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A federal judge in California has thrown out an antitrust lawsuit seeking consumer class action status that accused Google of indirectly driving up smartphone prices and stifling innovation through anticompetitive behavior.
The lawsuit, filed in the U.S. District Court for the Northern District of California charged Google with forcing Android smartphone manufacturers to make Google’s search engine and applications the default option on their handsets.
The two named individuals who brought the lawsuit on behalf of other consumers claimed that Google’s distribution agreements with smartphone makers like Samsung and HTC made it very hard for other search engine companies and application vendors to get their products sold pre-installed on Android devices.
In the lawsuit, the two plaintiffs said that Android handset makers who wanted to pre-install popular Google applications such as YouTube and Play Store had to agree to make Google the default search engine on their devices. They also were required to pre-install Google’s entire suite of mobile applications and make those applications the default option.
Such requirements effectively shut out other application vendors thereby slowing innovation and making smartphones costlier overall for consumers, the lawsuit claimed.
But U.S. District Court Judge Beth Freeman rejected the arguments saying the consumers had failed to show the connection between the alleged higher prices of smartphone devices and Google’s Android agreements with smartphone makers.
For an antitrust claim to proceed, the plaintiff needs to show that unlawful conduct by the defendant caused specific injury to the plaintiff of the type that antitrust laws were designed to prevent.
By that definition, the plaintiffs in the case failed to show how they suffered any antitrust injury in the manner described by law, Judge Freeman wrote in a 19-page order granting Google’s motion to dismiss the claims.
“Plaintiffs have failed to allege that they have suffered ‘antitrust injury’ in the same market as and sufficiently close to the alleged anticompetitive conduct to allow them to pursue private antitrust remedies against Defendant,” the Judge said.
Judge Freeman however gave the plaintiffs time to amend some of their claims and resubmit the complaint within 21 days.
The California court ruling comes just days after Russian search engine company Yandex accused Google of similar anticompetitive practices for requiring Android phone makers to bundle its own applications as the default choice on their handsets.
In a complaint filed with the Russian Federal Antimonopoly Service, Yandex essentially echoed the same complaints against Google as the consumers in the California lawsuit.
In the Yandex case though, the company claimed that Google’s application bundling requirements had caused it to lose market share and pushed at least three smartphone makers to stop pre-installing Yandex software on their devices.
The lawsuits are a testament to the growing concerns that Google has raised in the recent times with its enormous and still-growing influence on the Internet.
In Europe especially, concerns over Google’s market power have spurred calls for a breakup of the Internet giant in much the same way that antitrust concerns resulted in a court-ordered split up of AT&T and the Bell System regional operating companies in the U.S. during 1980s.
The growing calls to unbundle Google’s search engine service from its other applications in Europe have caused the U.S. government to step in and warn against an unnecessary politicization of the issue. Apart from antitrust issues, Google is also battling privacy-related issues in Europe and elsewhere.