Android “Default Search” Class Action Against Google Tossed By Judge
Plaintiffs had failed to show connection between "MADAs" and consumer harm.
Last week, Russian search engine Yandex filed a formal complaint against Google in its home market, arguing that Google was using its control over Android and market power to ensure a privileged position for its apps on Android homescreens and handsets. In the U.S., a similar argument was made in the context of a would-be class action lawsuit filed in May 2014.
At the time, I argued that damages or “consumer harm” would be extremely difficult for plaintiffs to show in the case. Indeed, that seems to be the core of U.S. District Judge Beth Labson Freeman’s decision to dismiss the action. While unlikely to survive, the case isn’t completely dead. Plaintiffs were given the opportunity amend their complaint on damages and some of the other claims made.
When it closed its antitrust case against Google, U.S. FTC decided not to pursue any action against on the same Android “default search” issue. Google has an 84 percent mobile search market share in the U.S., according to StatCounter.
The plaintiffs had argued that Google’s Mobile Application Distribution Agreement (MADA) agreements with hardware makers ultimately result in higher prices paid by consumers for Android smartphones and tablets:
If device manufacturers bound by Google’s distribution agreements were free to choose a default search engine other than Google, the quality of Internet search overall would improve because search engines become more effective as they process more and more search queries. With default search engine status providing access to more searches, Google’s competitors in search would become more effective as they processed more queries, and this competition would push Google to improve as well. Also, if Google’s rivals were allowed to compete for default status, they would do so in part by offering to pay device manufacturers for that status on various Android smartphones and tablets. 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.
According to The Recorder, the judge found the connection between “default search” status on Android devices and consumer harm to be too tenuous or speculative. There was also no showing that consumers couldn’t simply switch to another search engine. And there was no evidence offered that innovation in the market was being negatively affected.
Below is a copy of the plaintiffs’ original complaint.