Kinderstart.com has filed a suit against Google which includes an antitrust claim based on the theory that Google changed its ranking algorithm in a manner that caused Kinderstart’s ranking to drop and revenues to plunge. HT: Antitrust Review. Eric Goldman has got this covered, including links to the complaint, analysis, Google’s motion to dismiss and related briefs, and the oral argument transcripts. The briefs and transcripts (antitrust arguments by Jonathan Jacobson at Wilson Sonsini) are well worth reading on the antitrust points.
The crux of the antitrust defense is invoke Trinko for the propositions that the ranking algorithm is not exclusionary conduct under Section 2 of the Sherman Act and that Google has no duty to assist its rivals. This seems like a home run to me after reading the briefs and the complaint (but not the amended complaint). Labeling conduct “anticompetitive” or “exclusionary” is simply not enough under antitrust law to render that conduct actionable under Section 2. And it does not appear that the Kinderstart claim does much more than that. The conduct must be capable of harming competition. Kinderstart’s essential facilities argument is almost certain to fail at the summary judgment stage, if not earlier, given the state of search engine competition. I do not suspect that the attempted monopolization claim will survive much longer.
UPDATE: Rebecca Tushnet has some thoughts on the false advertising claims and Google’s anti-SLAPP motion.
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Thanks for the update! I’m no antitrust expert, but I do have a sense that there are some important fairness issues here; see, e.g., this pose from a few days ago:
http://www.nyu.edu/classes/siva/archives/003243.html#more
My very modest proposal for companies like Kinderstart comes at the end of this little piece:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=888327
If we are regulating credit bureaus, we should have some way of regulating comparably powerful data managers.
Thanks Keith. You are right that the other claims appear much more lively as a theoretical matter. As far as the antitrust claims go, and holding aside Google’s protected speech argument, I just don’t see how Kinderstart shows that the alleged ranking “devaluation” is actionable Section 2 conduct when the complaint itself suggests that Google does not have monopoly power and the algorithm plainly has competitive merit.
Very interesting Josh. I’m inclined to agree with you and Eric Goldman that the antitrust claim doesn’t have merit. More intriguing is the defamation claim. One could imagine a defamatory page ranking system in theory. But there’s no indication of any malice on Google’s part toward Kinderstart. Indeed, algorithmic ranking systems like Google’s ought to enjoy a safe harbor!