Google is Being Sued in the US - but Why?

 
on May 02 2014 4:55 AM
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Internet giant Google is being sued in the US for allegedly monopolising the internet and mobile search market.

The company, which is in fierce competition with Yahoo and others for the search market, is also accused of taking undue advantage of its Android mobile operating system. Consumer rights class-action law firm Hagens Berman filed a lawsuit in the US District Court for the Northern District of California, alleging that Google "illegally monopolised, and financially and creatively stagnated the American market of internet and mobile search".

The lawsuit claims that Google expanded its "monopoly" by pre-loading its own suite of applications in the Android OS by way of secret Mobile Application Distribution Agreements (MADA) with mobile device manufacturers.

The agreements were claimed to be hidden and marked to be viewed only by attorneys. Google has placed a suite of apps in the Android OS by default, including Google Play, and YouTube, among others. The lawsuit alleges this 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 also noted that the overall quality of mobile internet search would improve if manufacturers were allowed to use search engines other than Google.

In addition, the lawsuit claims that Google's MADAs are contracts in restraint of trade and the company is in violation of various federal and state antitrust laws including the Sherman Act, the Clayton Antitrust Act, the California Cartwright Act and the California Unfair Competition Law.

The lawsuit seeks damages for individuals who have purchased these devices at an artificially high price due to Google's alleged price-fixing and anticompetitive restrictions. Google, however, refuted the claims saying 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, told Reuters.

By Jerin Mathew, International Business Times UK

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