Update: A Google spokesperson gave us the following statement: “We believe this suit is without merit, and will defend vigorously against it.”
Google is being sued by a company called BuySafe, which basically claims Google is ripping off its business, hurting its ability to compete, violating its patent, and is giving special treatment to certain brands in search ranking.
In the complaint (via Robin Wauters), BuySafe claims to be the “first company to address the concerns of online shoppers by providing third-party certification and transactional guarantees for Internet retailers.”
“Because there is significant consumer demand for such certification and guarantees, numerous Internet retailers have purchased BuySafe’s services and offer BuySafe’s transactional guarantees without cost to the consumers who make purchases on their websites,” the complaint goes on to say. “It is well-known within the Internet retailer community that BuySafe’s transaction guarantee services are patented.”
In October, Google launched a pilot program for Google Trusted Stores, providing a similar service.
“The Google Trusted Store badge is awarded to e-commerce sites that demonstrate a track record of on-time shipping and excellent customer service,” said Tom Fallows, a Group Product Manager on Google’s Commerce team. “When visiting a qualifying store, shoppers can hover over the Google Trusted Store badge and see metrics on the store’s shipping and customer service performance.”
Fallows happens to be a former executive for a BuySafe customer, which BuySafe alleges had “extensive discussions” with a few of BuySafe’s execs and learned “a great deal” about BuySafe’s business. Not only did Google recruit Fallows in 2010, but according to the complaint, Google has sought a joint venture or partnership with BuySafe as far back as 2006. The complaint alleges that “google exploited those discussions to learn about BuySafe’s business.”
On top of all of that, the complaint says, Google had employees visit BuySafe.com on numerous occasions to investigate its business, methods and systems, claiming to have discovered a “tremdenous amount of visits to buysafe.com from Google IP addresses since at least 2009.
BuySafe says the launch of Google’s Trusted Stores has already “drastically” slowed its annual growth rate. It also says:
In or around October 2011, Google told at least two customers of BuySafe that participants in Google’s Trusted Stores program will have an advantage with respect to the order in which Google’s search results are displayed and promoted within Google search results. Indeed, that advantage is so significant that few, if any, online merchants will have any choice but to use Google’s Trusted Stores program. Upon information and belief, Google has made the same representations to other BuySafe customers and potential customers.
BuySafe also says Google timed the launch of the Trusted Stores Pilot to “impede BuySafe’s effort to raise additional capital,” which it needs to expand its business.
This, of course, comes at a time when Google is drawing the watchful government eye with regards to its competitive practices.
We’ve reached out to Google for comment, and will update accordingly.