According to a new antitrust lawsuit that was filed yesterday, Google is said to be violating antitrust laws by maintaining an illegal monopoly — not only on Internet search but mobile search as well. This has supposedly affected the search market adversely while inflating the cost of devices of competing companies.
The lawsuit was filed in the US District Court for Northern California. It accuses the Mountain View company of using Android as a way to maintain the monopoly through secret agreements with device makers. These agreements require companies to load Google’s suite of apps onto their devices. Known as Mobile Application Distribution Agreements or MADAs, the agreements have been made with mostly all Android vendors. These agreements essentially help partners facing lawsuits of their own in funding, technical support and other assistance.
Remember that beef between Google and the European Union from over the summer? It still has not been solved and it does not look like it will be anytime soon. According to Reuters, Google’s latest offer of a settlement with the EU has been rejected. To make matters worse, Google has reportedly been told that they are running out of time to settle the matter and will have to face formal charges. Reuters says that “EU antitrust chief Joaquin Almunia rejected the internet search giant’s latest concessions on Friday and warned that it has only a short time left to make a satisfactory offer.” The issue at hand is that Google blocked search results containing competitors.
Google’s latest offer was revised by a group of 125 companies that the commission deemed their rivals for feedback. One of the components of the offer was to “allow rivals to display their logos and make their web links more prominent to users.” Unfortunately, it was not strong enough and Almunia stated to Reuters that “there is little time left, but the ball is still in Google’s court. But within a short time frame the ball will then be here (with the European Commission) and then it will be the moment to take decisions.” For the European Union, an end is planned for spring 2014.
In a move that would leave the United States mobile carrier market dominated by three carriers rather than four, Sprint could be soon buying out T-Mobile to set up a merger for the ages.
The company still hasn’t decided on the action it will take, but Sprint could post a bid in the first half of 2014, and the deal could be worth more than $20 billion.
Looks like Google might be in the hot seat again because competitors filed a new antitrust complaint against them in the EU alleging that the Android OS gives an unfair advantage for Google apps. The complaint was filed by Fairsearch Europe, which consists Microsoft, Nokia, and Oracle. Lead lawyer for Fairsearch said that Google is using Android “as a deceptive way to build advantages for key Google apps in 70 percent of the smartphones shipped today,” He is referring to the fact that Android OEM’s have a contractual obligation to place Google-branded apps such as Maps, YouTube, and Drive in “prominent default placement on the phone.”
Okay, so maybe they don’t openly sanction the merger, but it sure appears that way when you analyze it. The DOJ has let an important antitrust law waiting period expire, which opens the floor back up to the merger. The waiting period, which was required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, was enacted to control monopolies across various industries.
Of course, this is not the only Antitrust law in place to control monopolies, so the two powerhouses will still have a few hurdles to overcome before they can make the merger final. The next hurdle will be getting the Federal Communications Commission (FCC) to approve the transfer of spectrum licenses.
On the same day that Samsung received mixed news regarding the Apple v Samsung fight here in the U.S., the company announced they are dropping their requests for injunctions barring sales of Apple products in several European countries. In courtrooms in the U.K., Germany, France, Italy, and the Netherlands, Samsung is withdrawing requests for injunctions “in the interest of protecting consumer choice.” That statements sounds like Samsung has decided to start walking the walk and not just talking the talk when it comes to letting the market, and not the courts, decide which technologies will prevail with consumers.
Fresh off the recent approvals by both the US and European Commission for the Motorola acquisition, Google could very well face increased scrutiny over possible patent misuse. There are concerns that Google could use its upcoming received patents to possibly penalize rival companies. Google’s view on patent licensing is what has regulators worried. The Department of Justice antitrust division had this to say in a statement in comparison to both Apple and Microsoft, “Google’s commitments were more ambiguous and do not provide the same direct confirmation of its SEP [standard essential patent] licensing policies”
Looks like Google is looking out for numero uno while the AT&T and T-Mobile antitrust trail is taking place. Can you blame them? In an effort to keep and protect proprietary information from leaking out or getting into the hands of their competitors, they’ve filed a motion to forbid any disclosure regarding its plans for Android. The motion was filed by Google yesterday in hopes that a judge will grant their request in order to protect any possible release of confidential information. If this information were to leak out, it could be extremely harmful to Google’s business plans and strategy for the Android operating system.
Apparently, while conducting the antitrust investigation between AT&T and T-Mobile, Google supplied the DOJ with sensitive material and is now taking precautionary measures in keeping that information private. We can certainly think of a few companies off the top of our heads who would love to get their hands on information like that. However, Google is pretty adamant in ensuring that certain information is not revealed during the hearing. The proceedings were provoked when the DOJ stepped in last month and filed its own suit against the acquisition claiming that it will surely hinder competition. Only time will tell what happens as this begins to unfold. But one thing is for certain, Google is going to do whatever it takes to ensure its secrets stay secret. Feel free to leave your thoughts in the comments below.
AT&T has been hard at work to make sure their pending T-Mobile acquisition doesn’t fall through. Sources close to the situation say that AT&T is working on a “two-track plan” to address concerns raised in the recent complaint filed by U.S. antitrust regulators.
While the specifics of the plan can’t be confirmed, AT&T is said to be preparing itself to make concessions in an effort to ease the federal fears that the merger will reduce competition and raise wireless cost. Among the concessions being considered are the sale of T-Mobile assets and the possible retention of T-Mobile value-orientated rate plans.
Some sources say that to make the deal work, AT&T may have to sell nearly 25% of T-Mobile’s network and customer base. While the regional assets will likely be sought after by smaller carriers looking to grow out their coverage, the national assets have fewer potential buyers.
Two main possibilities are Sprint and Verizon, but that may not happen anytime soon, as an acquisition like that would raise antitrust scrutiny of its own.
AT&T has a lot on the line as they would have to shell out $6 Billion in compensatory fees to T-Mobile’s parent company, Deutsche Telekom, if the deal falls through. Some sources say that AT&T is feeling confident about their new solution. With $6 billion on the line, I hope for their sake that they are right.
Apparently the U.S. government is not in agreement with the AT&T purchase of T-Mobile as it has filed court papers in Washington to block the $39 billion merger. According to the U.S. government is would “substantially lessen competition” in the wireless market.
The U.S. is seeking a declaration that AT&T’s takeover of T-Mobile would violate U.S antitrust law which would result in a court order blocking the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.