Court allows stock photo company's breach of contract suit against Google to proceed but dismisses antitrust claim

By Gabriel Neves | Feb 7, 2019

SAN FRANCISCO – The U.S. District Court for the Northern District of California recently granted Google's motion to dismiss an antitrust claim against the tech giant in a lawsuit filed by a stock photography company.

In a Jan 28 filing regarding a lawsuit filed by Dreamstime.com LLC against Google, U.S. District Judge William Alsup granted Google's motion to dismiss the antitrust claim but allowed claims of breach of contract and breach of covenant of good faith and fair dealing to move forward.

Dreamstime sued Google alleging the company used its monopoly power to discriminate against the plaintiff in terms of visibility in search results through its AdWords program.

"In 2004, Dreamstime entered into the AdWords agreement with Google, paying Google to display its advertisements on Google and engaging in several different marketing campaigns to promote its advertisements with the best combination of quality score, bid amount and resulting customer acquisitions," court filings said.

Eleven years after signing the agreement, "Dreamstime’s search ranking on Google plummeted," and the plaintiff's "rank on Google for the generic search term 'stock photos' in June 2017 sank from what had been either the second or third overall result down to the fourth page," the filing said. The plaintiff claimed that an agreement signed between Google and Shutterstock in 2016 could have affected the rankings.

In an effort to increase the index, Dreamstime attempted several different strategies.

"Dreamstime switched to https and http2, disavowed links, improved website quality, diversity, and quantity of content, invested in dedicated hardware for a caching system, and dramatically increased the crawl rate and number of pages on the site. When those efforts did not restore Dreamstime’s ranking, Dreamstime also invested numerous development hours to rebuild its entire site to be mobile-friendly, diverted resources from other projects in its business plan and doubled its hosting costs, engaged with and followed the advice of external agencies, hired its own in-house search engine optimization expert, spent millions of dollars on website hosting to increase the content on its website by adding more images, and launched a second website – Megapixl.com – to get more exposure," court filings said. "Dreamstime also spent millions of dollars on new Google AdWords campaigns (increasing its budget by 50 percent) both for itself and for Megapixl.com. Still, Dreamstime’s Google rank continued to decline through the end of 2017 and Megapixl.com did not gain traction."

Dreamstime continued to claim that Google "selectively applied its policies to Dreamstime’s detriment," court filings said..

 Alsup granted the motion to dismiss the antitrust claim, stating that "Dreamstime’s amended complaint misses a critical element in failing to allege a plausible monopoly maintenance claim – namely injury to competition in the online search advertising market."

Alsup added,  "Dreamstime’s cause of action of the breach of implied good faith and fair dealing therefore may move forward."

Want to get notified whenever we write about U.S. District Court for the Northern District of California ?

Sign-up Next time we write about U.S. District Court for the Northern District of California, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. District Court for the Northern District of California

More News

The Record Network