Aug08
29
Google South Africa In Trouble With Entelligence And The Competition Commission
It seems Google South Africa, which until now has pretty much hovered under the radar (other than one or two events that they’ve hosted), suddenly find themselves in hot water with Cape Town-based ‘IT and Digital Marketing solutions provider’ Entelligence the Competition Commission.
This intriguing press release found it’s way into my inbox today…
Cape Town – Entelligence Limited today filed a formal complaint against Google South Africa
with the Competition Commission of South Africa for abuse of dominance in terms of Section
S8(d)(i) of the Competition Act 89 of 1998, which prohibits a firm from “requiring or inducing a
supplier or customer to not deal with a competitor”.
In June 2008 Entelligence was awarded a one year contract with TDS Directory Operations
(Pty) Ltd. to provide online marketing services for the Yellow Pages website. This contract
includes the provision of services to manage a Google AdWords advertising campaign on
behalf of Yellow Pages.
Entelligence is a Qualified AdWords Company and in order to acquire and maintain this status
with Google, Entelligence manages a minimum of USD 100,000 of advertising expenditure on
Google’s AdWords platform every 90 days.On 25 June 2008 Entelligence met with Google South Africa to discuss the maximization of
traffic to the Yellow Pages website. Clear actions were agreed upon to jointly cooperate in
increasing advertising performance. However, that evening Google South Africa edited the
Cost Per Click for every Yellow Pages advertisement from 60 cents to R 2.00 without notifying
Entelligence in advance. This unauthorized and unethical behaviour jeopardized ad
performance and the net effect of this action on Google’s part was to drive expenditure on the
Yellow Pages account upwards.
On 26 June 2008 Entelligence rectified these changes on the Yellow Pages account and voiced
their concerns with the Country Manager of Google South Africa. Google South Africa
remained unapologetic and quiet about the incident. This single event led to a relationship
breakdown between Google South Africa and Entelligence.
Entelligence then discovered that Google South Africa was directly pitching for the account to
manage the Yellow Pages advertising on Google’s AdWords system. Google South Africa
announced that Yellow Pages is in fact a “named account” that they intended servicing
directly as part of their greater strategy within South Africa. If Yellow Pages is indeed a
“named account”, this should have been disclosed by Google South Africa to Entelligence
upfront so as to ensure competition on an equal and fair basis. Instead Google South Africa
took Entelligence into their confidence, encouraged discussion around Entelligence’s strategy
with respect to Yellow Pages, and allowed Entelligence to demonstrate their proprietary
technology developed to manage Google AdWords specifically for Yellow Pages.
Google South Africa has continued to engage with Yellow Pages and attempted to solicit them
to cancel their AdWords services with Entelligence and allow Google South Africa to manage
this account directly. The Managing Director of TDS intervened on 14 August and sent a very
clear request to the Country Manager of Google South Africa, requesting that Google South
Africa respect the agreement in place between TDS and Entelligence. Google South Africa’s
response has been to ignore this request, and furthermore they have indicated that the
contractual relationship between TDS and Entelligence is of no relevance to Google South
Africa.
Google South Africa has now informed Entelligence that they will inhibit our ability to continue
servicing Yellow Pages by refusing to renew our accounts held with Google and that they will
prevent us from creating any new accounts in an attempt to service Yellow Pages. Google
South Africa have abused a position of market dominance within South Africa and have now
created a situation where Entelligence’s accounts used to service Yellow Pages with Google
South Africa will not be renewed. Google South Africa are effectively making it impossible for
Entelligence to service its customer so that they can win the account by default. This act
clearly falls within the Competition Act’s governance relating to a competitor (Google)
“requiring or inducing” TDS to no longer deal with Entelligence.Google South Africa’s bullying tactics and ruthless approach towards winning desired accounts
do not ring true to our historical interactions with Google internationally. Google South Africa
did not win the Yellow Pages account and have now abused their position of power by
switching off Entelligence’s accounts used to service Yellow Pages.
Google is the dominant search engine and Pay Per Click advertising medium worldwide, but
even more so in South Africa. Entelligence estimates that Google holds at least a 90% market
share of search engine traffic in South Africa and approximately 98% of all revenue relating to
Pay Per Click search advertising in South Africa is spent on Google and the Google Content
Network.
