Class Action Lawsuit Accuses Google of Android Search Monopoly

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On Thursday, Google Inc. was slapped with a class action lawsuit accusing the company of violating antitrust laws by making its search engine the default on Android smartphones, which allegedly drives up the prices on the devices and harms consumers.

According to the Google class action lawsuit, the Internet giant stifles competition by allowing the manufacturers of Android devices to pre-load popular applications, including Google Play and YouTube.

“Google … has long been a monopolist in the overall U.S. market for general Internet search,” the class action lawsuit says. “Google is the Internet’s most powerful tool, 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 class action lawsuit goes on to say that Google recognized the growing market for Internet searches performed on smartphones and tablets. Seeking to capitalize on the market, Google purchased the Android OS in 2005 and built a sizable U.S. user base by giving the system away for free.

“But Android itself only enables the basic functionality of a handheld device; what brings mobile phones and tablets to life are applications,” the Google class action lawsuit says. Google owns some of the most popular applications for handheld devices, including YouTube and Google Play, Google’s app store.

According to the class action lawsuit, Google allegedly entered into secret Mobile Application Distribution Agreements (MADAs) that allowed the manufacturers of Android OS devices to preload Google apps, “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 Google holds tremendous power for in the U.S. market for Internet search, Google has “unrivaled market power” over the manufacturers of smartphones and tablets. The class action lawsuit points to StatCounter data indicating that, as of March 2014, Google’s handheld search engine share was nearly 87 percent.

Google’s MADAs are allegedly designed to maintain the company’s monopoly on Internet search. “Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load Google apps on making its search product the default search engine on covered devices,” the Google class action lawsuit says.

Further, the class action lawsuit alleges Google is aware that most consumers do not know how to change the default search engine on their handheld devices, ensuring that the majority of Android users will continue to use Google’s search engine instead of its competitors’ search engines. Therefore, the default engine status increases Google’s ability to enjoy an increased amount of revenue from search-related advertisements. Google reportedly experienced revenues of more than $55 billion and profits of more than $10 billion in 2013.

The Google antitrust class action lawsuit alleges violations of the Sherman Act, the Clayton Act, California’s Cartwright Act and California’s Unfair Competition Act. The plaintiffs seek an injunction that will prohibit Google from continuing to force device manufacturers into MADAs, as well as monetary relief for the amount consumers overpaid for their Android devices as a result of Google’s allegedly anticompetitive behavior.

The plaintiffs are represented by Jeff D. Friedman, Steve W. Berman, George W. Sampson and Robert F. Lopez of Hagens Berman Sobol Shapiro LLP.

The Google Android Antitrust Class Action Lawsuit is Feitelson, et al. v. Google Inc., Case No. 5:14-cv-02007, in the U.S. District Court for the Northern District of California.