Google slapped with antitrust suit, accused of stagnating competition with Android MADA contracts

A class-action lawsuit filed against Google on Thursday claims the company used Android's Mobile Application Distribution Agreements (MADA) to extend an alleged monopoly over Internet and mobile search.

According to law firm Hagens Berman, who filed the suit in the U.S. District Court for the Northern District of California on behalf of two plaintiffs and Android handset owners, Google's MADA restrictions tamp down competition and thus inflate the cost of smartphones running the mobile operating system. In addition, the complaint says market competition would have improved search capabilities.

Google is accused of being in violation of both federal and state antitrust laws, including the Sherman Act, the Clayton Antitrust Act, California Cartwright Act and the California Unfair Competition Law.

"It's clear that Google has not achieved this monopoly through offering a better search engine, but through its strategic, anti-competitive placement, and it doesn't take a forensic economist to see that this is evidence of market manipulation," said Hagens Berman founding partner Steve Berman. "Simply put, there is no lawful, pro-competitive reason for Google to condition licenses to pre-load popular Google apps like this."

The suit specifically targets Google's "bundled" or built-in apps like YouTube and GooglePlay, saying MADA contracts force manufacturers to include them and their respective terms in an all-or-nothing fashion. These agreements are usually strictly confidential, but documents made public as part of 2012's Oracle v. Google patent and copyright trial give an idea of how strict Google's MADA polices are for the "open" Android OS.

As for the proposed class, the lawsuit seeks to represent all U.S. consumers who purchased any Android phone or tablet with which Google and the device manufacturer signed contracts to pre load apps from the Internet search giant's suite of proprietary titles. This includes MADA agreements. The suit is looking for damages to be awarded to consumers who purchased an Android device sold "at an artificially high price."

For its part, Google told Re/code, "Anyone can use Android without Google and anyone can use Google without Android. Since Android's introduction, greater competition in smartphones has given consumers more choices at lower prices."