Update: Dreamstime V. Google Lawsuit

On June 5, 2019, federal judge William Alsup of the Northern District of California ruled upon Google’s motion for partial judgment on the pleadings in the case of Dreamstime.com, LLC v. Google, LLC, denying in part and granting in part the motion.  A copy of the Court’s order is attached.  Significantly, the Court found that Google’s First Amendment defense did not bar Dreamstime’s claim that Google manipulated Dreamstime’s organic search ranking unfairly and illegally to force Dreamstime to spend an unreasonable amount of money on additional AdWords campaigns that would not otherwise have been necessary.

In its motion, Google argued, among other things, that the First Amendment barred any claims for liability against Google related to its ordering of Dreamstime’s search rankings because search rankings were editorial judgments immune from liability under the First Amendment.  Google relied upon a number of cases outside of the Northern District of California finding that various First Amendment protections applied to search engines under certain circumstances.  While noting the existence of these cases, the Court denied Google’s motion and ordered discovery into the reasons behind Dreamstime’s dramatic drop in Google’s search rankings.  On the First Amendment issue, the Court said:

Even assuming the First Amendment generally protects search engines, Google’s argument fails. The amended complaint alleged that Google “manipulated Dreamstime’s organic search ranking unfairly and illegally to force Dreamstime to spend an unreasonable amount of money on additional AdWords campaigns that would not otherwise have been necessary” (Dkt. No. 50 ¶ 169). Just like a fast-talking con-artist cannot hide behind the First Amendment, neither can Google. “It is . . . beyond dispute that the publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others.” Cohen v. Cowles Media Co., 501 U.S. 663, 670 (1991) (quotations omitted). Victims can sue all day long.

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Google argues that Dreamstime must aver more than a mere subjective belief that it should rank higher. Yet, 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. As to this issue, Google’s motion is DENIED.

Google’s most recent motion was the third motion brought under Rule 12 of the Federal Rules of Civil Procedure to attempt to dismiss or obtain partial judgment of claims in Dreamstime’s pleadings.  The Court concluded its Order by stating, “There shall be no more Rule 12 practice in this case. All summary judgment motions must await the completion of discovery.”

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

Serban Enache, CEO of Dreamstime, stated: “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.   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.”

The Court ruling is available in the Login Area of the CEPIC website.