Out of the frying pan and into the fire: Google barely had time to celebrate the fact that it handily won its StreetView privacy lawsuit, when it found itself mired once again in legal challenges that may prove to be far more damaging in the long run.
While most agree that the Boring v. Google case was frivolous at best, Google’s now facing a new suit alleging that it engaged in monopolistic, anti-competitive behavior–just in time for the appointment of new antitrust official who says she believes Google is indeed a monopoly.
The new case, launched by TradeComet on behalf of its SourceTool.com subsidiary, alleges that Google used unfair trade practices to squelch SourceTool.com once the site became a strong Google competitor. SourceTool.com is a middleman-type site that aims to connect searchers with the businesses they are looking for by showing them search ads and directory listings. The suit alleges that Google blocked search traffic by imposing “massive, unjustified price increases” in an effort to eliminate TradeComet as a competitor.
According to the Washington Post, the suit has little merit, especially since TradeComet plows 80% of its profits back into Google ads. First, it’s hard to imagine Google considering a site like SourceTool.com as a legitimate threat when Google doesn’t even take search competition from the likes of Microsoft and Yahoo seriously. Second, Google aims to help searchers find what they need in one-click, without having to go through a middleman site like SourceTool.com; and third, SourceTool shouldn’t be so reliant on Google for business, especially if it’s looking to be a viable competitor. As it says:
News flash to TradeComet: You can’t sue your way to a good product or a thriving business. Just ask SCO, that Salt Lake City company that claimed to own Linux and was last heard from filing Chapter 11.
The only reason the suit seems dangerous is the fact that President Obama just nominated Christine Varney as his choice to head the Justice Department’s antitrust division. According to Bloomberg, Varney turned heads at a June 19 panel discussion sponsored by the American Antitrust Institute by saying:
“For me, Microsoft is so last century. They are not the problem,” she said. The U.S. economy will “continually see a problem — potentially with Google” because it already “has acquired a monopoly in Internet online advertising.”
So while Google narrowly avoided being labeled a monopoly–and fighting a long court battle over it–when it decided to drop its ad-sharing deal with Yahoo, it looks like it didn’t quite escape unscathed. In fact, it has succeeded Microsoft as the technology monopolist du jour, at least in the eyes of the Justice Department.
And what’s “last century” monopolist Microsoft’s role in all this? Well, Mashget reports that the lead counsel for TradeComet just happens to be Rick Rule of Cadwalader, Wickersham & Taft–the same Rick Rule who helped represent Microsoft during its antitrust battle with the U.S. DOJ. Interesting.
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