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BUSCAPÉ vs. Google Summary Judgment ruling

BUSCAPÉ vs. Google Summary Judgment ruling

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Published by: gesterling on Sep 10, 2012
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11/29/2012

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www2.ts.us.brPortalTJ3PainasPesuisasPrimeiraInstanciatssentencacomleta.asx7c...
18th Civil Court of the State of Sao PauloLawsuit n° 583.00.2012.131958-7Full text of the Decision on the Merits
This case has been analyzed.E-COMMERCE MEDIA GROUP INFORMAÇÃO E TECNOLOGIA LTDA - BUSCAPÉ filed this LAWSUITagainst GOOGLE BRASIL INTERNET LTDA and it claims, in short, that the Defendant, a giant in theworld wide web, originally engaged only in internet search services, started to develop and acquirecountless "sites" intended for other business, among which, recently, the shopping comparisonservice called GOOGLE SHOPPING.The Plaintiff asserts it is the owner of the shopping comparison sites BUSCAPÉ and BONDFARO,currently market leaders and Google Shopping’s competitors and, as such, it alleges that Defendantabuses its economic power and practices unfair competition, since it uses its search service to favorGoogle Shopping "site" to the detriment of Plaintiff’ "sites".In short, Plaintiff claims that Defendant manipulates its search service, that controls 95% of themarket, for the purpose of:i) allowing only GOOGLE SHOPPING to display images of the searched merchandise, which isnot permitted to BUSCAPÉ and BONDFARO;ii) embezzling and usurping the database of reviews - clients’ evaluations of the purchasesgathered along more than 10 years by BUSCAPÉ, BONDFARO and E-BIT sites;iii) artificially including GOOGLE SHOPPING in the first ranks of the search results, whenevera consumer conducts a query for the purchase of products in Google Search, thus harmingthe other competitor sites owned by Plaintiff.It claims that the result of the user query at Google, that is, the rank in which a certain site isdisplayed in the list of pages found with the searched parameters, is not an independent orimpartial one, since it is determined by a secret algorithm formula, held by the Defendant andmanipulated by it on its favor.It claims that Google is being investigated for the same practices in the United States of Americaand in European countries. It further reports that the facts discussed in this lawsuit are in partunder evaluation by the Secretariat of Economic Law of the Ministry of Justice, after a complaintfiled by Plaintiff, which has not been decided yet.For those reasons, alleging a sudden and significant loss of consumer market and revenues,besides the actual threat to its leading position in the segment, the Plaintiff requested aninterlocutory relief, so that Defendant is ordered to:i) stop using Plaintiff’s reviews, under penalty of a R$500,000.00 daily fine;ii) treat with isonomy the display of Google Shopping’s, Buscapé’s and Bondfaro’s results forthe queries conducted in Google Search; andiii) adopt for the queries in Google Search for Buscapé and Bondfaro shopping comparisonsites the same ranking criteria adopted for Google Shopping, demanding as a final result of this lawsuit that the complaint is accepted in the merits, confirming the interlocutory relief and condemning the Defendant to allow the display of images in Plaintiff's search results, aswell as to pay damages for pain and suffering, everything with legal increases and costs of loss of suit.The documents on pp. 35/575 were entered with the complaint.The interlocutory relief request was denied. Against this decision, Plaintiff filed an interlocutoryappeal, which was denied.
 
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Once properly served, the Defendant filed an answer, alleging as preliminary defenses: theprocessing of the lawsuit under secrecy of justice (confidentiality), lack of interest to sue due to thepending administrative dispute of the issue, existence of external priority justifying a stay of thislawsuit until the decision on the complaint filed by Plaintiff with the Secretariat of Economic Law,lack of standing to sue and defective complaint for failure to state a certain and determined claim.On the merits, the Defendant alleged that there is no unfair competition or abuse of economicpower, considering that:i) Google search results are displayed separately by thematic areas (shopping, maps, news,images and videos, for example) and that just reflects an evolution of Google search, whichstarted to display results both from generalist algorithms and from specialized algorithms ina sole page for benefit of the users, since the thematic results show with more accuracy theproduct or service actually searched by the user and everything just with just one query inthe general box;ii) users have other internet search services available, from Defendant’s competitors, suchas Yahoo!, Microsoft, Ask and others, and said sites also make available thematic results,including in the shopping category;iii) Defendant’s search service is not an essential facility, but rather a mere conveniencefacility, that is, if it is not used, competition will not be eliminated;iv) Defendant does not have the obligation to promote third parties’ sites and neither to rankthe Plaintiff, its competitor, in a certain way, in the search results;v) Defendant has the right to display search results in its service with basis on subjectivedeterminations of whatever the Defendant thinks its users will find more relevant;vi) Defendant has the right to show pictures and other information for its own shoppingresults and it does not have the obligation to do it for third parties’ sites; andvii) Buscapé and Bondfaro sites are leaders in the price comparison segment and havecontinued to be so even after the launch of Google Shopping, which is nothing more than athematic result that integrates the page of general search results, not constituting aseparate product.Moreover, the Defendant explained about the operation of its search service and the rankingcriteria, claiming that Google Shopping’s results as a thematic division of Google’s general searchresults, intended to meet the needs of the user who is looking to buy something, display onlyimages of products provided by merchants who make available for the user methods to directly buyfrom their site; but they do not display shopping comparison sites, because they do not sellproducts; it is certain, however, that said sites are displayed in the general search results.The Defendant denied the claim of violation of antitrust laws, and it upheld the lawfulness of themarket conquest due to the improvement of its competitive efficiency, achieved with theevolvement of its search mechanism. It also denied to have embezzled and display or havedisplayed Buscapé’s, Bondfaro’s or E-Bit’s reviews in Google Shopping’s pages, and it challengedthe suitability of the image used by the Plaintiff in the complaint (item 46). Finally it challenged theexistence of pain and suffering.The secrecy of justice (confidentiality) of the lawsuit was granted.There was a rebuttal, with exhibits, followed by a petition from the Defendant.This is the REPORT.DECISION.This is a case of summary judgment considering that the controversy is solely of law, once the factshave been sufficiently demonstrated. The production of expert evidence is unnecessary, since theDefendant admitted, in its extensive defense, that the results of its internet search mechanism arenot “neutral”, but rather reflect Defendant’s opinion about the way to identify the best result for the
 
