SEO RICO: About The Time A Law Firm Sued A Marketer Over Unmet Expectations

SEO RICO lawsuit case summaryWhen we say RICO, you may think Goodfellas. Well, think again, because a law firm pursued an SEO RICO lawsuit against an online marketing firm, over so-called “worthless [online] marketing [plans] and fraudulent link-building [plans].”

Yep, gang, you read that correctly: professional SEOs are being brought up on racketeering charges for not meeting client expectations. Does this plaintiff, the firm, have a legitimate shot at winning? Is it possible to successfully sue an SEO company for poor results? We’ll deconstruct the lawsuit and examine the complex relationship of online marketing, search engine technology, and the law.

Note: For several reasons, we use fake names when discussing headline cases.

Before We Sink Our Teeth Into The Case, Let’s Take A Quick Look At The Current State of SEO

The Uncertain World of Search Engine Optimization

Imagine you’re an elementary school educator with 20 years’ experience. You’re a rock star when it comes to teaching cursive writing, science 101, and early childhood socialization. Then, one day, without warning, you arrive, in your classroom and find 20 M.I.T. educated scientists expecting you to wax poetic about the Quantum Field Theory. Oh, and if you didn’t say something substantial and innovative, you’d get fired.

That is the environment in which online marketers deal, daily. Every so often, without warning, SEOs wake up to discover that Google changed its algorithms. Phones start ringing; angry customers demand to know why their websites no longer “show up in Google.” Simultaneously, industry forums alight with the only question on everybody’s fingertips: “Did anybody else drop dramatically in the SERPs?”

Panda and Penguin: The Algorithm Updates That Changed The Web Forever

“Keywords” used to be the end-all, be-all of online marketing. But in time, algorithms grew up, and non-keyword-laden content performed better in the SERPs.

Then, between 2010 and 2012, Google unleashed two mega-algorithm updates called “Penguin” and “Panda.”

Panda and Penguin dramatically changed the online marketing landscape. In what seemed like the stroke of a wand, tried-and-true search engine optimization methods became obsolete. Online businesses suddenly stopped generating money. Elaborate linking schemes were rendered useless. It was, in a word, pandemonium.

Online marketers worked feverishly to “figure out” the new Google. So-called link farms deteriorated like an untended city park; SEOs abandoned link mazes that dominated just 12 hours earlier; consensus on the street was that lots of high-quality content and high-quality links were the new standards.

The Panda/Penguin updates figure prominently in this RICO SEO lawsuit.

The SEO RICO Lawsuit: Who is Suing Who?

So let us get down to the particulars this SEO RICO case.

Plaintiffs: A law firm, that we’ll call “Smith & Smith” (not real name).

Defendants: Acme Marketing (not real name), an online marketing firm hired by Smith & Smith.

Timeline of the Marketing Defamation Lawsuit

From July 22 to 23, 2011, the defendants attended an Acme seminar where they received “generic” handouts. Mentioning the marketing material may seem like a random point; but, as you will soon see, it’s an essential detail in this SEO RICO case.

After the two-day seminar, Smith & Smith hired Acme to develop and maintain the firm’s online marketing program. Both parties signed a $40,000 contract, and it was off to the digital races. When the initial contract ended, Smith & Smith signed up for another 6 months of Acme’s service.

This is when the story takes a turn. Apparently, while under the second contract with Acme, Smith & Smith conducted an internal audit of its website. The firm noticed low-quality incoming links and instances of duplicate content — two pre-Panda/Penguin online marketing techniques.

Unimpressed, the attorneys ended their relationship with Acme and requested a refund. Acme refused. So, Smith & Smith filed a RICO lawsuit.

Why RICO?

RICO stands for Racketeer Influenced and Corrupt Organizations. Passed in 1970, RICO was meant as a catchall for organized crime. In brief, an individual associated with a criminal “enterprise” can be brought up on RICO charges if he or she commits two similar crimes in a 10-year period. RICO is different than other fraud charges because the focus is on a “pattern of behavior” as opposed to a one-off act. If an individual is guilty of RICO charges, he or she can be fined up to $10,000 and 20-years in prison, per incident.

Presumably in an effort to highlight the “patterned behavior” necessary to win an SEO RICO claim, the plaintiff’s lawyers explained, “this case is not being brought for lack of success per se, the lack of success merely being evidence of fraud and damages to business or property.”

The “enterprise provision” also plays a role in RICO claims. It’s not enough to bring a lone criminal up on RICO charges, he or she must be “backed” by a “coordinated enterprise” that manages long-term frauds.

Lastly, a RICO case can only be successful if the scheme affects many people and the perpetrators knowingly seek to defraud.

Arguments For SEO Racketeering

To win RICO cases, plaintiffs must demonstrate patterns of criminal activity, within a 10-year period, which affect multiple parties. In this SEO RICO case, the claimant’s lawyers highlighted several factors to support their argument.

