updated 09:13 am EDT, Fri May 2, 2014
Class action suit seeks recompense for artificially high device prices
A nationwide antitrust class-action suit has been filed against Google, filed by consumer rights lawfirm Hagens Berman. It claims that Google is monopolizing the Internet search market on mobile by pre-loading Google apps onto Android mobile devices, as mandated through Mobile Application Distribution Agreements (MADA).
The MADA and its requirements came into prominence during the most recent chapter of the Apple versus Samsung smartphone patent trial. The agreement covers device manufacturer behavior, what it can expect from Google in the way of support, as well as what developers of Android devices must do in order to keep using the mobile OS, including pre-install Google apps and services -- requirements some critics have argued makes Android less "open" than it initially seems.
The named plaintiffs include Gary Feitelson, a resident of Louisville, Kentucky and owner of an HTC EVO 3D mobile phone; and Daniel McKee, a resident of Des Moines, Iowa and owner of a Samsung Galaxy SIII. According to the complaint, in both situations, the owner's phones would have cost less and had better search capabilities as the result of competition that would have ensued, had Google's MADA restraints not existed.
"It's clear that Google has not achieved this monopoly through offering a better search engine, but through its strategic, anti-competitive placement, and it doesn't take a forensic economist to see that this is evidence of market manipulation," said Steve Berman of Hagens Berman, a lawyer representing the plaintiffs. "Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this."
"This comes down to a combination of Google's power in the US general mobile search market and their power in the realm of tablet and smartphone manufacturers," Berman added. "As a result of the pricing conspiracy, everyone loses. Google and its competitors face an uncompetitive, stagnant market, and consumers are forced into one option."
In response to the lawsuit, Google claims that "anyone can use Android without Google, and anyone can use Google without Android. Since Android's introduction, greater competition in smartphones has given consumers more choices at lower prices." It is unclear what effect devices like Amazon's Kindle Fire HD series tablets will have on the trial, given that they are heavily-forked versions of Android that do not always use Google services.
The lawsuit seeks damages for individuals who have purchased these devices at an artificially high price due to Google's alleged price-fixing, anti-competitive restrictions.