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Google unsuccessful in escaping monopoly lawsuit over stock photo search results

By Scott Holland | Jun 10, 2019

SAN JOSE, Calif. (Legal Newsline) – A federal judge has refused to let Google out of a lawsuit against it filed by a stock photography website.

Dreamstime.com filed a complaint in March 2018 alleging Google violated the Sherman Act and breached a contract by abusing “its monopoly power in the online search advertising market to exclude Dreamstime from the most-common online searches for stock photography,” the suit states.

In an opinion issued June 5, Judge William Alsup of the U.S. District Court for the Northern District of California granted only one part of Google’s motion for partial final judgment on the pleadings regarding the breach of contract and breach of implied covenant claims relating to a Google Play agreement. Alsup denied Google's motion arguing Dreamstime.com's complaint couldn’t include allegations about the content or arrangement of Google search results. 

“Even assuming the First Amendment generally protects search engines, Google’s argument fails,” Alsup wrote. “Just like a fast-talking con-artist cannot hide behind the First Amendment, neither can Google. … Victims can sue all day long.”

Alsup also noted Google itself conceded search results, that can support a lawsuit - such as if it failed to deliver on a contractual promise to rank Dreamstime in a certain way.

“The basis of the breach of contract claim remains that Google broke its contractual promise to Dreamstime,” Alsup wrote. “It makes no difference that Google did not make any specific promises related to search results. …”

“...An issue of material fact exists as to the reason Dreamstime had formerly been highly ranked on Google, remains highly ranked on other search engines, and has become practically non-existent on Google despite engaging in a mishmash of attempted fixes.

"Perhaps the reason is that Google torpedoed Dreamstime’s organic search ranking to boost advertising revenue. Perhaps it is not. Discovery will tease out what occurred here."

Discovery into Google’s search and advertising practices as related to Dreamstime is underway, with trial set for May 25, 2020.

Looking at the contract claims, Alsup said Dreamstime alleged Google breached an AdWords agreement by failing to deliver on expectations, and one for Google Play because it removed the Dreamstime app from the store. Alsup said it’s too early to determine if the AdWords dispute limits the damages Dreamstime seeks. However, he said the limitation of liability clause in the Google Play deal is “a showstopper” that “forecloses all damages.”

Alsup said Dreamstime has the burden of proof to show its Google Play contract is “unconscionable,” and didn't argue that standard for the contested provision, but rather “attempts to shoehorn allegations of fraud into this breach of contract claim.”

Dreamstime CEO Serban Enache issued a statement on the ruling.

“For years, Dreamstime has sought answers and remedies for Google’s dramatic demotion of Dreamstime’s search ranking for the most-common searches for stock photos, which was occasioned by Google’s promotion of its competing Google Images service and its strategic partnerships with Dreamstime’s two largest competitors, both actions leading to Google’s world dominance for image distribution,” Enache said.

“We are pleased that the court has allowed Dreamstime to discover the necessary facts and evidence to support its allegations that Google’s online search practices were unfair, unlawful and/or fraudulent as applied to Dreamstime and most other stock photo agencies. The court’s ruling, and the recent reporting suggesting that the Department of Justice is in the process of opening an antitrust investigation into Google’s practices, are critical steps in Dreamstime’s quest for an even playing field in online search and search advertising.”

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Google, Inc. U.S. District Court for the Northern District of California

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