SAN JOSE, Calif. (Legal Newsline) - Two men have filed a class action lawsuit against Google, claiming it has monopolized Internet and mobile searches in the United States.
The lawsuit alleges that Google's monopoly of the United States' market for Internet and mobile searches stems from the company's purchasing of Android mobile operating system to maintain and expand its monopoly by pre-loading its own suite of applications onto the devices by way of secret Mobile Application Distribution Agreements.
Gary Feitelson, a Kentucky resident, and Daniel McKee, an Iowa resident, claim a Google search is the Internet's most powerful took and "to Google" has become synonymous with searching the Internet.
"Internet search has made Google the largest, and the most profitable, web-centric company in America," the complaint states.
Google is also a monopolist in the large and fast-growing American market for mobile and tablet general Internet search, but Google's maintenance and expansion of its monopoly in handheld general search and, by extension, general search, is not merely a function of having built a better search engine, according to a complaint filed May 1 in the U.S. District Court for the Northern District of California.
The plaintiffs claim instead, Google has found a way to use its Android mobile operating system to maintain and expand its monopoly in both of these U.S. markets.
"Having recognized that personal computing was moving away from the desktop and that Internet searches increasingly are being done on smartphones and tablets, Google purchased the Android OS in 2005," the complaint states. "By giving away the Android OS itself for free, Google rapidly built an enormous user base in the United States."
The plaintiffs claim Google, by way of secret Mobile Application Distribution Agreements, allows Android OS device manufactures to pre-load a suite of Google apps, including YouTube and Google Pay, onto a phone or tablet, but only if the manufacturer pre-loads onto prime screen real estate all of the apps in the suite, whether the manufacturer wants them or not.
"Because consumers want access to Google's products, and due to Google's power in the U.S. market for general handheld search, Google has unrivaled market power over smartphone and table manufacturers," the complaint states.
If device manufacturers bound by Google's distribution agreements were free to choose a default search engine other than Google, the quality of Internet searches overall would improve because search engines become more effective as they process more and more search queries, according to the suit.
"Also, if Google's rivals were allowed to compete for default status, they would do so in part by offering to pay device manufactures for that status on various Android smartphones and tablets," the complaint states. "Such payments to device manufacturers, maximized by way of competitive bidding, would lower the bottom-line cost associated with production of the covered devices, which in turn would lead to lower consumer prices for smartphones and tablets."
Google's MADAs are contracts in restraint of trade that are designed to maintain and extend its monopolies in general search and handheld general search, according to the suit.
The plaintiffs claim there is no lawful pro-competitive reason for Google to condition licenses to pre-load popular Google apps.
"By insisting on these contracts with device manufacturers, to the detriment of competition and consumers, Google has violated the Sherman Act, the Clayton Act, California's Cartwright Act and California's Unfair Competition Act," the complaint states.
The plaintiffs claim as of March, StatCounter reports that Google's U.S. handheld general search engine share was at 86.82 percent. Yahoo!'s share was at 7.64 percent and Bing's share was at 5.16 percent. Ask Jeeves, Webcrawler and others were all at less than one percent total.
Feitelson and McKee are seeking that the court certify the case as a class action; that the court award them and the proposed classes all appropriate relief; and that the court grant such additional orders or judgments as may be necessary to prevent unlawful practices. They are being represented by Jeff D. Friedman, Steve W. Berman, George W. Sampson and Robert F. Lopez of Hagens Berman Sobol Shapiro LLP.
The case has been assigned to District Judge Beth Labson Freeman.
U.S. District Court for the Northern District of California case number: 5:14-cv-02007
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