April 6, 2015
Plaintiffs Daniel McKee and Gary Feitelson withdrew their lawsuit against search giant Google on April 3. The plaintiffs argued that Google was engaging in unfair competition through the design of its Android smart phone operating system. By requiring hardware manufacturers that use the Android operating system to favor Google online content properties like Youtube and not loading competing search engine apps like Microsoft’s Bing, Google was engaged in unfair competition.
Plaintiffs Feitelson and McKee argued that such practices have the effect of driving prices higher. How? Since there is less competition for price mobile advertising real estate on the Android OS, this leads to monopolized pricing which could increase competition. This is a standard abuse of monopoly allegation. Since Google owned the Android OS platform and was featuring its own apps on prime OS real estate, the plaintiff’s alleged the lack of competition would lead to higher prices.
However, back in February, the US Federal District court in San Jose, presided over by Judge Beth Labson Freeman, tossed out the plaintiffs’ case but gave them the opportunity to amend their claim.
Google’s argument all along was that the debut of Google Android had reduced the price of smart phones. Indeed, in terms of hardware, this argument is spot on. The huge influx of Android phones in the smart phone market has turned certain segments of that market into a race to the bottom. However, there is a difference between the competition for consumers of handsets (iOS versus Android) and advertisers on the Android platform. Regardless, this is a moot issue since the plaintiffs withdrew their case. (Street Wise Journal)