Google Taunted by Small Business Over Google Ad 'Shakedown'

When Jason Fried searched Google for the name of his software company, Basecamp, he grew frustrated with what he saw: A stack of four ads for competitors that appeared above the result for Basecamp’s own website. In response, Fried decided to fight back by buying his own ad on Google—one that claims the search giant forces small businesses to pay a “ransom” to protect their brand.

According to Fried, his company paid Google $1.40 per click to run the ad, which said “Basecamp.com | We Don’t Want to Run This Ad.” He shared the ad in a tweet that described Google’s search result policies as a “shakedown.”

When Google puts 4 paid ads ahead of the first organic result for your own brand name, you’re forced to pay up if you want to be found. It’s a shakedown. It’s ransom. But at least we can have fun with it. Search for Basecamp and you may see this attached ad. pic.twitter.com/c0oYaBuahL
— Jason Fried (@jasonfried) September 3, 2019

While competitors have purchased search result ads for “Basecamp” for years, Fried says he lost patience as the number of such ads appeared to grow, forcing his company’s website further down Google’s homepage.

“I’ve just been getting increasingly annoyed by the fact we’re the fifth result on our brand. Google always anyone with deep pockets to stand in front of your door and siphon customers away,” Fried told Fortune, adding that such ad practices wouldn’t be tolerated in the real world.

According to a Google spokesperson, for a small fraction of search queries, users may see up to four paid search ads before the so-called organic list of websites begin. The spokesperson added that Google would not allow competitors to use a trademark owner’s name in the ad if the owner files a complaint. In the case of Basecamp, the company has removed ads that violated this policy.

“Our trademark policy balances the interests of users, advertisers and trademark owners. To provide users with choice, and as is standard industry practice, we don’t restrict trademarked terms as keywords,” she stated.

This policy fails to satisfy Fried, however, who says it requires businesses to file a complaint for each new violation, and places the onus on trademark owners to police Google’s platform. He adds that it’s easy for ad buyers to subvert the policy by using slight variations of a trademark. For example, Fried says a competitor will get around the policy by putting “base camp” or “b camp” in its ads.

Fried’s decision to tweak Google with its own ad system earned plaudits from other business owners and some free media attention. But the controversy over competitors advertising against their rivals’ search results is hardly new.

“This has been going on for 15 years but every now and then a trademark owner wakes up and freaks out. They feel like they’re paying to buy back customers they’ve already acquired,” says Santa Clara University law professor, Eric Goldman, who has written extensively about Google’s ad policies.

Goldman says courts have made clear that trademark owners can’t prevent rivals from buying their name as ad keywords on Google’s platform. And in 2018, an appeals court ruled that a contact lens company engaged in anti-competitive practices when it entered a series of deals with competitors not to purchase certain keywords.

While Google’s ad practices around trademarks may be a source of frustration to many companies, it’s unlikely that regulators will do anything to change them, notwithstanding the current political backlash against Big Tech.

“There’s no easy legal recourse anyone can pursue, including the DOJ, the FTC and trademark owners,” said Goldman, who added that search result advertising is at the core of Google’s business and that the company will resist any intrusion on it.

“This is something Google will go to war over. They’re making so much money on keyword ads, they’ll spend millions of dollars to defend it in court.”