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On February 20, 2010, the Common Pleas Court of Franklin County, Ohio in Columbus became the stage for the latest civil antitrust lawsuit against dominant Internet search engine Google. The company had initially filed suit against myTriggers.com, Inc. for failing to pay for advertising services provided by Google. myTriggers, the owner of several shopping web sites that allow users to compare different products based upon their attributes and prices, counterclaimed under Ohio’s Valentine Anti-Trust Act with a nuanced theory of how its failure in the search advertising market entitles it to treble damages from Google.
As a threshold matter, a basic understanding of the functioning of Google AdWords is required in order to understand myTriggers’s argument; a summary can be found here. The gist of the complaint is that myTriggers competed with Google AdWords to provide advertisers with a search advertising platform–hyperlinks displayed among the results of a search request on a search engine’s web site that the owner of the linked-to web site has paid the search engine to display–and was effectively frozen out of the market as a supplier of such advertising services by Google’s abuse of the Quality Score feature of AdWords. In order to gain a foothold as a profitable business, myTriggers needed Internet traffic, so it paid Google to list hyperlinks to its web site as “sponsored links” among Google users’ search results. For part of 2006 through the beginning of 2008, myTriggers was allegedly profitable. However, without warning, Google suddenly raised the minimum prices that myTriggers had to pay for Google to continue displaying hyperlinks to myTriggers’s web sites. When questioned by myTriggers, Google responded that the price increase was a result of Google giving myTriggers’s web sites low Quality Scores. myTriggers could not afford to continue advertising on Google, which, due to Google’s dominance as a search engine, prevented myTriggers from having access to a significant amount of Internet traffic.
myTriggers alleges that this incident is part of a concert of action by Google to foreclose the market for search advertising from “vertical search sites” like myTriggers’s web sites. However, there exists the sticky problem that Google actually does allow for hyperlinks to vertical search sites that “compete” with it in the same manner that myTriggers alleges it competed with Google. Based upon speculation, myTriggers seeks to distinguish itself from the other web sites that Google allows to use the AdWords service based upon myTriggers’s method of revenue generation. While both Google and myTriggers charge advertisers only when users of those web sites’ search services click a hyperlink to the advertiser’s web site (so-called “pay-per-click”), myTriggers also allows for a “pay-per-action” billing policy under which advertisers are charged only if a user of myTriggers’s search service is directed to the advertiser’s web site and makes a purchase from it.
Citing a 2006 New York Times article, myTriggers attempts to portray pay-per-action as a rival model of revenue generation that Google is trying to suppress by allowing vertical search sites to appear as sponsored links on Google only if those web sites agree to refrain from offering search advertising other than that from Google’s dominant AdWords advertising platform. This includes implementation of Google’s already-misused Quality Score feature which allows Google to freeze select rivals out of the market. Google and this secret gang of “search partners” also allegedly maintain a “whitelist”–another secret list of rivals that, for some reason, Google has decided to allow to survive. myTriggers alleges it was not included on the whitelist and thus Google and its search partners engaged in a campaign that prevented advertisements for myTriggers’s web sites from appearing on any of those web sites’ search advertising services.
For starters, the complaint’s theory of antitrust harm did not articulate whether myTriggers believes Google’s actions alone constitute an illegal exclusionary refusal to deal with a competitor, or whether its alleged tacit agreements with myTriggers’s competitors qualify as a conspiracy to restrain trade. What I was best able to synthesize is that myTriggers is arguing that Google made it unduly expensive for it to remain a customer of Google because Google also competes with myTriggers, and for that reason, myTriggers was cut off from consumers. While I am not a scholar of Ohio antitrust law, I think myTriggers’s fatal flaw is that it treats Google’s “exclusion” of it as a customer of Google just as if it were excluding it from providing advertising services. I am not familiar with any supported legal theory that imposes antitrust liability on a provider of advertisement that refuses to provide advertisements for a rival provider of advertisements.
As icing on the cake, there are rumblings that Microsoft had a secret hand in spurring myTriggers to file this counterclaim. Since Microsoft’s famed antitrust battle with federal regulators, the company has tattled on Google to the U.S. Department of Justice and the European Commission and also has admitted that other companies have sought consultation from it regarding potential antitrust challenges they might lodge against Google–but it has disavowed any involvement with the myTriggers case. However, as Google gains experience and familiarity with antitrust law, Microsoft can be sure to see whatever share of the market demand for antitrust law it currently enjoys migrate to Google just as it has for so many other services.
– Jason Albosta
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