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Friday, May 02, 2014
Law Firm Files Antitrust Class-action Lawsuit Against Google

Consumer rights class-action law firm Hagens Berman has filed an antitrust class-action lawsuit against Google claiming the search engine giant "illegally monopolized, and financially and creatively stagnated the American market of internet and mobile search."

The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that Google's monopoly of these markets stems from the company's purchasing of Android mobile operating system (Android OS) 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 (MADA)." According to the suit, these agreements were hidden and marked to be viewed only by attorneys.

According to the suit, Google?s role in placing this suite of apps, including Google Play, and YouTube, among others, has hampered the market and kept the price of devices made by competing device manufactures like Samsung and HTC artificially high.

"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, attorney representing consumers and founding partner of Hagens Berman. "Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this."

The complaint claims that if device manufacturers bound by Google's distribution agreements were free to choose a default search engine other than Google, the overall quality of Internet search would improve.

"The more use an internet or mobile search engine gets, the better it performs based on that use," Berman said. "Instead of finding a way to legitimately out-compete other internet and mobile search providers, they instead decided to choke off competition through this cynical, anti-consumer scheme."

The complaint notes that Google's monopoly not only suppresses its competition but also keeps the company itself from improving.

According to the lawsuit, "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."

The lawsuit claims Google is in violation of a variety of federal and state antitrust laws, including the Sherman Act, the Clayton Antitrust Act, California Cartwright Act and California Unfair Competition Law.

Google said Android and Google can be used independent of each other. "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," Matt Kallman, a Google spokesman said.

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 S III mobile phone. According to the complaint, in both situations, the owner's phones should have cost less and had better search capabilities as the result of competition that would have ensued, had Google's MADA restraints not existed.

The lawsuit seeks to represent all U.S. purchasers of any Android OS mobile telephone or tablet as to which Google and the manufacturer of such device has entered into a contract or contracts, including the MADA, by which Google has conditioned the right to pre-load any application from a suite of Google applications on to manufacturer's mandatory acceptance.

The lawsuit seeks damages for individuals who have purchased these devices at an artificially high price due to Google?s alleged price-fixing, anticompetitive restrictions.

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