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Antitrust - Internet Library of Law and Court Decisions - Updated May 8, 2008

Court dismisses action seeking redress as a result of Google’s alleged downward manipulation of the “Page Rank” it assigned plaintiff’s website.  This act allegedly reduced the ranking of plaintiff Kinderstart.com’s search engine in various Google Search results which, in turn, adversely impacted both the traffic and advertising revenue plaintiff Kinderstart.com’s site generated.  “Page Rank” is a system offered by Google for rating the usefulness of websites.  Google’s search engine utilizes the relative “Page Ranks” it assigns to websites in determining the order in which to deliver responsive search results to a user’s query. 

In its Second Amended Complaint, plaintiff claimed such acts constituted violations of the Sherman Antitrust Act, the Lanham Act and California Business and Professions Code Section 17200, as well as plaintiff’s right to free speech under both the Federal and California constitutions.  Plaintiff Kinderstart.com also alleged that it was defamed by Google’s alleged statement that the low “Page Rank” it assigned plaintiff’s site was arrived at objectively, without human manipulation.

The Court found that Kinderstart.com had failed to state a claim, and accordingly dismissed its complaint with prejudice.

The Second Circuit held that Network Solutions Inc. ("NSI") was immune from the Sherman Antitrust claims advanced by the plaintiff because the challenged actions, NSI's refusal to take steps necessary to increase the number of generic Top Level Domains ("gTLDs"), were undertaken at the direction of agencies of the Federal Government. The Second Circuit also dismissed plaintiff's First Amendment claims, which arose out of plaintiff's inability to operate a web site at any but the existing gTLDs.

(Court holds that defendant Network Solutions Inc. ("NSI") is immune from liability for the Sherman Act antitrust claims advanced by plaintiff because the actions which gave rise to plaintiff's claim were performed pursuant to an agreement with a federal instrumentality.

Pursuant to a Cooperative Agreement entered into with the National Science Foundation ("NSF"), NSI is at present the exclusive domain name registry for four generic top level domains, including ".com". It also operates the "A Root Server," an essential tool for the matching of alphanumeric domain names such as www.phillipsnizer.com to the Internet Protocol numbers assigned to each web site, and for locating web sites in general.

When a user accesses an alphanumeric domain name on his browser, his computer sends out an inquiry to ascertain the IP Number associated with that alphanumeric domain name. If a corresponding IP number is found on the root servers, the user is taken to the appropriate web site. If the IP number is not found, no connection is made.

In an effort to operate a competing domain name registry, PGMedia accepted domain name registrations for approximately 530 new generic top level domains. PGMedia's complaint was that neither the "A root server" nor any of the Internet's other root servers recognize its new gTLDs. As a result, Internet users could not access these sites with the same ease that they accessed other domain names. PGMedia sought to have NSI modify the "A Root Server" so that it would recognize PGMedia's new gTLDs. On instruction from both NSF and the Department of Commerce, NSI refused this request. This refusal formed the basis of plaintiff's Sherman Act claim. In holding NSI immune from this claim because it was acting pursuant to a contract with a federal agency, the court relied on the courts' decisions in Thomas v. Network Solutions, Inc., 2 F.Supp. 2d 22 (D.D.C. 1998)("Because NSI is acting in compliance with a government cooperative agreement, therefore, it is entitled to immunity from suit under the Sherman Act.") and Beverly v. Network Solutions Inc., 1998 U.S. Dist. Lexis 8888 (N.D. Cal., June 12, 1998))

Quick Hits

Court holds that distribution of open source software under the GNU General Public License, which allows use of the software and creation of derivative works therefrom for free, provided that all derivative works are similarly distributed under the terms of the same license, does not violate the antitrust laws.  As stated by the Court "the GPL and open-source software have nothing to fear from the antitrust laws." 

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