By Eric Auchard
A federal court judge on Thursday dismissed a lawsuit against Google
Inc. by disgruntled advertising customer Kinderstart that had accused
the Web search leader of monopolistic business practices.
Judge Jeremy Fogel of the U.S. District Court for the Northern
District of California in San Jose said in a ruling he would grant
Google's motion to dismiss Kinderstart's complaint, but gave
Kinderstart leave to amend and resubmit its case.
"The court concludes that Kinderstart has failed to allege any conduct
on the part of Google that significantly threatens or harms
competition," Fogel wrote in a 23-page decision.
Kinderstart filed suit in March after Google altered the way it ranked
sites in its Web search and advertising system. The change allegedly
relegated the parental information site to a "zero" ranking in Google
searches, leading to a 70 percent plunge in traffic to the site in
2005, according to court papers.
Google considers how it calculates the relevance of Web sites to
specific consumer searches to be a closely guarded secret critical to
its ability to ward off manipulation of search results by advertisers
it deems abusers of its system.
A 2003 ruling in a case filed by Oklahoma City-based Search King
Inc. had sided with Google's assertion that the ability to tweak its
search results system was a form of opinion protected by free-speech
rights.
A Google spokesman was not immediately available to comment on Judge
Foley's ruling.
In a lawsuit filed in March, Kinderstart, a Norwalk, California-based
company accused Google of "pervasive monopolistic practices" that
denied it its free-speech rights, destroyed competition and led to
predatory pricing conditions.
Kinderstart had sought class-action status for its suit on behalf of
other Web sites that the company alleged had been also effectively
been banished from Google's search system.
The complaint argued Google's growing dominance of Web search
advertising makes it vital for businesses to rank high in Google
search results. As such, Google has become an essential public
facility for being discovered on the Web.
The court found all nine counts in Kinderstart's complaint
insufficient to refer the case to trial.
Attorneys for Kinderstart said they would promptly file a second,
amended complaint to address the judge's concerns prior to the next
court date scheduled for September 29.
"Not a single count was dismissed with prejudice by the judge,"
Kinderstart's legal team said in a statement following the
ruling. "Now, plaintiffs have the full opportunity to amend all nine
counts in the class action complaint."
Copyright 2006 Reuters Limited.
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Eric Auchard (reuters@telecom-digest.org)