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Tiny search engine alleges Google abuses its power

February 18, 2009

SAN FRANCISCO (AP) – A would-be challenger to Google Inc. said Tuesday it is suing the Internet search leader for alleged abuses that include illegally rigging its prices to thwart potential competitive threats.

In a 38-page page complaint, TradeComet.com LLC accused Google of manipulating its system for setting ad rates to make it too expensive for a specialty search engine called SourceTool to promote itself within Google’s vast online marketing network.

In a press release, TradeComet said it filed its antitrust lawsuit in a New York federal court.

Google said it hadn’t reviewed the allegations as of late Tuesday, but the Mountain View-based company reiterated its belief that there are plenty of other online advertising options, including networks run by rivals Yahoo Inc. and Microsoft Corp.

“As we have consistently made clear, the advertising market in which Google operates is highly competitive, and advertisers have a huge range of choices,” Google said in a statement.

TradeComet’s lawsuit is the latest legal action to allege Google has used its widening market power to create a monopoly that enables it to bully rivals or squeeze out Web sites that it doesn’t like.

Google processes nearly two-thirds of the Internet search requests in the United States and sells an even larger chunk of the text-based ad links that appear alongside search results and other content on millions of Web pages served up each day.

That clout spurred a government investigation that would have culminated in an antitrust lawsuit late last year had Google not withdrawn from a planned advertising partnership with Yahoo, which runs the Internet’s second biggest search engine.

New York-based TradeComet alleges Google stymied the growth of SourceTool in May 2006 when it raised the minimum bids on SourceTool ads that were triggered by specific search requests. Words that resulted in advertising costs of 5 cents and 10 cents per click soared to $5 and $10 per click, according to the suit.

The suit alleges the higher rates prevented SourceTool from promoting its search engine, which helps connect businesses looking to buy and sell products and services among themselves. TradeComet said its traffic plunged by 90 percent after Google imposed its new pricing terms.

Copyright 2009 The Associated Press.

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