Hagens Berman, a consumer rights law firm, has filed a 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." Do they have a case?
The lawsuit accuses Google of creating secret "Mobile Application Distribution Agreements." Berman believes these agreements were hidden from the public, only available for view to the legal team, and that the secret agreements are key to the monopoly: "Google’s monopoly of these markets stems from the company’s purchasing of Android mobile operating system to maintain and expand its monopoly by pre-loading its own suite of applications onto the devices by way of secret [agreements]." Berman goes on to state that Google's role in making their own apps preloaded (such as Google Play and YouTube) hurt the market, artificially inflating prices for competitors Samsung and HTC.
Steven Berman, founding partner at Hagens Berman and the representative attorney, said, “It’s clear that Google has not achieved this monopoly through offering a better search engine, but through its strategic, anti-competitive placement [...] Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this.”
That argument sounds not unlike the the arguments used against Microsoft in the late 1990s, when they faced years of lawsuits over claims they illegally bundled Internet Explorer with the Windows operating system; although the circumstances — and the stakes — are quite different this time around.
The class is seeking a major pay out: It asks for damages for anyone who purchased the devices affected by the alleged Google monopoly — which would be basically all Android devices since Google bought Android in 2005.
A lawsuit of this size is incredibly ambitious. First, Berman must have their class certified, meaning they must prove that everyone they are seeking damages for has similar enough cases to be considered a cohesive unit. In the event they do prove this, Google can also file a motion to dismiss. Google certainly has the funds to fight a lawsuit like this. They will likely be in the dismissal process (and if necessary, an appeal process to that) for years before this case ever sees a jury. There is also the possibility of settlement, if a dismissal is not approved. However, given Google's power and size (and quite frankly, ego), they may prefer to fight the case and lose rather than settle.
In a statement to Reuters, Google said: "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."
This price competition may also be a key factor in the case. Google can try to make the size of the class smaller by arguing that Android prices were different based on mobile carrier, promotional offers, and the model of the device.
Regardless of the tactic used to fight the case, it'll be a long time before we see a resolution. On average, it takes about a year from the filing of a notice of appeal to get to the final deposition for all federal cases. Class action and antitrust suits take even longer, and this case is both. And years in the legal world are like decades in fast-developing tech world. By the time, this gets sorted out, the mobile market may have changed so much, we could all be using Windows phones.