Google Sued Over Rankings–KinderStart.com v. Google

By Eric Goldman

KinderStart.com LLC v. Google, Inc., No. C 06-2057 RS (N.D. Cal. complaint filed March 17, 2006)

Google has been sued for downgrading the PageRank of websites in contravention of its stated “objective” policies. In KinderStart’s case, they got kicked out of Google in March 2005 and immediately lost 70% of their traffic. Google is now 0.01% of KinderStart’s referral traffic.

As a result, KinderStart, and similarly situated plaintiffs, are trying to form a class action lawsuit to get money from Google for the PageRank downgrades. The complaint alleges seven causes of action:

Free speech violations under the US and California Constitutions.

This claim is a loser on its face because Google is not a state actor. See the cites in my previous post about why ICANN isn’t a state actor. The complaint doesn’t even try to allege specifically that Google is a state actor. It does claim that Google is an “essential facility,” but this argument has no hope. It has been soundly rejected in the context of domain names and email, and search results are no more essential than those.

While California’s free speech protections are broader than the US Constitution’s, I don’t think California’s protections extend anywhere close enough to cover Google’s actions.

Sherman Act Section 2 (antitrust/monopolization).

This is also a loser claim. I don’t see how the plaintiffs can establish that Google has a monopoly position. If anything, the search engine market remains dynamic and competitive with several large players, as the statistics clearly illustrate.

California Business and Professions Code Sec. 17200

I’m not an expert in this law, but this claim looks less frivolous than the previous two claims. In particular, the complaint marshals some non-trivial evidence that Google has falsely described its ranking algorithm operations. For example, the complaint (particularly paragraphs 37-38) describes some disclosures in Google’s FAQs that say Google doesn’t censor or manipulate search results, but the facts suggest that Google in fact does so. (For example, Google just recently had to change its censorship FAQ after launching its China service).

(To be clear, Google is hardly alone. Indeed, just yesterday it was reported that Amazon manually hacks the search results for “abortion.” Algorithmically, this search produces a prompt “did you mean adoption?,” and Amazon manually deleted that prompt).

In this respect, Google has a duality: Many people at Google still think that search engine operations are as automated and pure as they were in 1999. However, in the intervening 7 years, Google has made lots of manual changes and hacks that run contrary to its claim of automation and objectivity. I document some of these in my Deregulating Relevancy article, and I will make a more organized presentation of this claim in my imminently forthcoming article on search engine bias. Google may ultimately pay for its delay in realizing that it is a media company and makes editorial choices just like any other media company.

To the extent the 17200 claim is based on false advertising, Google also won’t be able to claim a first amendment defense like it did in the Search King case. In that case, Google claimed that its PageRank decisions were constitutionally protected opinions. If the 17200 claim is based on Google’s false descriptions of its ranking algorithms, then the claim may be beyond constitutional insulation.

Other Causes of Action

* Unfair Practices under Cal. B&P 17040. This is an anti-price discrimination statute, although it’s written more broadly to cover other types of commercial discriminations. This is an interesting claim and I don’t know this statute well. I suspect that courts will be very reluctant to apply this statute to media companies’ publication decisions; there may even be constitutional limits on doing so.

* Breach of Implied Covenant of Good Faith/Fair Dealing. This is a bizarre claim. It claims that AdSense participants allocate scarce web page space to AdSense ads, and Google breaches its obligations by reducing traffic that might see these ads. But think about this–the claim is that Google breaches a duty to web publishers by refusing to pay the publishers for traffic that Google itself sourced for the publishers! I will be very surprised if a court believes that Google refusing to pay for its own traffic is “bad faith.” I also think that Google’s express contract terms may trump any applicable implied covenant.

* Defamation. The complaint claims that Google defames a website by giving it a zero PageRank when the mathematical algorithms should have given it a higher number. This claim is also a loser for several reasons. First, as the Search King case found, PageRank should be a protected opinion. Second, there’s no actual defamation because no one knows exactly how PageRank is computed, so there’s no way for a third party to draw any inferences about what a zero PageRank means. (However, Google makes its life more difficult by claiming in the toolbar that PageRank is a characterization of the website’s “importance;” Google should tone down this description of what PageRank means). Third, because Google can change its ranking algorithm at any time, there’s nothing to prevent Google from assigning a zero PageRank on any basis it chooses.

* Negligent Interference with Prospective Economic Advantage. This is also based on a claim that Google owes traffic to AdSense participants. Among other reasons why this claim will fail, I think Google’s express contract terms should negate any such expectations.

Conclusion

As you can see, I think this lawsuit has low merit; most of its claims will be knocked out on a motion to dismiss. However, the 17200 claim could survive because of Google’s sloppiness in its marketing disclosures, but I’m still not convinced that the 17200 claim is meritorious.

Personally, I find this lawsuit fascinating from a theoretical perspective. At its core, the lawsuit presumes that there is a single way Google should run its ranking algorithm, and Google should suffer penalties for any deviations. Intrinsically, this lawsuit is about diminishing Google’s ability to run its algorithm as it sees fit (including mismanaging the algorithm).

This pro-regulatory argument is more common than we might think. Rep. Smith has effectively advanced such an argument in proposing the Global Online Freedom Act to regulate ranking algorithms. And plenty of academics have jumped on the pro-regulatory bandwagon. The seminal pro-regulation article is by Introna and Nissenbaum, but they are hardly alone. Just recently, Frank Pasquale has posted a work-in-progress, “Rankings, Reductionism, and Responsibility,” arguing for various controls over ranking algorithm decisions.

The arguments in favor of regulating search engine ranking algorithms are wrong, wrong, WRONG. I’ll make a more complete case in my search engine bias article, but for now, consider the argument as applied in the non-Internet context of newspapers. Newspapers have absolute freedom to select which articles to publish and what order to present them in. Not only is this the basic value proposition of newspapers (i.e., why we buy/read newspapers), but newspaper editorial decisions are constitutionally protected (see Miami Herald v. Tornillo) and cannot be overridden.

So why should search engines be treated differently? Search engines have to tell the truth (i.e., if they claim not to manually hack search results, they can’t do a manual hack), but in all other respects, they should have the same freedoms as other publishers. If you can’t imagine legally requiring newspapers to reorder their articles, then it should strike you as equally bizarre that some argue that search engines should reorder results or be liable for their ordering choices.

As for KinderStart, there is a lesson to learn: it’s precarious to build a business on free search engine traffic. My advice is to enjoy the ride so long as it lasts, but don’t plan on the good times lasting forever, and definitely don’t expect a ton of sympathy when the gravy train ends.

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