New York: A US-based consumer rights class action law firm, Hagens Berman, has alleged that search engine giant Google has "illegally monopolised" and "financially stagnated" the US market for internet and mobile search.
The law firm has also filed a nationwide antitrust class action lawsuit against the California-headquartered Google.
"The lawsuit, filed in the US District Court for Northern District of California, alleges that Google`s monopoly of these markets stems from the company`s purchasing of Android mobile operating system (Android OS) to maintain and expand its monopoly by pre-loading its own suite of applications onto the devices by way of secret Mobile Application Distribution Agreements (MADA)," the firm said in a statement.
According to the suit, these agreements were hidden and marked to be viewed only by attorneys, it added.
When contacted, a Google spokesperson said: "Android and Google can be used independent of each other, meaning anyone can use Android without Google and anyone can use Google without Android.
"Since Android`s introduction, greater competition in the smartphone market has given consumers more and better choices."
The suit claims that the tech giant`s role in placing this suite of apps, including Google Play and YouTube 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," Hagens Berman Founding Partner Steve Berman said.
Berman, who is also the attorney representing consumers, further said: "Simply put, there is no lawful, pro-competitive reason for Google to condition licences to pre-load popular Google apps like this."
The more use an internet or mobile search engine gets, the better it performs based on that use, Berman said adding that instead of legitimately out-competing other internet and mobile search providers, Google decided to "choke-off" competition through this cynical, anti-consumer scheme.
"This comes down to a combination of Google`s power in the US general mobile search market and their power in the realm of tablet and smartphone manufacturers," he added.
As a result of the pricing conspiracy, everyone loses. Google and its competitors face an uncompetitive, stagnant market, and consumers are forced into one option, he said.
The lawsuit claims Google is in violation of a variety of federal and state antitrust laws, including the Sherman Act, the Clayton Antitrust Act, California Cartwright Act and California Unfair Competition Law.
The lawsuit claims Google`s MADAs (Mobile Application
Distribution Agreement) are contracts in restraint of trade that are designed to maintain and extend its monopolies in general search and handheld general search.
According to the complaint, in both situations, the owner`s phones should have cost less and had better search capabilities as the result of competition that would have ensued, had Google`s MADA restraints not existed, Hagens Berman said.
"The lawsuit seeks to represent all US purchasers of any Android OS mobile telephone or tablet as to which Google and the manufacturer of such device has entered into a contract or contracts, including the MADA, by which Google has conditioned the right to pre-load any application from a suite of Google applications on to manufacturer`s mandatory acceptance," it added.
The lawsuit seeks damages for individuals who have purchased these devices at an artificially high price due to Google`s alleged price-fixing, anticompetitive restrictions, the firm said in the statement.