Company news: American Airlines sues Google over search
American Airlines is suing Google Inc. over the Internet company’s sale of keywords ads for rivals triggered by its own trademarks.
American filed a lawsuit Thursday in U.S. District Court in Fort Worth seeking unspecified damages.
A Google visitor who enters certain words or phrases that American trademarked — for example, Aadvantage, the name of its frequent-flier program — will get links to American’s Web site but also its rivals under “sponsored links” — targeted ads that appear alongside the regular search results.
Google makes most of its money from such keyword ads.
“When done right, search is a great tool, but we have a problem with this part of their business,” said Billy Sanez, a spokesman for American.
Sanez said the results could confuse consumers and divert customers away from American’s own site.
American, a unit of Fort Worth-based AMR Corp., tried to negotiate a settlement with Google before going to court, Sanez said.
Google spokesman Jon Murchinson said the company is “confident that our trademark policy strikes a proper balance between trademark owners’ interests and consumer choice, and that our position has been validated by decisions in previous trademark cases.”
Similar lawsuits against Google are fairly common, although they tend to involve smaller companies. Google faces a November trial in a lawsuit filed by American Blind & Wallpaper Factory Inc.
More than two years ago, a federal judge in Virginia ruled in a similar case filed by insurer Geico Inc., ruling that Google’s advertising practices were legal. Geico had complained that Google was letting rival insurance companies pay to have their ads displayed when a user searched for “Geico.”
But the judge left the door open for Geico to collect damages from Google for featuring ads that used Geico’s name in the text, rather than just using the trademark to trigger the ad. The two settled in 2005.
Google lost cases in France, but has won others in the United States.
“Federal regulators on Friday appealed a court ruling that allowed Whole Foods Market Inc. to purchase its rival organic grocer Wild Oats Markets Inc.
The Federal Trade Commission has also asked the U.S. District Court for the District of Columbia to delay the closing of the deal pending the outcome of the appeal.
The FTC is seeking to block the $565 million acquisition, arguing that it would stifle competition and lead to higher prices in the premium organic food market. The companies say the deal won’t hurt consumers because they also compete with conventional supermarkets.