Users struggled to prove harms from Google’s default search deal with Apple.
While the world awaits closing arguments later this year in the US government’s antitrust case over Google’s search dominance, a California judge has dismissed a lawsuit from 26 Google users who claimed that Google’s default search agreement with Apple violates antitrust law and has ruined everyone’s search results.
Users had argued that Google struck a deal making its search engine the default on Apple’s Safari web browser specifically to keep Apple from competing in the general search market. These payments to Apple, users alleged, have “stunted innovation” and “deprived” users of “quality, service, and privacy that they otherwise would have enjoyed but for Google’s anticompetitive conduct.” They also allege that it created a world where users have fewer choices, enabling Google to prefer its own advertisers, which users said caused an “annoying and damaging distortion” of search results.
In an order granting the tech companies’ motion to dismiss, US District Judge Rita Lin said that users did not present enough evidence to support claims for relief. Lin dismissed some claims with prejudice but gave leave to amend others, allowing users another chance to keep their case—now twice-dismissed—at least partially alive.
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Under Lin’s order, users will not be able to amend claims that Google and Apple executives allegedly sealed the default search deal on the condition that Apple would not create its own general search engine through “private, secret, and clandestine personal meetings.” Because plaintiffs showed no evidence pinpointing exactly when Apple allegedly agreed to stay out of the general search market, these meetings, Lin reasoned, could just as easily indicate “rational, legal business behavior,” rather than an “illegal conspiracy.”
Users attempted to argue that Google and Apple intentionally hid these facts from the public, but Lin wrote that their “conclusory and vague allegations that defendants ‘secretly conducted meetings’ and ‘engaged in conduct to obfuscate internal communications’ are plainly insufficient.”
Sharing bystander photos documenting Google’s Sundar Pichai and Apple’s Tim Cook meeting at a restaurant with a manila folder tucked under Pichai’s elbow did not help users’ case. Lin was also not moved by users demonstrating that Google has a history of destroying evidence, because “they put forth no specific factual allegations that defendants did so in this case.”
However, users will have 30 days to amend currently “inadequately” alleged claims that “Google’s exclusive default agreement, under which Apple set Google as the default search engine for its Safari web browser, foreclosed competition in the general search services market in the United States,” Lin wrote. If users miss that deadline, the case will be tossed with no opportunities to further amend claims.
Users “parrot” DOJ’s case against Google
So far, users have only alleged that Google’s 90 percent share of the US general search services market is proof that “exclusive default agreements substantially foreclosed competition.” Lin suggested that users could strengthen their arguments by showing how Google’s dominance is directly linked to exclusive default agreements that foreclosed competition.
Users may be able to track down more evidence. At a hearing, users’ legal counsel told Lin that they could allege more facts supporting a plausible inference that the default deal led to substantial foreclosure of competition in general search.
Until users shore up this argument, Lin said that they have failed to demonstrate any of the antitrust injuries alleged, which plaintiffs claimed require public relief because they impact “all users of search.” This includes an array of harms plaintiffs allege arise from Google subjecting users to an “inferior search experience” that, despite being free, can come at a cost to some users. As one example, some plaintiffs claimed that they’ve been stuck with additional business expenses due to Google’s alleged preferencing of its advertising partners in search results.
In their motion to dismiss, tech companies told Lin that users had “no antitrust standing” and have not yet explained “how the ‘prices’ for using Google’s free search engine should be lower, how Apple’s alleged agreement not to refrain from building a search engine diminished innovation and privacy practices in the industry, or even from what relevant market plaintiffs’ alleged injuries flowed.”
They also criticized users’ alleged attempts to “parrot” arguments advanced by the US Department of Justice in its antitrust case. In their most recent complaint, users quoted the judge in that case, Amit Mehta, who said that Google and Apple’s default search deal was “arguably a form of exclusivity” preventing rivals from competing.Advertisement
To ultimately succeed, users would have to show evidence that Google’s alleged conduct in these deals blocked competitors. Since users have so far insufficiently argued that Google’s deal stopped Apple from competing, tech companies argued that any amendment to their complaint would be “futile.”
“Plaintiffs cannot establish antitrust injury by simply wishing that Apple would launch products,” the motion to dismiss said.
The DOJ’s antitrust hearing, however, suggested that there may be evidence that Apple was planning to launch a search engine but chose to keep the Google deal instead.
Lin did not completely agree with Google and Apple that users had no hopes of salvaging their suit. Because “it is conceivable that plaintiffs could cure” defects in arguments alleging harms, Lin also granted users another opportunity to allege specific facts entitling them to relief from alleged harms.
The ideal outcome to users suing would be for Google and Apple’s deal to be deemed illegal, with Lin ordering both companies to end the deal, disgorge profits, including interest, and compensate users for alleged damages.
Google and Apple have argued that even with sufficient facts, it may not be possible to “determine the damages from reduced search-quality experience” allegedly owed to all Google search users.
“Apportioning the proper share to plaintiffs versus other search engine users would pose innumerable complex proof issues, including, for example, quantifying supposedly ‘distorted’ search results and the extent to which those results supposedly injured each of the plaintiffs,” the motion to dismiss said, criticizing users as pleading “no facts whatsoever to establish that plaintiffs could even quantify such damages, much less properly apportion them.”
