The plaintiffs, which include The Washington Post, Dow Jones, Tribune Interactive, The New York Times and Gannett, claim that Gator has been placing pop-up ads on their Web sites that compete with the advertising the sites sell themselves, said Terence Ross, a attorney at Gibson, Dunn & Crutcher, the law firm representing the plaintiffs.
The lawsuit focuses on issues of trademark and copyright violations, unfair competition and misappropriation and interference with future business contracts, Ross said. He also accused Gator of violating a Virginia state law concerning conspiracy to harm a business.
Gator displays ads based on a Web surfer's habits. Those ads are in addition to the ads that the Web sites themselves display. The suit charges that the ads Gator often displays are confused for ads displayed by the Web sites and are often in direct competition to either the Web site or the Web site's advertisers.
"The fundamental fact is that he is making money off of our investments in our Web sites," Ross said.
Gator chief executive officer, Jeff McFadden, issued a statement saying that all the charges are untrue and that Gator might countersue the Web site publishers.
"The plaintiffs either haven't done their homework, or more likely are trying to create a 'bump in the road' for Gator, a company that's rapidly winning online advertising dollars from Corporate America with its superior behavioural marketing platform," McFadden said. "We're highly confident that the allegations made by the plaintiffs are utterly baseless, and that the business practices we've employed for years with over 400 customers [including over sixty Fortune 500 companies] and 22 million active users are legal."
McFadden went on to say that less than one-third of 1% of the ads Gator displays are pop-up ads.
"The plaintiffs' true motivation here is clear: they want to slow the momentum of a competitor with a more effective marketing platform that's driving compelling, measurable results for advertisers," McFadden said. Ross said the plaintiffs haven't yet asked for monetary damages against Gator, and he said he isn't even sure if Gator is making a profit.
But Ross said that even if the company is not making a profit on the ads it displays on the plaintiffs' Web sites, Gator would still be liable for statutory and monetary damages, which could reach into the millions of dollars.