A New York federal judge dismissed the first of two antitrust lawsuits against Google filed by smaller Internet search engines that accuse the search giant of manipulating its rankings in order to punish rivals.
In a ruling on Friday, Judge Sidney Stein dismissed the complaint brought by TradeComet.com and said that the company should bring its claims in California, not in New York.
“We’re pleased that the court agreed that the Tradecomet case was filed in an improper venue,” said Google spokesman Andrew Pederson.
Tradecomet’s attorneys said the dismissal was only a minor setback.
“It’s a purely procedural ruling, and doesn’t affect the underlying claims in TradeComet’s case,” said the company’s lawyer, Jonathan Kanter, a partner at Cadwalader, Wickersham & Taft, which also represents Microsoft Corp. “We are considering all options at this point, but we intend to press forward.”
The TradeComet lawsuit, filed a year ago, was one of the first attempts by rivals to go after Google on antitrust grounds. Since the TradeComet suit, Microsoft’s lawyers at Cadwalader filed a similar case on behalf of myTriggers.com, a comparison shopping Web site, in Ohio state court. The European Commission also is looking at similar complaints filed by smaller search Web sites ejustice.fr, Foundem, and Microsoft’s Ciao!
TradeComet, which operates a business-to-business search Web site called SourceTool.com, accused Google of making the Web site’s ad rates prohibitively expensive in an effort to shut a potential competitor out of the market. The company also claimed that Google cut deals with various Web sites in order to exclude SourceTool and other potential rivals.
Google urged the judge to dismiss the complaint because TradeComet’s contract with Google required advertisers to bring any claims in a California court near Google’s headquarters.
TradeComet argued that a previous contract applied, but the judge disagreed. The company can either appeal the ruling to the 2nd Circuit Court of Appeals or file the case in California.
The Ohio suit against Google was filed last month in response to an attempt by Google to collect on $335,000 of unpaid bills. MyTriggers accused Google of changing the company’s Web site ratings, known as quality scores, in order to raise the price of its ads. Google has not yet responded to the claims.
In a recent SEC filing, Google said it competed not only with traditional search engines run by Yahoo! Inc. and Microsoft, but also with specialized search Web sites like WedMD, Kayak, Monster.com, Amazon.com, and eBay, social networks like Facebook and Twitter, and mobile applications that let users bypass search engines and access Web sites directly.
Separately, the Federal Trade Commission is examining Google’s purchase of mobile advertising platform AdMob to determine whether it violates antitrust laws. According to a person familiar with the review, Google has turned over the bulk of the documents needed for the review; in industry parlance, Google has certified that is has “substantially complied” with the FTC’s request for documents. A decision is expected in the next month.