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Google and Yahoo! Gambling Trial Approaches

By Andrew Redfern @ 3rd January 2008 6:00 pm

While Internet search engine giants Yahoo! (Nasdaq: YHOO) and Google (Nasdaq: GOOG) recently settled with the United States government on claims the companies made millions through promoting illegal online gambling, a civil trial set to begin on February 11 will further test the liability of these companies in California, and will ask the courts to further restrict the ability of these Internet giants from similar action in the future.

The class-action lawsuit filed in California Superior Court in August 2004 alleges that Yahoo! and Google, along with several other popular Web sites, made hundreds of millions of dollars by allowing advertisements for illegal online gambling Web sites to appear on the search engine pages.

While the multi-million dollar settlements reached on December 19, 2007 resolve federal criminal charges against Google and Yahoo!, the companies neither contest nor admit they received payments from Internet gambling advertisers, according to published reports.

“We believe these companies have been profiting from this illegal practice for more than a decade, and we believe the agreement with the government does not go far enough,” said Reed Kathrein, lead attorney in the case and partner at Hagens Berman Sobol Shapiro (HBSS).

“The settlements are a great victory and a tacit admission by these online advertisers, but there is still more work to do in holding these companies accountable for the harm they have done to Californians, and to keep them and others from continuing these practices.

“Given the amounts the huge profits we believe they made, we believe these relatively small forfeiture penalties will not deter them or others in the future,” Kathrein added.

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