The suit, filed in California federal court in May by two smartphone
consumers, said Google requires handset manufacturers such as
Samsung Electronics Co Ltd <005930.KS> to restrict competing apps
like Microsoft's Bing search on Android phones, partly by making
Google's own apps the default.
Google argued last week the proposed class action should be
dismissed because consumers still are free to use the other apps.
The plaintiffs counter that most consumers either don't know how to
switch default settings, or will not go to the trouble.
If a judge lets the lawsuit proceed, plaintiffs' attorneys would be
allowed to delve into internal Google emails and contracts with
smartphone companies, and could interview Google executives under
oath, said Steve Berman, who represents the consumers.
"I'm confident we will get into juicy stuff, and I think that will
up the pressure on Google as some of the material we discover
becomes public," he said.
Google declined to comment. A hearing on Google's bid to dismiss the
case is scheduled for October.
Any damaging evidence from the class action would play into the
hands of Google's rivals. Microsoft spokesman Jack Evans said the
company "is not a party" to the consumer lawsuit, but last year a
group of companies - including Microsoft <MSFT.O>, Oracle <ORCL.N>,
Nokia <NOK1V.HE>, Expedia <EXPE.O> and TripAdvisor <TRIP.O> - filed
a complaint with European antitrust regulators over some of the same
issues in the U.S. lawsuit.
Google apps "are widely used on Android by requiring default
placement and other mechanisms for disadvantaging competing apps,"
the companies said in a summary of their complaint.
Google last year said it was working cooperatively with European
regulators, who have yet to decide whether to formally investigate.
Berman has a long history of taking on large U.S. companies. He
reached a settlement for consumers suing Apple over its
e-book sales practices that could reach $450 million, and settled
for $1.6 billion a lawsuit on behalf of Toyota car owners
with unintended acceleration claims.
But the Seattle-based plaintiffs' lawyer also has represented one of
Google's main rivals. Berman defended Microsoft when it faced its
own antitrust investigations over Windows. Berman said he has had
"conversations with Microsoft over the years about Google's
conduct," but not about this lawsuit.
No stranger to antitrust inquiries, Google was scrutinized by U.S.
and European regulators over allegations that it improperly
manipulated search results to rank its own services higher than
[to top of second column]
U.S. authorities ultimately closed their investigation without
filing a lawsuit, and Europe's competition commissioner negotiated a
settlement earlier this year which is awaiting approval by the
broader European Commission.
PRIME REAL ESTATE
The main issue for U.S. courts will be whether Android and mobile
services like search are "technically separate, or tied in ways that
impedes competition for consumers," said Michael Cusumano, a
professor at the MIT Sloan School of Management.
Cusumano has extensively researched Microsoft, which unsuccessfully
sued the professor in the 1990s for access to his notes. This year
Microsoft has sought to hire him to write an expert opinion in an
The U.S. consumer lawsuit is based largely on contracts between
Google and Android manufacturers Samsung and HTC <2498.TW> that
became public during Oracle's separate 2012 trial against Google.
If Samsung or HTC wishes to use Google apps on its phones, the
consumer lawsuit said, they must preload a suite of services -
including YouTube and Maps - on "prime screen real estate" on the
phones, and set Google search as the default.
It also argues that Google's deal with Apple to be the default
search on iPhones and iPads locks out competitors across the mobile
universe. Apple does not have its own search engine, has lower
market share worldwide than Android and is not a defendant in the
Google's deals with handset makers do not prevent rival search
engines "from reaching consumers through the various distribution
channels available to them," Google wrote in its motion to dismiss
the U.S. lawsuit.
Cusumano said the U.S. class action could hurt Google if a judge
finds that it improperly pushes its mapping and location services,
which is embedded across the Android system.
It's "kind of a Pandora's Box to look inside what Google does, and
the relationship it has with all these smartphone and handset
manufacturers," he said.
(Additional reporting by Bill Rigby in Seattle; Editing by Howard
[© 2014 Thomson Reuters. All rights
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed.