Google slapped with antitrust suit, accused of stagnating competition with Android MADA contracts
A class-action lawsuit filed against Google on Thursday claims the company used Android's Mobile Application Distribution Agreements (MADA) to extend an alleged monopoly over Internet and mobile search.
According to law firm Hagens Berman, who filed the suit in the U.S. District Court for the Northern District of California on behalf of two plaintiffs and Android handset owners, Google's MADA restrictions tamp down competition and thus inflate the cost of smartphones running the mobile operating system. In addition, the complaint says market competition would have improved search capabilities.
Google is accused of being in violation of both federal and state antitrust laws, including the Sherman Act, the Clayton Antitrust Act, California Cartwright Act and the California Unfair Competition Law.
"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 Hagens Berman founding partner Steve Berman. "Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this."
The suit specifically targets Google's "bundled" or built-in apps like YouTube and GooglePlay, saying MADA contracts force manufacturers to include them and their respective terms in an all-or-nothing fashion. These agreements are usually strictly confidential, but documents made public as part of 2012's Oracle v. Google patent and copyright trial give an idea of how strict Google's MADA polices are for the "open" Android OS.
As for the proposed class, the lawsuit seeks to represent all U.S. consumers who purchased any Android phone or tablet with which Google and the device manufacturer signed contracts to pre load apps from the Internet search giant's suite of proprietary titles. This includes MADA agreements. The suit is looking for damages to be awarded to consumers who purchased an Android device sold "at an artificially high price."
For its part, Google told Re/code, "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."
According to law firm Hagens Berman, who filed the suit in the U.S. District Court for the Northern District of California on behalf of two plaintiffs and Android handset owners, Google's MADA restrictions tamp down competition and thus inflate the cost of smartphones running the mobile operating system. In addition, the complaint says market competition would have improved search capabilities.
Google is accused of being in violation of both federal and state antitrust laws, including the Sherman Act, the Clayton Antitrust Act, California Cartwright Act and the California Unfair Competition Law.
"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 Hagens Berman founding partner Steve Berman. "Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this."
The suit specifically targets Google's "bundled" or built-in apps like YouTube and GooglePlay, saying MADA contracts force manufacturers to include them and their respective terms in an all-or-nothing fashion. These agreements are usually strictly confidential, but documents made public as part of 2012's Oracle v. Google patent and copyright trial give an idea of how strict Google's MADA polices are for the "open" Android OS.
As for the proposed class, the lawsuit seeks to represent all U.S. consumers who purchased any Android phone or tablet with which Google and the device manufacturer signed contracts to pre load apps from the Internet search giant's suite of proprietary titles. This includes MADA agreements. The suit is looking for damages to be awarded to consumers who purchased an Android device sold "at an artificially high price."
For its part, Google told Re/code, "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."
Comments
But but but but but but… Android is OPEN!
Not Google Android. . .
No, I think Google search (and Google Now) is superior to other options.
Yes, I think Google claiming Android is "open" just to restrict any useful apps to a separate licensing deal is disingenuous.
No, I don't see MADA as being anti-competitive.
Not so fast...you did notice that this 'bullshit' lawsuit has been filed by two phone companies? I wouldn't call that an idle threat.
That right there might be their only saving grace.
Two phone companies?
It sounds like they wanted certain apps but not others but that's the only way Google offers it to vendors so they are claiming they are being charged for apps they don't want. Boo-fucking-Hoo! I won't use Newsstand or GPRS on my iPhone but it comes with them so if I want an iPhone I have to accept them as part of the product.
Looks like it's two Android phone owners. There's nary a mention of any handset manufacturers complaining in the AI provided link to their source article.
http://www.hbsslaw.com/cases-and-investigations/cases/google
EDIT: Pip'd by Soli. 8-)
Judge: "phone manufacturer #1 why did you use the Android OS"
Phone manufacturer #1: "because we're too lazy and stupid to create our own"
Judge: "phone manufacturer #2 why did you use the Android OS"
Phone manufacturer #2: "same reason as #1"
You cannot use a monopoly ('dominant market position' is the more accurate term) in one market to establish a monopoly in another. That's what tripped up Microsoft and what is in play here. Whether the plaintiff lawyers have a credible case or not, I don't have enough info to hazard an opinion.
He read it wrong as did I
.
What monopoly? Android isn't a market and these apps are just on Android so it's not also not a market. And there is nothing keeping vendors from making their own Maps or video streaming apps that are preloaded on these devices. It would be like saying Apple has an iMessage monopoly they are abusing by not letting other OSes create iMessage apps.
What monopoly? Android isn't a market and these apps are just on Android so it's not also not a market. And there is nothing keeping vendors from making their own Maps or video streaming apps that are preloaded on these devices. It would be like saying Apple has an iMessage monopoly they are abusing by not letting other OSes create iMessage apps.
Search monopoly, tied to Google's other services.
I hate Android to the nth degree... that being said...
There are two handset makers, that want to use an OS (Android) that is developed and maintained by a separate company (Google) at no cost to the manufacturer, and the handset makers are b!tching that to use the FREE software, they have to install some apps that benefit the company that is doing all the work to make their handset actually useful? Really people?
No one is stopping them from creating their own phone OS and ecosystem! Oh wait, that would involve doing work!!
The world is full of whiners!
On a separate issue what strikes me is that how lame are bing and yahoo not to be able to improve their search. Lately google's results are far less relevant than they used to be before they shook things up, in order to make users click more on ads, and yet yahoo and bing are even worse than that.
Except alternatives are much easier to get.
Regardless of this lawsuit, its only a matter of time before Google has to change their strategy up. Mobile devices are gonna keep taking profits from them because most of us would rather pull of the yelp App instead of google where to eats. iAd will benefit that iOS users actually use their phone as a data device.
Not a fan of Google or Android, but...
What is limiting anyone from FORKING android, giving it a new name + new apps/media store and launching it on their own? I don't have a Kindle Fire, does it come bundled with YouTube, Google Play and the rest of the Google apps? How about the Nokia X? That was also a Fork of Jelly Bean.