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final intention of its users with a certain query.Besides that, the Defendant does not deny that Google Shopping results, as a thematic division of Google’s general search results, only display images of products provided by merchants who makeavailable methods for the user to buy directly in its site, but do not display shopping comparisonsites, such as Buscapé and Bondfaro, since these sites do not sell products. It also does not denythat it displays photos and other information just for its own shopping results and not for thirdparties’ sites.Therefore, the dispute lies only in the issue of law, and, likewise, oral evidence is not required.THE PRELIMINARY ALLEGATIONS DEDUCED BY DEFENDANT.THE COMPLAINT IS NOT DEFECTIVE.There is no such a thing as a defective complaint, which met all the requirements established inArticle 282 of the Civil Procedure Code, and it contains the logic report of the facts that describethe cause of action, which are compatible with the certain, determined and legally possible request.The need for an eventual indemnification to be defined in a future phase or to be determined by the judge does not make the request uncertain or undetermined.THERE IS NO EXTERNAL PRIORITY WHICH REQUIRES THE STAY OF THE LAWSUIT.The legal rule pointed out by Defendant is not applicable to this case. Using Article 265, IV, “a”, of the Civil Procedure Code, Defendant claims that the complaint filed by Plaintiff before theSecretariat of Economic Law, which deals with facts and addresses rights if not identical ones,almost coincident to the ones disputed in this lawsuit, between the same parties, is an externalpriority that leads to the stay of the lawsuit until a decision is rendered in the administrativesphere. However, this is not correct. The legal rule at issue reads as follows: "Article 265. Theproceeding will be stayed: (...) IV - when the decision on the merits: a) depends on the trial of another case, or on the declaration of existence or inexistence of a legal relation, which is the mainpurpose of another pending lawsuit." Law is very clear upon referring to the trial of anotherpending case or lawsuit, and it means that a stay may only be granted if the main or incidentaldecision depends on the result of another judicial action; it is not applicable to administrativeproceedings.THERE IS NO LACK OF INTEREST IN THE SUIT. The filed action is proper to the request sought inthe complaint and the need for Court intervention is evidenced by the resistance offered byDefendant to Plaintiff’s claim. The pendency of the administrative dispute of the issue cannotprevent Plaintiff from filing its claim with the Courts, under penalty of violation of the guarantee setforth in Article 5, item XXXV of the Brazilian Federal Constitution, according to which, “law shall notexclude an injury or a threat to a right from the Courts’ review.” THERE IS NO LACK OF STANDING TO FILE SUIT Contrary to Defendant’s claim, the draft of thecomplaint shows clearly that Plaintiff did not seek any claim in regard to third parties, but onlyclaims which interfere with the legal sphere of Buscapé and Bondfaro price comparison sites whichit owns.THE MERITS.About the claims of abuse of economic power and practice of unfair competition: in summary,Plaintiff claims that Defendant uses its search service to favor Google Shopping site to thedetriment of Plaintiff’s sites.The claims are without grounds, for the following reasons:I - The Defendant is a profit legal entity governed by private law, just like several others in its lineof business, and although its internet search service is the market leader in this segment, it is notthe only one. Other companies, which are Defendant’s competitors also have internet genericsearch services, some equally well-known by a large part of the public.As a matter of fact, there are several search services at the disposal of the consumers who arelooking for products, and at the disposal of the merchants intending to attract consumers. Just tomention some examples without intending to list them all, there are the Plaintiff's "sites", and alsothe search engines called Yahoo!, Bing (Microsoft) and Ask. Google search service competes withsaid search engines. Google’s leadership in the internet search segment in Brazil cannot bemistaken with a monopoly of that activity.

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