Entelligence and many other search engine marketing agencies have represented Google for
years in South Africa. Google South Africa is now cherry‐picking customers with high
expenditure at the expense of companies that have historically supported and grown Google’s
client base within South Africa. Entelligence supports fair and honest competition, and would
happily bid directly against Google South Africa for future business, but when Google
manipulates accounts and abuse their power to win customers the line of fair competition has
been crossed.
If what Entelligence is saying is verifiable fact, this is a concerning development and could tarnish Google’s good image in the local market. It’s too early to be making enemies, methinks. Even little ones (no offense to Entelligence).
What do you think?
Do just a little evil?
Ruthless perhaps but ‘concerning’ I not so sure….
The ethics of winning the business might be questionable but you can’t act all surprised that Google is now targeting these high value clients.
(Switching off their accounts is a dodgy step but I can’t believe that this rings true - too much to lose from a reputation perspective.
They didn’t come into the country to service other peoples clients. They came in to make money and the marginal SEO and small marketing houses are going to lose their big clients.
But it is also not the worst thing that can happen. A big employer like Google has a lot of value to add and I think that it will help the SA web scene to have a strong Google presence here.
On an aside - very few people have mentioned the strategic value of Altech winning their court case. It will make a big difference to the SA Broadband landscape as well…
Well done Altech
>If what Entelligence is saying is verifiable fact, this is a concerning development
Are you mad? Concerning? Outrageous, maybe. Prosecutable, maybe. Unaccetable, certainly. Could tarnish their image? Who care about their image — you should be caring about their actions.
If the charges are true. This one should be watched closely.
@Marc Ashton I’m not surprised at all, I’d be surprised if they weren’t aggrsively targeting high value customers. I guess I should’ve provided more background. I know the Google guys and have had no reason thus far to dislike them. So it’s concering from a relational perspective more than anything.
That said I’ve had a call from someone, since I published this post, telling me that Entelligence is not exactly known for ethical business dealings. So I’m interested in how this will pan out simply because, well, because it’s interesting!
Couldn’t agree more regarding Altech
@Roger easy tiger! Everyone’s innocent until proven guilty. As you said, IF the charges are true. I know the Google folks and so am unlikely to make impassioned comments before this is verifiable fact.
I repeat. We need a strong Google in SA for a lot of reasons.
Damn interesting and I reckon between Google, BLT and Altech, we’ve got a very interesting tech landscape unfolding
Mark, give me a shout if you want proof that Google SA has told us they will switch off our accounts (first one at midnight today) in order for them to service Yellow Pages. I have emails from Stafford Masie (Google SA Country Manager) indicating that this will happen & confirming that Google SA won’t allow Entelligence to create new accounts in an attempt to service Yellow Pages. It would be naive of Entelligence to make claims such as these against Google if we couldn’t substantiate them.
Howdy Sean
How Google goes about their business is for them and the guys they take on - not my place to comment beyond saying I would have THOUGHT it would be dodgy to put something like that in writing.
Having skimmed your website and seen the names on your shareholder list I suspect Google have picked the wrong people to throw their weight around with. Gonna get some popcorn and settle back to watch the scuffle - I’ll pop you a mail…
Sean, it sounds quite desperate and pathetic when you’re willing to show anyone the mails etc of what you’re talking about - it also damages your case in court. You’ve been known around the industry as a less than ethical business man who smiles the one day and pulls the knife the next.
I also have trouble understanding your logic mate - Google CPC marketing is your life blood - why would you then sour the relationship with Google if that’s what you rely on?
Funny….
Google CPC is our lifeblood - it doesn’t give Google SA the right to bully allies into handing over large accounts.
Strange that the person commenting on my integrity remains Anonymous. Desperate & pathetic to show emails supporting our story? No, it’s just substantiation of actual events that have taken place.
Irrespective of the details in your arguments…it is your manner and method(s) used to address this with Google! I find it all extremely unprofessional and if you ever had a hope of Google partnering with you in future…you’ve probably nuked that now! (How can you say “CPC is our lifeblood” and then attempt to kill the very thing providing you that lifeblood?) You cannot possibly now resolve this amicably considering what you have published and the level of detail you have disclosed - it simply outlines that you are handling this thing too emotionally and you are not trying to resolve the matter…it looks like you’re simply out to tarnish Google’s rep by attacking them via public forums. I’m pretty sure the people at Yellow Pages must be pissed off with you dragging their organization into this and mentioning emails from their CEO - did they give you the go-ahead to publish commentary on their business conversations and emails? Btw: Who are you guys anyway? I’ve been in the media industry for many years here in SA and never ever heard of Entelligence…you portray yourself as a large organization handling huge sums of Google adwords spend - I am not sure you are as you say! If I were Google I would investigate your claims associated with being an Adwords Certified company…even before you won the contract at TDS - someone has informed me that the company is pretty much just you and a few other staff members…and TDS is your only real “big spender”. From where I am sitting…I don’t see why Google should even work with you… IMHO: Entelligence simply looks desperate and if I were any organization working with you…or about to work with you…I’d bail out immediately! Sean, your facts may be 100% correct and Google may be 100% guilty…but…my dear friend…this is not how you go about “amicably” resolving matters of this kind… Good luck at the Competition Board - hope you have the legal funds and time to ride this one out…considering that Google gets slapped with billion dollar lawsuits every week…you’re in for the ride of your life - ciao!
