Knowing Certain Trademark Ads Were Confusing, Google Sold Them Anyway -- for $100+ Million
November 30, 2010
Disclosure: I serve as a consultant to various companies that compete with Google. But I write on my own -- not at the suggestion or request of any client, without approval or payment from any client.
When a user enters a search term that matches a company's trademark, Google often shows results for the company's competitors. To take a specific example: Searches for language software seller "Rosetta Stone" often yield links to competing sites -- sometimes, sites that sell counterfeit software. Rosetta Stone think that's rotten, and, as I've previously written, I agree: It's a pure power-play, effectively compelling advertisers to pay Google if they want to reach users already trying to reach their sites; otherwise, Google will link to competitors instead. Furthermore, Google is reaping where others have sown: After an advertiser builds a brand (often by advertising in other media), Google lets competitors skim off that traffic -- reducing the advertiser's incentive to invest in the first place. So Google's approach to trademarks definitely harms advertisers and trademark-holders. But it's also confusing to consumers. How do we know? Because Google's own documents admit as much.
Today Public Citizen posted an unredacted version of Rosetta Stone's appellate brief in its ongoing litigation with Google. Google had sought to keep confidential the documents that ground district court and appellate adjudication of the dispute, but now some of the documents are available -- giving an inside look at Google's policies and objectives for trademark-triggered ads. Some highlights:
Kudos to Public Citizen for obtaining these documents. That said, I believe Google should never have sought to limit distribution of these documents in the first place. In other litigation, I've found that Google's standard practice is to attempt to seal all documents, even where applicable court rules require that documents be provided to the general public. That's troubling, and that needs to change.