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TradeComet.com Files Federal Antitrust Lawsuit against Google

Otilia Otlacan | February 23, 2009

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Claim Details Google’s Abuse of Market Dominance to Squash Competition

NEW YORK – TradeComet.com LLC filed in the United States District Court for the Southern District of New York, a complaint asserting Google violates antitrust laws by eliminating competition and choice. TradeComet was forced to file the lawsuit when Google refused to stop engaging in predatory conduct to block search traffic by imposing massive, unjustified price increases. Google’s anticompetitive conduct eliminated TradeComet as a competitor. Cadwalader, Wickersham & Taft, LLP, one of the world’s leading international law firms, will represent TradeComet.com.

SourceTool.com, a subsidiary of TradeComet.com, operated a thriving global business-to-business (B2B) search engine enabling buyers of industrial products to easily connect with suppliers. SourceTool.com focused on a specialized type of industrial search, which it positioned as a competitor to Google’s general purpose search engine. Due to SourceTool’s utility for buyers, sellers and advertisers, the site took off—within months reaching 650,000 visits per day. SourceTool.com also was named a ‘2006 Rising Star of Specialized Search’ by InfoCommerce and the ‘Second Fastest Growing Internet Site in the World’ by Comscore.

Google initially embraced its relationship with SourceTool.com, naming them Google’s ‘Site of the Week’; SourceTool.com was reinvesting approximately 80 percent of its revenue by purchasing $500,000 per month or more in Google keywords.

In its complaint, TradeComet.com provides details of how Google subsequently identified SourceTool.com as a competitive threat and then engaged in illegal conduct to diminish and ultimately extinguish SourceTool.com’s platform.

“SourceTool.com offered a valuable service and TradeComet.com had a thriving business before Google decided to eliminate them as a competitor,” said Rick Rule, Chair of Antitrust for Cadwalader, Wickersham & Taft, LLP, and former head of the United States Justice Department Antitrust Division. “We believe this complaint has strong merit and represents a serious antitrust violation.”

“With no notice, Google changed from cheerleader to tyrant when it realized we were a competitive threat,” said Dan Savage, founder and CEO of SourceTool.com and TradeComet.com. “For example, Google raised my prices by 10,000 percent, which strangled our business, virtually overnight. Citing an ambiguous quality score determined by a secretive algorithm to justify the price increase, Google refused to consider reductions even after SourceTool.com invested the company’s savings to make the changes that Google said would rectify the supposed problems. As a result of Google flexing its monopolistic muscle, SourceTool.com currently averages about one percent of the traffic it previously had and is no longer a competitively viable business.”

TradeComet.com aims to recover damages caused when Google’s anticompetitive conduct eliminated SourceTool.com’s primary source of search traffic.

About TradeComet.com

TradeComet.com LLC is based in New York, NY and is the parent company of SourceTool.com, (www.SourceTool.com). Formed in September, 2005, TradeComet.com seeks to be the leader in the global sourcing marketplace employing Internet-based technologies to improve the efficiency and effectiveness of the supplier discover process.

About SourceTool.com

SourceTool (www.sourcetool.com) links professional buyers with qualified business suppliers around the world. Developed exclusively for the business-to-business market, SourceTool indexes and organizes nearly 500,000 business suppliers around the world according to UNSPSC®, a product classification system developed by the United Nations Development Program (UNDP) and managed by GS1 US. The UNSPSC® (United Nations Standard Products and Services Code) classification system uses a hierarchical structure that organizes commodity product types according to business segments, families, and classes.

Otilia is the founder and editor of AdOperationsOnline.com, launched in 2008. She currently provides online business consulting through her company, RightFit Media, and blogs about all things online at www.otiliaotlacan.com.