SAN FRANCISCO – A federal court judge on Thursday dismissed a lawsuit against Google Inc. (GOOG) by disgruntled advertising customer Kinderstart that had accused the Web search leader of monopolistic business practices.
Judge Jeremy Fogel of the U.S. District Court for the Northern District of California in San Jose said in a ruling he would grant Google's motion to dismiss Kinderstart's complaint, but gave Kinderstart leave to amend and resubmit its case.
"The court concludes that Kinderstart has failed to allege any conduct on the part of Google that significantly threatens or harms competition," Fogel wrote in a 23-page decision.
Kinderstart filed suit in March after Google altered the way it ranked sites in its Web search and advertising system.
The change allegedly relegated the parental information site to a "zero" ranking in Google searches, leading to a 70 percent plunge in traffic to the site in 2005, according to court papers.
Google considers how it calculates the relevance of Web sites to specific consumer searches to be a closely guarded secret critical to its ability to ward off manipulation of search results by advertisers it deems abusers of its system.
A 2003 ruling in a case filed by Oklahoma City-based Search King Inc. had sided with Google's assertion that the ability to tweak its search results system was a form of opinion protected by free-speech rights.
A Google spokesman was not immediately available to comment on Judge Foley's ruling.
In a lawsuit filed in March, Kinderstart, a Norwalk, California-based company accused Google of "pervasive monopolistic practices" that denied it its free-speech rights, destroyed competition and led to predatory pricing conditions.
Kinderstart had sought class-action status for its suit on behalf of other Web sites that the company alleged had been also effectively been banished from Google's search system.
The complaint argued Google's growing dominance of Web search advertising makes it vital for businesses to rank high in Google search results. As such, Google has become an essential public facility for being discovered on the Web.
The court found all nine counts in Kinderstart's complaint insufficient to refer the case to trial.
Attorneys for Kinderstart said they would promptly file a second, amended complaint to address the judge's concerns prior to the next court date scheduled for September 29.
"Not a single count was dismissed with prejudice by the judge," Kinderstart's legal team said in a statement following the ruling. "Now, plaintiffs have the full opportunity to amend all nine counts in the class action complaint."