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Antitrust Suit Filed Against Google


gavelWe’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!)?

  • http://www.katemorris.com Kate Morris

    I would have to see their paid search account. I have heard talk of things like this a lot for the past few months. But I refuse to bring personal judgement unless I know all the facts. I am curious to see how this plays out in court. If they were B-to-B, why not focus on Business.com ads? (chuckle) I know the answer to that, just had to say it.

  • http://www.quityourdayjob.com Jeremy Palmer

    If they hate Google so much why are they still running AdSense on their site? http://www.sourcetool.com/results_solr.php?&mt=Cultured%20Pearls

    I can see Google’s point of view – where’s the value added content?

  • http://www.andrianmarketing.com Andrew Brinkworth

    As one of many who was pretty much put out of business by the quality score system put in place by Google several months ago, I had a feeling that it was going to affect someone more heavily vested than myself.

    One can argue that Google as a company has a right to set their prices as they see fit. But in many cases it seems extremely arbitrary.

    At what point does a system become a part of the economy and have so many people relying upon it for their livelyhood that a small change in how it works can devastate thousands.

    I know that when a product becomes a staple in a society it becomes a commodity and therefore not subject to owner pricing but subject to the market, but does this apply to a system created and set up by a company.

    It could also be argued that just like you don’t see ESPN ads on FOX Sports, it was silly for this company to think that they would be able to sell a search engine using Google Search for very long before Google decided to stop it.

    That’s just my opinion I could be wrong.
    Miss you Dennis!

  • Jordan McCollum

    (Who’s Dennis?)

  • Peter Ferrari

    Nothing would surprise me in regards to Google..recent adwords tests on two identical themed sites, same age/amount of content and link love, revealed and instant drop in the organic rankings of both sites. We switched the campaign across to the identical themed site and the organic rankings on the first site sprang back to its #2 spot within hours. Do we want to sue..no thanks…but we’re getting more Google-wise by the minute

  • http://www.andrianmarketing.ocm Andrew Brinkworth

    Dennis Miller,
    Once an incredibly smart funny libertarian comedian, now a sad puppet for the neocons!

  • Jordan McCollum

    Oh, HIM. Yeah, I’m always confused to see him as a talking head—I end up wondering whether he’s serious or making one big elaborate joke.

  • Morely Dotes

    Frankly, the SourceTool.com site, and tehir parent company’s site, look dodgy to me. Aggregating Google’s results hardly seems like a viable business model, and people who can’t even get a link to their own parent company’s Web site right surely have no business in business, so to speak.

  • http://www.kankuratan.com/medical-bill-consolidation.shtml Medical Bills Debt Consolidators

    Monopoly is always lead to death for healthy competition & hence in end consumer is victim & here if rumors is true than when no other Search Engine left for competition the ONE will provide result which is highly remuneration generating for HIM & not one which is really has useful things.

    Need to watch on progress if SOMEONE heading towards MONOPLY…. BIG NO TO IT… Hope IT will work to come out from such practice if doing so…