As antitrust investigations are heating up against Google, business owners are speaking up against one of its ad practices, known in the industry as "conquesting."

The practice allows businesses to bid on a competitor's name, even if that name has been trademarked.

The only way to remain at the top of search results, companies like Edible Arrangements told Business Insider recently, was to pay millions of dollars to outbid competitors.

"I hope people realize what they are doing is killing Main Street businesses," Edible Arrangements' founder, Tariq Farid, told Business Insider in a recent interview.

Last week, Jason Fried, the founder and CEO of Basecamp, aired his frustrations on Twitter, calling the practice "a shakedown" and "ransom."

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Edible Arrangements, the fruit-on-a-stick gift baskets, are often sent for joyous occasions — birthdays, graduations, and work promotions, to name a few. Tariq Farid, the company's founder and CEO of its parent company, Edible Brands, however, hasn't personally been overflowing with fuzzy feelings lately.

As Farid told Business Insider in a recent interview, that's mostly because of a Google ad practice he says is "killing" business for his 1,100 franchise owners across the US. In response, Edible Arrangements has filed multiple lawsuits against Google over its ad practices, at a time when government regulators are investigating the tech giant over antitrust concerns, especially as it relates to its advertising business.

Read more: 50 state attorneys general have launched a formal investigation into whether Google has engaged in anticompetitive practices in its ads business

The issue, Farid said, starts when someone types his company's name — Edible Arrangements — into Google. Even though the company's website is the first organic search result Google surfaces, it is not listed at the very top of the page. Those top spots are reserved for advertisements and are awarded to the businesses that pay the most money for the keyword search term, in this case "Edible Arrangements."

That means, to remain atop Google's search results, Farid and his team have to bid on their own, trademarked brand name to beat out competitors.

"Google is manipulating this for their own benefit," Farid said. "I'm OK for that when it comes to generic terms like 'fruit' or 'basket.' But not for Edible Arrangements, which is our mark. Google has come out and started making millions of dollars off of our name."

The ad practice, known within the industry as "conquesting," is not uncommon or unique to the way Google does business. For instance, when searching on Amazon for a particular product, similar products from competitors will most likely show up alongside it. That product placement is often not free. Also, when searching in Apple's App Store, ads for competitor apps will often be the top results.

Still, Google's involvement in conquesting has raised questions, especially with federal and state agencies now formally investigating the search giant over antitrust concerns. This Monday, 50 state attorneys general announced a joint investigation specifically looking into whether Google's advertising businesses had ventured into monopolistic practices.

Forcing businesses to spend big money just to stay atop search results for their own name could raise red flags for regulators.

A "Thank You" Edible Arrangement. Edible Arrangements

In response to the ad practice, Edible Arrangements filed a $200 million lawsuit against Google in early 2018 over claims of trademark infringement. That case has been moved to arbitration and is still pending.

In a more recent case — filed in December in Georgia, where Edible Arrangements is headquartered — the gifting company is suing Google while alleging theft.

"This is a simple case," the lawsuit said. "Google cannot take someone else's property — in this case, Edible IP's property — and sell it on the internet."

The Georgia suit was most recently heard before a judge August 9, when Edible Arrangements argued against Google's motion to dismiss the case. A preliminary decision is still pending.

A Google representative declined Business Insider's request for a comment on the case.

The person did confirm the ad practice of allowing businesses to bid on other, trademarked brand names but said Google prohibited a competitor's name from being used in the actual text of the ad if it was deemed malicious.

"For trademarked terms like the name of a business, our policy balances the interest of both users and advertisers," the Google representative said. "Like other platforms, we allow competitors to bid on trademarked terms because it offers users more choice when they are searching. However, if a trademark owner files a complaint, we will block competitors from using their business name in the actual ad text."

Farid said Edible Arrangement franchise owners, who collectively share the cost of marketing expenses, spent over $3 million in 2018 to bid on its own company name. That spend, however, was not sustainable, he said, and the company has since cut down on its bids.

Today, when searching for "Edible Arrangements" on Google, ads for its competitors, like 1-800-Flowers and Shari's Berries, often appear at the top of results.

If Edible Arrangements is successful in either of its suits against Google, limits could be set on the tech giant's current grip over businesses vying for top placement.

"I hope people realize what they are doing is killing Main Street businesses," Farid said. "When someone can't afford to do advertising because they have to advertise just to protect and police their own name, it's affecting small businesses."

'The whole thing just feels rotten and an example of Google abusing its power'

Another company, which is not taking Google to court but is still up in arms over the issue, is Basecamp, a project-management tool.

Last week, Jason Fried, Basecamp's founder and CEO, tweeted his frustrations with the practice, calling it "a shakedown" and "ransom." Fried's tweet was also accompanied by an ad his company was running in protest of the Google practice, which said, in part: "We don't want to run this ad. We're the #1 result, but this site lets companies advertise against us using our brand. So here we are."

Fried told Business Insider in an interview this week that much of his frustration with the practice was how it appeared counterintuitive to Google's stated mission of providing relevant search results to users.

"I don't understand how you can be number one on an organic result for your brand name but actually show up fifth because you have four ads ahead of you that they are happy to sell," Fried said. "Those ads are nowhere near as relevant as your brand, which people are clearly looking for. The whole thing just feels rotten and an example of Google abusing its power."

Flickr/Jason McELweenie

Basecamp's chief exec also questioned why Google ads, which were once clearly defined by a yellow-colored background, had increasingly grown to look more like organic results. Fried said this could lead to customer confusion. It could also cause customers to buy a competitor's product over the product they originally searched for.

"Over the years, ads have become less and less obvious," Fried said. "The whole thing is obscuring the truth, which is like, what are people paying for and what should people be getting in terms of relevancy and intent."

As for whether government regulators will bring relief to these concerns, Fried at least remains hopeful, saying it seems as if federal oversight may be one of the only ways changes will be made.

"I don't think Google is going to volunteer to make changes," Fried said. "They're going to do what they're to do to extract as much money from people as they can. That's the story. That's how all these companies behave."

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