.
However, as TechDirt says, Google is making at least a little money off SourceTool.com (the press release said they were reinvesting up to $500,000/month on PPC ads). Detractors to the company and the case say that SourceTool.com is little more than a PPC arbitrage site.
In the end, as we all know, this issue will be one for the courts to decide. The federal court system can be very discriminating about what cases they use to decide important issues—so even if panelists agree that Google is a monopoly, they have to find that its predatory practices harmed SourceTool for the case to be successful.
But waiting is boring—so what’s your verdict (on this particular case, please, not just on Google as a monopoly in general!)?