Google faces class action over “misuse” of restaurant tradenames
Restaurant owners have accused Google of “deceptive” online ordering practices that would misappropriate tradenames without their permission.
The class-action lawsuit, published on the US District Court for the Northern District of California on Tuesday, March 8, claims that Google deliberately “mislead” consumers to order food through its online service by using the tradenames and reputations of the restaurant class members, as well as charge them additional fees.
The tech giant would direct consumers to “purposefully designed, unauthorised” pop-up pages owned and controlled by Google and would use these pages to capture food orders that it would forward directly to delivery food delivery services including Postmates, DoorDash, and GrubHub and charge the restaurant a “substantial” fee for the order.
Google reportedly “never” obtained the restaurant’s approval to launch or operate the storefronts or utilise the tradename.
The lawsuit was filed on behalf of the class by law firm Keller Lenkner, together with co-counsel Sperling & Slater PC and Hausfeld.
Keller Lenkner partner Jason Zweig said: “The restaurant industry has already been gutted by the COVID-19 pandemic. Online orders have served as a lifeline to help them reach customers, make a slim profit, and continue employing their staff members.
“It is appalling that Google would take advantage of an industry going through such a challenging time and, through these deceptive and illegal practices, take a portion of their hard-earned profits for itself.”
The lawsuit alleges that the restaurants were “robbed” of valuable direct customer interactions and “forced” to pay up to 30% per order to delivery platforms.
“Restaurants need to make a profit to stay in business. But Google’s deceptive webpages divert orders and customers away from the restaurants and into a process that benefits Google, but not the restaurants,” added Tim Sperling of Sperling & Slater.
While certain delivery services are licensed to sell the restaurant's food items within their own websites and applications, the agreements do not allow for Google to capture food delivery orders, the complaint said.
Bonny Sweeney of Hausfeld said: “We will work diligently to ensure not only that the plaintiffs are compensated for the losses they’ve experienced, but also to hold Google accountable and ensure no restaurants suffer in the future because of the company’s deceptive practices.”
The lawsuit asks the court to order Google to pay enhanced damages, as well as order injunctive relief prohibiting Google from using the restaurant class members’ tradenames in association with online food ordering services.
Changing the system
Prior to 2019, when Google received a user's search for local restaurants, it would provide information on the restaurant that the consumer was searching for including contact information, a list of “natural” search engine results, and “two to three paid advertisements”. In this case, Google would generate revenue purely through users interacting with the paid ads, the suit explains.
However, in 2019, the lawsuit alleges that Google altered the search results for restaurant searches in order to “make even more money” from users searching for restaurant options.
Google presented users with an “Order Online” button below the tradename of a restaurant in its results that would direct users to an “unauthorised” Google webpage, said the claimants.
According to the complaint, in one scenario, the button would lead to an online storefront owned by Google in which customers could place orders for the restaurant's products.
It would then direct the order to a food delivery service “unbeknownst to the restaurant” and charge the restaurant a substantial fee for securing the order.
In another scenario, it would link to a webpage that would include links to competing delivery providers that “deliberately misbrands” itself to appear to have been authorised by the restaurant.
“Google’s newest business models were not, and are not, lawful,” the lawsuit claims.
News disputes
This is the latest case of legal action against Google over “unauthorised” use of protected content on its services.
Over the past few years, Google has been targeted by various governments and industry watchdog groups with demands that they pay publishers for hosting their original content on its services.
This resulted in France’s competition authority ordering Google to approach news outlets and strike neighbouring agreements to pay online news services to host their content on services like Google News.
In early March, the company announced that it had struck a new deal with a consortium of 300 French news publishers to pay the member press outlets to rehost their content.
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