Google AdWords Contract Upheld–Person v. Google

By Eric Goldman

Person v. Google Inc., 2006 WL 2884444 (S.D.N.Y. Oct. 11, 2006)

Carl Person is a candidate for New York’s Attorney General and an AdWords advertiser. He complains about a variety of Google’s AdWords’ policies, including its minimum pricing, its restrictions on buying certain keywords, the quality score component of its sorting algorithm, the allegedly misleading nature of calling the process an “auction” when Google exercises subjective judgments, and other practices. Thus, he sued Google for antitrust and other violations in the federal courts in New York City.

To become an AdWords advertiser, Person entered into an online clickthrough Google’s AdWords agreement that contains a forum selection clause for Santa Clara County, CA. The court notes that forum selection clauses are presumptively valid, and after a fairly brief analysis, the court concludes that there’s no reason to overturn this presumption. Thus, the court transfers the case to the federal court in San Jose, CA.

As far as I can remember, this is the first case upholding Google’s AdWords contract. However, this isn’t the first time that a Google online clickthrough agreement was validated; in 2004, a New York court upheld its contract for Google Groups. Novak v. Overture Servs., 309 F. Supp. 2d. 446 (E.D.N.Y. Mar. 25, 2004).

I wonder if NY voters will count this decisive loss (in a lawsuit of his own choosing) against Person when deciding if he’s worthy of the role of Attorney General?