https://adwords.google.com/select/ProfessionalStatus?id=028R-JMoxfsODsrMKMiDiQ&hl=en_US
WOW - Reading down that list of comments was like slipping down and oil soaked slope at a Norwegian leather pants competition … Fast as hell with all kinds of things happening that really shouldn’t.
Relevance is important here guys!
1) If there is an action resulting in a case for a claim - let it be dealt with in the correct forums. This is not only is this the correct way to do it , but it also protects all parties involved. Cards close and lack of “hearsay” is always good in a legitimate legal matter.
2) Size of the organization acting as the claimant really doesn’t matter (stop sniggering at that comment please…damn peanut gallery).
Good luck to all parties and I hope that the outcome is one that finds favour with all (although sadly in legal dealings … The guys who usually win are …. Yes you guessed it … Our attorneys driving new X6’s)
Merde. You know how mild inebriation and coherent expression can be mutually exclusive?
My comment above was not directed at Google’s guilt or innocence (that’ll come out in the legal wash) — but rather how people describe their (alleged) activities. “if it… is verifiable fact, this is a concerning development” — this really bothers me as it implies that a highly illegal or at least unethical practice is merely “concerning”.
This slippery slope of tollerance for dodgy business practice is getting steeper. The next comment says: ruthless, but not concerning”. So “ruthless” (in the context of illegal activity) is OK now?
What, twenty years of Telkom, Tiger, Mittal, SAA playing illegal hardball (e.g. http://tinyurl.com/662run) has inured us to it, that it’s ok, if you can get away with it?
If the charges are true… although Google’s loud silence is not doing them any good. It’s a company we should be scared of.
Here we go: The local arm of the California-based behemoth responded with a brief statement: “Google has strict professional protocols for working with agencies and clients in SA and around the world; these were developed specifically to ensure that a fair and open business model continues to be in operation. The claims put forward are without merit.”
Just seen on ItWeb.co.za
Angus your comments above amaze me! You speak about Sean Riley ‘resolving this amicably’ as if he is some kind of irresponsible idiot who one day suddenly had a rush of blood to the head and ran off to the competition board to take on one of the largest corporations in the world??? Do you seriously think that between the 25th June and now that he didn’t try to solve it amicably? Could it not be in the realm of possibility that this was the only choice left to him?
What would he achieve by being ‘simply out to tarnish Google’s rep by attacking them via public forums?’ What do you hope to achieve by attacking Entelligence and Sean’s rep via this public forum? Did you ever have a look at how the very next post after yours squashes your pathetic ideas as to what you would do if you were Google re: being adwords certified? I see you have not commented on this.
I have had a contract with Entelligence that has been brilliantly serviced over the last year. IMHO I don’t care about YHO. The fact that you start your comment by saying: ‘irrespective of the details in your arguments’ shows a lot about your character. I hope the next time you lose a big contract or job that you are presented with the same comment.
History has been made up of millions of people like you who are too shit scared to stand up against something that is wrong. Don’t simply take sides with the biggest guy on the playground. SA would not be where it is today if people in the past had settled for being pushed around by domineering institutions.
Grow a spine Angus. You are the idiot here. Congrats Sean and good luck. Keep doing the right thing instead of simply doing things right. I am sure there are many other companies that have received the same treatment (that have people like Angus at their board room table) and have not had the guts to stand up and be counted.
I for one am in David’s corner in this fight.
Vs. Gooliath….lol. Me too.
