Groupon accused of 'bait and switch' advertising on Google.com in lawsuit
Groupon is being accused of running "false and misleading business and advertising acts" and running "bait and switch" ads on Google.com, according to a lawsuit filed by a bus tour company in San Francisco.
In the complaint, which was filed in a San Francisco district court, San Francisco Comprehensive Tours argues that Groupon has found a way to unlawfully manipulate Google's AdWords advertising system that pairs text ads from companies with related search results on Google.com.
From the lawsuit:
Beginning in about September of 2010, Plaintiff (San Francisco Comprehensive Tours) observed that the cost of its click-throughs began to skyrocket, and its ranking in the purchased placement area for searches including the terms "San Francisco Tours," "Alcatraz Tours," and "Napa Wine Tours" began to decline. At the same time, defendant Groupon's AdWords link began to appear at or near the top of purchased placement search results for Google searches including the terms "San Francisco Tours," "Alcatraz Tours," and "Napa Wine Tours"
The tour company said in its complaint that, to its knowledge, Groupon only offered a single coupon on its group-discount buying Website that had to do with San Francisco and tours during since September of last year.
The reason Groupon was dominating the Google AdWords traffic for the selected San Francisco tour related search queries, is because it was running text ads that mentioned tour discounts it didn't offer, San Francisco Comprehensive Tours said in its lawsuit.
The tour company said in the suit that AdWords ads from Groupon would advertise "Napa at 50-90% off," with similar claims for San Francisco and Alcatraz, but a click-through would lead to no landing pages that offered such discounts.
Officials at Groupon, based in Chicago, could not be reached for comment on the suit and the claims of San Francisco Comprehensive Tours on Wednesday afternoon.
-- Nathan Olivarez-Giles
Photos: Groupon signage is displayed on the entrance to the company's headquarters in Chicago on Dec. 14, 2010. Credit: Tim Boyle / Bloomberg