Monday, February 23, 2015 - A group of lawsuits filed and consolidated into multidistrict litigation against Google concerning its Android operating system were dismissed by a federal judge on February 20. The plaintiffs had claimed that Google had violated antitrust laws by forcing manufacturers to allow its own programs to exist as defaults on Android mobile devices. The court ruled that the allegations failed to show how this strategy by Google directly affected and inflated the cost of the mobile devices as the lawsuits claimed.
Plaintiffs in the case argued that space on the mobile device home screens, which they refer to as "prime screen real estate," was taken up by Google applications before other options were made available to a device owner on a level playing field. Google allegedly violated antitrust laws by influencing mobile device manufacturers to favor Android applications as defaults.
This default implementation allegedly provided an illegal advantage for Google over competitors‘ applications, stifling competition and allowing them to raise their phone prices above market value. The claims also centered on the assertions that Google did not only favor their own applications on the phone, but at the same time restricted the ease with which applications from competing companies such as Microsoft could become incorporated into the user experience.
There were also claims that Google went straight to manufacturers such as Samsung and instructed them to set their company‘s applications as the default offerings, which stifled competition and allowed Google to raise the prices of their mobile devices. Software from companies such as Microsoft would not only be moved back in line behind Google‘s applications, but many of their offerings including the Bing search engine would become redundant to implement alongside the Google search engine already installed on the phone. These kind of anticompetitive scenarios were the seeds from which the lawsuits against Google first grew.
U.S. District Judge Beth Labson Freeman ruled against the plaintiffs, finding that their argument failed to show that the actions taken by Google relating to their application placement and default implementation contributed directly to a raise in the prices of their handset devices. Though their applications‘ behavior in the phone may influence a user to interact with their software more readily than those not given a featured spot, that aspect alone did not directly lead to an artificial inflation of the price of the handset device.
The restrictive contracts with manufacturers that Google employed to feature their own applications remained a touchstone and will likely be referenced in future antitrust cases involving Google and its Android operating system. The judge did not rule that anticompetitive measures were not taking place, but instead that the means by which those anticompetitive activities would have been implemented were not validated by Google‘s behavior concerning the default applications.
The anticompetitive claims are not dead however. Though the plaintiff‘s specific arguments were dismissed, the judge did allow the possibility for plaintiffs to amend their claims pertaining to the Sherman Act over the next three weeks and have their case heard again. They are not alone in their ambitions for competitive suppression litigation either, as Google is facing antitrust lawsuits brought by the European Parliament.