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Class Action Lawsuit Against Google Thrown Out

Google-GavelIf Google requires mobile device makers to use it as their default search engine, does it have an unfair monopoly on the market? The answer is no, according to a decision last week by a US District Court judge.

Or rather—to be more accurate–the judge decided there’s no proof the search engine’s practices have caused harm.

What’s in a MADA?

The case started with Google’s MADA, or Mobile Application Distribution Agreement. This is the set of terms and conditions it requires of hardware manufacturers making devices that use the Android operating system. Within the fine print of the MADA is a clause requiring that all devices set Google as the default search engine; its competitors didn’t feel that was fair.

The reasons that the plaintiffs gave were twofold:

  • Driving up prices. The lawsuit points out that if manufacturers could choose their own default search engine, they’d likely sell off the privilege to the highest bidder. Google, Bing, Yahoo and others would be willing to pay to get the added traffic (and ad revenue) that comes with the position. Since manufacturers are deprived of this potential income, they have to charge more for devices and that cost is ultimately passed onto consumers.
  • Harm to the market. A major point raised by the lawsuit is that search engines depend on queries to improve their ability to deliver useful information. More searchers means more chances for the algorithm to improve. Since Google is essentially denying a share of traffic to its competitors, those search engines cannot improve as much as they otherwise would; the result is less competition and more stagnation of the market overall. In other words, Google’s pride of place discourages the progress of the search engine industry.

Burden of Proof

The lawsuit never got far enough for the parties to duke out the fairness or unfairness of Google’s MADA. Instead, the judge tossed out the case based simply on a lack of evidence. The two points raised above are sound in theory, but apparently hard to prove.

Specifically, there’s no clear connection—at least in the case as presented—between Google’s requirements and any real consumer harm. (Or, for that matter, any quantifiable damages to competitors.) In other words the case was tossed on a sort of big-picture habeas corpus requirement.

That doesn’t mean the plaintiffs can’t try again. They now have the chance to modify their claims of damages and resubmit the suit, though it’s doubtful whether they can bring forward any new evidence that wasn’t included in the original documentation. It doesn’t help that users on most devices can change search engines rather than staying with the default, a fact that doesn’t directly nullify the anti-trust claims but makes them seem much more trivial.

Does this mean default search engine agreements are in the clear? Not exactly. The case is by no means a win for Google, and sets no precedent that these kinds of agreements are legal. Given the high value of a contract to make Android devices, it’s clear that manufacturers are under pressure to cater to Google’s desires whether they improve the device or not. Expect the issue to be tested in courts again as the device market struggles to get out of the shadow of giants like Apple and Google.