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Ninth Circuit Won’t Restore Antitrust Suit Against Google, Apple Alleging Conspiracy
By a MetNews Staff Writer
A search-engine advertiser yesterday failed in its bid for restoration by the Ninth U.S. Circuit Court of Appeals of its antitrust action in which it claims that Apple and Google are engaged in a conspiracy to thwart competition.
California Crane School alleges that Google, headquartered in Santa Clara County’s City of Mountain View, is annually paying Apple, Inc, of the Silicon Valley, to stay out of the search business.
Contesting the dismissal of the action with prejudice by District Court Judge P. Casey Pitts of the Northern District of California who found no claims were validly stated, Crane argued on appeal that it did plausibly set forth valid bases for relief.
Recites Allegations
A brief recites numerous factual allegations, among which are these:
“•From 2005 up to and including the time of the filing of this complaint, Google paid Apple more than $50 billion to stay out of the search business and search advertising business….
“•Since 2005, Google has agreed to share billions of dollars of advertising revenue with Apple each year in consideration for Apple’s commitment not to compete in the search market and the search advertising market.”
It also alleges:
“•Google charges higher prices to advertisers than would otherwise be the case in the absence of the Google-Apple agreements.”
Crane points out that Google is the default search engine on Apple appliances.
Panel’s Opinion
In a memorandum opinion, Judges Daniel Aaron Bress, Morgan Christen, and Lawrence VanDyke said:
“Crane asserts that the public vertical agreement that sets Google as the default search engine on Apple’s browser is evidence of a secret horizontal conspiracy involving Apple’s promise not to compete with Google in the search business. But Crane failed to advance well-pleaded allegations suggesting direct evidence of any such secret agreement. The public vertical agreement between Apple and Google contains no non-compete provisions. Crane’s allegations that ‘Apple and Google have agreed in various writings, including in their written Revenue Sharing Agreement and in their written Pre-Installation Agreement that Apple would not compete...with Google’ are conclusory and therefore insufficient to plausibly plead the point.”
Crane argued in appeal that “written agreements were formed, confirmed, reconfirmed, and negotiated from time to time in private, secret, and clandestine personal meetings between the Chief Executive Officers and Chairmen of Apple and Google.”
The Ninth Circuit judges said the meetings “do not exceed the ordinary level of professional interaction expected of business executives.”
Apple Dropped Plans
The plaintiff contended:
“It was reported that as late as 2014 Apple had been working on its own search engine. However, Apple opted to receive the payment of billions of dollars from Google instead of competing with Google.”
Bress, Christen, and VanDyke responded:
“Crane alleges no details about Apple’s supposed efforts to build a search engine, how far the efforts progressed, when it abandoned them, or what drove it to abandon them. Instead, we agree with the district court that the equally (if not more) likely explanation for Apple’s decision not to enter the search engine market involves ‘the actual and opportunity costs of developing a search engine, [and] the difficulty of competing with existing search engines.’ ”
The case is California Crane School v. Google LLC., 24-4604.
On Tuesday, District Court Judge Amit Mehta of the District of Columbia, in holding that Google need not sell its browser, Chrome, upheld the arrangement with Apple, saying:
“Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products. Cutting off payments from Google almost certainly will impose substantial—in some cases, crippling—downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban.”
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