Google versus Entelligence: the outcome
Google was recently accused of dodgy business practices in Kenya by Stefan Magdalinksi, CEO of online company Mocality. Magdalinksi accused Google of misrepresenting their company and hurting their business.
Google quickly apologized for the situation, saying that they “were mortified to learn that a team of people working on a Google project improperly used Mocality’s data and misrepresented our relationship with Mocality to encourage customers to create new websites”.
This is however not the only time that Google was accused of shady practices in Africa. In 2008 South African marketing company Entelligence, alledged that Google SA, and former country manager Stafford Masie, used strong-arm tactics to wrestle business away from them.
According to Entelligence’s CEO at the time, Sean Riley, Google South Africa approached one of their largest Google Adwords clients (Yellow Pages) directly; and when they could not win the contract, started to threaten his company.
Riley quoted Google SA as saying “hand over Yellow Pages or we will switch off your AdWords acounts. Any attempt to create credit card linked accounts to service Yellow Pages will be prevented…”
What happened?
Although the case enjoyed a great deal of attention in 2008, the resignation of Masie in early 2009, and Riley’s migration to a new venture, meant it fell off the radar.
The Kenya issue, however, made a few people ask what happened between Entelligence and Google SA. The answer is that the case was settled in March 2011.
Riley said that Google approached them with an offer to settle the case at a time that they were negotiating with an international investor, and they accepted the offer. According to Riley the issue was settled around March 2011.
“Basically, they wore us down financially & the settlement was a financial necessity for us but certainly not justice,” said Riley.
“We did not recover our costs, but the dispute was never about money but [rather] about bringing justice to a monopoly that acts without consequence. During the time of our dispute there was even clear evidence that they censored negative publicity within their search results.”
Riley is however more positive towards the current Google SA management. “The new Google leadership in SA seems to be more responsible, though one has to say this is probably simply because they don’t want to be caught again.”
Google has a different story
Google says that the case was resolved in 2010 with Entelligence withdrawing the case and covering their own legal costs.
“Entelligence’s accusations of anti-competitive behaviour were unfounded. They agreed to withdraw their case against Google and pay their own legal costs,” Google said.
“Google has strict standards for working with advertising agencies in South Africa and will continue to ensure that it does business in a fair and transparent manner.”
Adam Cohen, Google’s head of competition policy for Europe, Africa and the Middle East at the time, said in 2010 that “this is a case where somebody took a punt and decided that maybe they could get a financial settlement out of it”.
“In the end, two years later, they backed down and they paid their own costs. So we feel vindicated by that,” Cohen said.
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