Lawsuit: Google plans rival to LendingTree
Aug 26, 2009 (The Charlotte Observer - McClatchy-Tribune Information Services via COMTEX) --
Charlotte-based LendingTree is suing one of its technology providers, saying the company broke a confidentiality agreement and could potentially share LendingTree's secrets with Google Inc.
The LendingTree Web site matches consumers with lenders who bid on providing mortgage, auto and other loans. It works with a Nebraska-based company called Mortech Inc., which provides LendingTree lenders with a "pricing engine" that helps them generate their loan offers. LendingTree says it routinely provides Mortech with confidential information about its customers and lenders.
According to a lawsuit filed this week in U.S. District Court, Mortech signed an agreement last November, at LendingTree's request, limiting its ability to sell its pricing engine services to other "online loan aggregators." LendingTree, in turn, "agreed to forgo various payments due to it." Since then, LendingTree has sought Mortech's advice on the development of new products -- something it wouldn't have done without the November agreement in place, LendingTree says.
LendingTree, without detailing how it got the information, says it recently learned that Google plans to launch a service very similar to LendingTree in late August or early September. LendingTree says it also found out that Mortech provided data for Google's beta test of the new product, and plans to make its pricing engine services available to Google.
LendingTree says that Mortech already broke the confidentiality agreement from November, and says it wants a judge to stop Mortech from continuing to do so. It also says that Mortech will "inevitably" disclose LendingTree's proprietary information to Google, including LendingTree's ideas for future products.
Calls to LendingTree's chief marketing officer weren't immediately returned on Wednesday. A Mortech spokeswoman said the company was unable to comment because of the pending litigation.
A Google spokeswoman declined to comment on the lawsuit, since Google isn't a party. But she did confirm that the company is working on "a small ad unit test that will run against a limited number of mortgage-related search queries."
"We're constantly looking for new ways to help people find what they are looking for on the Internet," she added. "... We have a number of experiments going on at any one time, but we don't speculate on future product development."
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