Allan, thanks for another online emotional outburst… (You sound like an employee of Entelligence…or maybe you are Mr. Riley himself?? Why don’t you disclose to us who you are that is so “brilliantly” being serviced by them?) If this Entelligence company has any common sense it would never have approached this matter in the way it has… It seems to me that they are simply and desperately attempting to discredit Google SA… Irrespective, I’m not going to get into some emotional retort with you either. Your language used, aggressive behaviour and insults says a great deal about nothing! I just think that if this company had any common sense, they would submit their complaint to the Competition Board and once Google is proven wrong…*then* settle it amicably (i.e. claim relevant damages) and get on with business!! This complete disclosure of supposed dirty laundry in the public appears legally ill-informed, attempts to discredit and attack Google, and seems like they’re simply looking for public support re their allegations. For goodness sake…how can they possibly expect Google to continue their partnership with them after all this? My point here is… they claim they tried every possible means… then why didn’t they just go to the complaints commission, make their case, win it, claim damages and continue with their CPC “lifeblood” business? Why this aggressive public attack? If Google does loose the competition commission battle…I am 100% sure we’ll see Google taking counter legal action on the grounds of defamation… Allan, how the hell can a CEO of a company offer to forward emails from Google…on this blog (see above)??? Surely, at minimum, this is a breach of confidentiality if they are truly a Google partner? Anyway Allen..business is not about “growing a spine” and recklessly attacking a company in public forums…it’s about making your case professionally…winning it…receiving recompense for your damage incurred…and getting on with it. If Sean Riley and the folks at Entelligence have been bullied by Google and have been abused as they claim…then I’m all for Google being held accountable as per our laws in South Africa…BUT…if I were Google…I would distance myself from this company immediately! This isn’t about flexing muscle, taking on “Goliath” and showing everyone how brave you are…this is about good business practice, ethical engagements, and maintaining professionalism at all times - I believe more of this will get us further in SA versus these Rambo type tactics Entelligence has chosen. So…I’m not in any corner on this one…because nobody has proven Google or Entelligence wrong/right yet! I am in the corner of the fair application of judgment and righteous application of justice! What I see happening here is mere bad business practice and a company that has just pissed in its’ own well! Allen…I am a member of the board at several organizations…and I hope to God we don’t have people like you on any of them in SA! The “spineless” Angus
Angus, your board committments obviously don’t warrant much time since your input on any blogs relating to this matter represent a substantial time investment on your part - are you being paid for this?
If Google did do what Entelligence says it did, then surely Entelligence has the right to defend its claims with hard fact? To date, Google has said Entelligence’s claims are ‘without merit’… what does this mean? Why doesn’t Google address each claim in a factual, objective manner? Did they alter CPC without permission? Yes or No? Did they pitch directly for the account - Yes or No? Did Google tell Entelligence that they will prevent them from servicing Yellow Pages so that they can service them directly? Yes or No?
Entelligence’s accusations appear so far fetched that I can understand their need to share hard evidence to support their claims. What is unethical about this? The correspondance wasn’t of a confidential nature - Google has openly told many agencies in SA that they have so called ‘named accounts’ that they want to service directly.
Why would Entelligence attack the Google Brandsh? To what end? Entelligence has merely sought justice against a dominant force in the market place who is abusing their power.
All I can say is good luck to Mr Riley and Entelligence and I hope others come forward as I am sure this was not a isolated incidence.
And to Angus, we know you work at Google!
Funny, I got an email from someone at Google once and the footer read:
This email may be confidential or privileged. If you received this communication by mistake, please don’t forward it to anyone else, please erase all copies and attachments, and please let me know that it went to the wrong person. Thanks
So Phil….aren’t they then breaching this ‘contract’?
And Steven…doesn’t Angus work at Cerebra?
Alright lads, I need to step in. The Angus who posted the previous comments is not the same Angus who works with me at Cerebra. I have nothing to do with this concern, and neither do any of my companies, other than the fact that I found it an interesting and attention-worthy industry development.
Resume your mudslinging, if you so wish…
It would seem that the email/s were clearly meant to be received by Mr Riley and not forwarded to him by mistake. The content may have been confidential or privileged however in this case since Google had allegedly already, openly told other SA agencies about their intention to service certain ‘named accounts’ I fail to see how any contracts have could have been breached.
I have to agree with Phil and Steven…. Angus does appear to be openly perusing any opportunity to discredit Entelligence and Sean Riley. Angus your posts portray your concerns more as an opportunity to settle some personal vendetta than a true concern for professional business practice.
With the amount of people you’ve screwed over before … all I have to say is “KARMA BABY!”
lololololololol!
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