Antitrust Law Daily Wrap Up, ADVERTISING—M.D. Fla.: Google may be liable for misrepresenting reasons for removing websites from search results, (May 16, 2016)

By Jody Coultas J.D.

E-ventures Worldwide, LLC stated Lanham Act and Florida state law claims for unfair competition against Google, Inc., according to the federal district court in Fort Myers, Florida (e-ventures Worldwide, LLC v. Google, Inc., May 12, 2016, Steele, J.). Google’s First Amendment and Communications Decency Act defenses were insufficient to dismiss the claims.

E-ventures is in the “search engine optimization” or “SEO” industry. Search engine optimization is the process of causing websites to be ranked and displayed more prominently in search results, without payment being made to the search engine. Google’s revenues are derived from its “AdWords” advertising program, through which consumers pay to have their websites ranked and prominently displayed in Google’s search results. E-ventures alleged that its services reduce Google’s revenues because if companies are successful in achieving website prominence on Google’s unpaid search listing, then there is less of a desire to purchase Google’s AdWords advertising services.

Google removed 365 websites owned by e-ventures from all of its search results because they had been identified as “pure spam.” “Pure Spam” is defined by Google as indicating that “Google has detected that some of your pages may be using techniques such as automatically generated gibberish, cloaking, scraping content from other websites, and/or other repeated or egregious violations of Google’s guidelines.” As a result, Google users were prevented from locating e-ventures’ websites through Google. E-ventures’ attempts to list new websites in Google’s search results were rejected by Google because of their affiliation with e-ventures.

E-ventures filed suit for unfair competition under the Lanham Act and Florida Deceptive and Unfair Trade Practices Act (FDUTPA) violations, alleging that the removal of its websites was inconsistent with statements published by Google in its “Removal Policies.” E-ventures also alleged that Google’s public statements about its removal policy were false, deceptive, and misleading.

CDA defense. The court denied Google’s motion to dismiss on the basis that e-venture’s claims were barred by the Communications Decency Act (CDA). The CDA provides immunity for “any action[s] voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.” The CDA defense may be considered if it is apparent from the face of the complaint, but that was not the situation in this case, the court noted. Here, e-ventures included allegations that Google failed to act in good faith when removing its websites from Google’s search results and courts generally decline to grant dismissal due to an allegation of lack of good faith in a complaint.

First Amendment defense. Google argued that the claims were barred by the First Amendment because Google’s search results were constitutionally protected opinions. The court agreed that search engine output results are protected by the First Amendment, and that Google’s PageRanks are pure opinions of the website’s relevancy to a user’s search query. However, the claims were not based on the PageRanks or order assigned to its websites. The claims were based on Google allegedly falsely stating that e-ventures’ websites failed to comply with Google’s policies. It was possible to determine whether e-ventures did in fact violate Google’s policies and whether Google removed the websites due to actual violations. Therefore, the First Amendment did not preclude e-ventures’ claims, according to the court.

Lanham Act. The court also found that e-ventures stated unfair competition Lanham Act claims against Google. E-ventures alleged that Google’s description of its search engine services in the Removal Policies were false or misleading, and likely to deceive consumers into believing that because e-ventures violated Google’s Removal Policies, the websites were banned from Google’s search results. Google was correct that e-ventures failed to identify any statement made “in commercial advertisement or production” and failed to allege an injury caused by the advertising. However, such deficiencies were not relevant to the claim asserted. E-ventures did not allege a cause of action for false advertising, but rather a cause of action for unfair competition based on allegedly false representations.

FDUTPA. Google was unable to show that e-ventures lacked standing and/or failed to state a FDUTPA claim, according to the court. Any person or entity that has suffered a loss as a result of unfair or deceptive acts or practices may sue for damages under the FDUPTA. Regardless of whether an individual non-consumer has standing under FDUPTA, a legitimate business enterprise non-consumer does. Allegations that Google removed e-ventures’ websites from its search results for anticompetitive and punitive reasons, and allegations of causation, were sufficient.

Tortious interference with business relationships. Finally, the court denied Google’s motion to dismiss e-ventures’ tortious interference with business relationships claim. Google argued that the claim was prohibited by the “single publication/single action rule,” and that Google’s search results were constitutionally protected opinions that cannot form the basis of a claim of tortious interference with business relationships. While a plaintiff may not maintain multiple causes of action premised upon a single publication, it was premature to dismiss the claim based on Florida’s single publication/single action rule. Because the claim was based upon Google’s action of banning e-ventures’ websites, and not on what was communicated by the ban, the claim did not fail on the basis that it was based upon protected pure opinions.

The case is No: 2:14-cv-646-FtM-29CM.

Attorneys: Alexis K. Arena (Flaster Greenberg PC) and David Solomon Schnitzer (Zung Clough, PLLC) for e-ventures Worldwide, LLC. Nathan Michael Berman (Zuckerman Spaeder, LLP) for Google, Inc.

Companies: e-ventures Worldwide, LLC; Google, Inc.

Cases: Advertising StateUnfairTradePractices FloridaNews