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Should Google verify the credibility of every business that advertises on it?

Does Google have a moral duty to verify the claims of everyone who advertises on its network?

Mark Baldino certainly thinks so. The 61-year-old locksmith from Lorton, VA is suing Google and two online business directories, Yellowbook and Ziplocal, for giving ad space to competing locksmith businesses.He says these businesses are mostly fraudulent or unlicensed, providing sub-par services to customers. Baldino says he’s suffered a $8 million loss in sales from 2008 to 2013 because the ads he was paying for on Google were being crowded out by these unverified competitors.

The New York Times reports:

Mr. Baldino, 61, said he blamed search engines because they publish thousands of listings for unlicensed locksmiths, which make it harder for consumers to find his company amid the clutter. He said the search engines were aware that “phony” locksmiths clog their listings, and, in fact, the search companies benefit from their inclusion because these listings force Baldino’s and other legitimate locksmiths to pay for ads to help their businesses appear higher in search results.

Baldino has a point when he says Google and other online directories benefit from companies competing for prime ad space. It can charge the businesses higher prices for the search ad placements. However, ultimately Google’s credibility as a search engine will suffer if it keeps returning results for the crappiest businesses just because they paid the most to have their ads shown. The trouble is, there’s no way Google can go about verifying the quality of these businesses itself. Everything depends purely on the word of users who can review and rate these businesses, a slow and not entirely reliable process.

However, as one source frames it in the article, what if the same standard was applied to listing of doctors and other health practitioners? Unlicensed quacks who pay top dollar could easily get optimum placement for their ads, and it would only be a matter of time before Google is held responsible for a case of fraud, malpractice or worse.

This is where it gets tricky. The law states that Google and other online publications aren’t liable for the actions of businesses that advertise on them:

In their most recent motions, the defendants contended that, among other things, the claims by Baldino’s could not satisfy the requirements of the RICO and Lanham Acts, and that the defendants were immune from liability according to the Communications Decency Act, which protects many online intermediaries that publish information provided by others, with exceptions, for example, for certain criminal-based claims.

That means that in order to prove liability, Baldino would have to prove that Google worked directly with advertisers who indulged in criminal activity such as fraud, which of course is much harder to prove.

Despite the increasing variety of advertising and hyper-local targeting features available to them on networks such as Google and Facebook, this case shows just how much the odds are stacked against small businesses in the online world. Google may say its algorithm has been tweaked to favor them, but it highlights that no matter how much data the company has, it still relies heavily on the good old-fashioned word-of-the-people as its most important indicator of credibility. It’s a Utopian concept in theory, but an easily gamed system in practice.

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