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Google 'Ransoming' Customers Searching For Trademarked Brands, Lawsuit Claims

A packaging company claims that until May 2008, Google actively hid the extent to which its AdWords program monetized low-quality pages, parked domains, and error pages.

For the third time, Google has been sued for fraud and unfair business practices for selling ads on low-quality Web pages.

On Monday, JIT Packaging, filed a lawsuit against Google in Illinois claiming, "Google includes millions of low-quality parked/undeveloped Web sites generated specifically for the purpose of showing ads ('sham sites') in the Google Search and Content Networks, despite the fact that said sites do not contain any content nor are the ads displayed because of a search query originating from a Google search box."

JIT's allegations echo those made by attorney Hal K. Levitte and by RK West in separate lawsuits last month.

JIT claims that until May 2008, Google actively hid the extent to which its AdWords program monetized low-quality pages, parked domains, and error pages. Google, the complaint says, "intentionally concealed and omitted Google's practice of placing ads on low-quality parked AdSense for Domains sites or on AdSense for Errors sites, as well as on sites that it knows violates cybersquatting, trademark, copyright, and other intellectual property laws."

The complaint lists dozens of cybersquatted typo domains from which Google derives ad revenue. It characterizes the placement of ads belonging to legitimate trademark holders on infringing domains as a ransom arrangement.

"For example, a user intending to visit the retailer Target's legitimate Web site might mistype it as ','" the complaint states. "At the 'www' infringing site, the Internet user sees a list of ads provided by Google, including an ad for the legitimate Target site. If the user clicks the legitimate Target ad, the user is taken to the true Target Web site, but Target has to pay a 'ransom' in the form of a 'PPC' click fee in order to get their intended Internet traffic back from Google."

While Google in May updated its Site Inclusion tool for advertisers to provide the ability to prevent ads from appearing on parked domains or error pages, the complaint says the opt-out button is buried where advertisers won't easily find it. It also says that Google doesn't provide a way to opt out of placing ads on illegal sites, such as those that violate copyright law.

Judging whether sites violate copyright law isn't simple however. Technically, every blog that quotes a news article is infringing on the news publisher's copyright. It's just that most blog publishers could cite fair use as a defense, were the matter ever formally raised in court. What qualifies as fair use, however, is not clear, making it difficult for Google to guess how a court would rule on an infringement claim.

Nonetheless, it's clear from Google's change of policy in May that Google is aware of the problems arising from selling low-quality ads. However the three lawsuits get resolved, Google's advertisers are likely to benefit from greater choice and transparency going forward.

Google did not respond to a request for comment.

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