Duplicate Content

Plaintiff Argument

The lawsuit mentions duplicate content on Acme client websites. Why? Well, according to the claim, “[Acme] engaged in an ongoing fraud upon the Victim Firms by selling the same supposedly ‘unique’ blog content for posting on the firms’ web pages to several firms at the same time.”

Possible Defense

So-called “duplicate content” wasn’t always frowned upon and regularly used by SEOs. So, the defendant could argue that the duplicate content remnants were left alone for strategic purposes (i.e., the money spent eliminating all duplicate content would cost more than implementing new strategies).

Pattern of Corruption

Plaintiff Argument

Again, to meet RICO standards, plaintiffs must establish a “pattern of corruption.” Smith & Smith argued that the defendants knowingly entered into a “RICO scheme” that “was based in part upon a series of fraudulent representations about the defendant’s experience and skills in the use of what is known as Search Engine Optimization (‘SEO’).” In other words, Acme knew its SEO techniques were worthless but continued to sell its services using the “generic” materials mentioned earlier.

From the claim:

“The continued marketing by the Defendants of internet marketing services that the Defendants knew were worthless and knew were on misleading representations to unsuspecting clients, misled the clients into believing that the sheer number of links created would yield positive optimization results. This conduct represents a pattern of activity in violation of the RICO statutes.”

Possible Defense

The defense could attack this argument from several angles. First, just because artifacts of past SEO efforts still exist online doesn’t mean said artifacts are the only efforts associated with a given site. Plus, it’s not always possible to undo past SEO efforts – efforts that, at one time, worked.

And that is not all.

Websites that don’t follow Google’s guidelines sometimes perform well in SERPs. This raises a couple of key questions:

  1. Since not following guidelines worked for some sites, is it the responsibility of marketers to follow Google’s published suggestions, or should SEOs weigh the field and use techniques that work best for each client – even if that means using frowned upon methods?
  2. Are online marketers beholden to Google’s guidelines? In the lawsuit, the Plaintiffs insinuate that Acme is fraudulently hiding behind trade secrets. Yet, Google is the poster-child for trade secret protection. As such, if search engines don’t have to make algorithms public, how can SEOs be chastised for not revealing their SEO plans? Moreover, how are SEOs supposed to follow guidelines if the art of online marketing is imprecise and in some ways subjective?

Made Use of “Wires”

Plaintiff Argument

Smith & Smith argue that by using the Internet, email, and telephones to conduct business, Acme violated 18 U.S.C. § 1341 and 18 U.S.C. § 1343. Specifically, “The defendants use of the Internet, telephones and the U.S. Mail to promote their scheme [and] to negotiate contracts for their services and receive payment for them.”

Possible Defense

If the defense convincingly argues the other points, this will be moot.

Legalities To Consider In This SEO RICO Case

Trade Secrets

These days, information rules. Trade secrets are a vital vein of the online marketing industry. As such, Smith & Smith’s insinuation that Acme purposefully “[cloaked] their schemes in allegations of ‘trade secrets’ to avoid the balance of the scheme from coming to light” is (with all due respect) at worst, a reach, at best, naïve.

The Hope Diamond of search, Google, relies on trade secrets to maintain its spot as the #1 search engine. So, it would be the height of hypocrisy for courts to to protect Google’s trade secrets, but force SEO professionals to reveal theirs.

Hyperlinks & The Law

Inferring from the lawsuit, Smith & Smith probably hired a link expert to review its website, who came back with bad news: many of the links were low-quality; plus, fewer links existed than promised. When the law firm approached Acme about the situation, the latter supposedly “claimed that the process of building links, including where the links were to be found, was a trade secret.”

The Issue of Low-Quality Links

First, as discussed, low-quality links may still linger from past SEO efforts. Sometimes it’s just impossible to remove them. Furthermore, since Google keeps changing the rules, it’s debatable if low-quality links are wholly bad. Sure, Google recently introduced a new tool that allows webmasters to “disavow” unwanted backlinks. But who’s to say Acme hasn’t already tried to disavow Smith & Smith’s bad links, but Google hasn’t gotten around to their submission? Moreover, who is to say that Google won’t change their mind about the negative value of link farms? After all, the search engine giant has reversed algorithm decisions before.

The Issue of Link Tools

Second, the Plaintiffs argue that Acme delivered fewer links than promised, which raises the question: What link-identification tool did Smith & Smith use? Because different link report tools give different results.

Potential Ramifications

Thirdly, trade secrets rule the online marketing industry. Not to be dramatic, but if Acme is forced to reveal their link strategy, it could crush an entire segment of the online economy.

Essentially, the Plaintiff’s case can be summed up by one passage in the original filing: “The action is based on the fact that, at the time the Defendants were promoting this marketing scheme…they knew the techniques they proposed to use were in violation of the guidelines already well-established and published by Google.”

In this firm’s opinion, however, Smith & Smith’s argument is questionable. The mercurial nature of Google must be taken into consideration in this SEO RICO case.

And this case should serve as a warning to online marketers and SEO professionals: Manage your clients’ expectations and don’t make empty promises. Also, make sure your client contracts address the uncertain nature of search engine marketing.

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