80 F. Supp. 3d 1019
N.D. Cal.2015Background
- Plaintiffs Feitelson and McKee, Android device owners, allege Google monopolistic restraints on Internet search through MADAs with OEMs.
- Google owns Android OS and Google Apps and licenses Android to OEMs for free but constrains pre-loading and default search settings under MADAs.
- MADAs require OEMs to preload Google Apps and set Google as default search, with prime screen placement, affecting distribution channels for search on Android devices.
- MADAs last two years and cover specific models; OEMs may pre-load other apps on non-covered models; Apple deals also involve Google as default search.
- Plaintiffs seek injunctive and monetary relief under Sherman Act, Clayton Act, and California Cartwright Act, alleging antitrust injury and exclusionary effects; court considers standing, injury, and market foreclosure statements.
- Court grants motion to dismiss First, Second, and Third Sherman Act COAs with leave to amend, and dismisses Fourth and Fifth Clayton/Cartwright COAs without leave to amend; Sixth UCL claim dismissed with leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust standing and injury for Sherman Act claims | Plaintiffs allege antitrust injury from loss of innovation and supracompetitive prices. | Injury is too remote or not in the market of restraint; no direct link to alleged conduct. | Plaintiffs fail to plead antitrust injury in the proper market; standing not established. |
| Exclusive dealing sufficiency against Sherman Act liability | MADAs foreclose competition in general and handheld search markets. | MADAs are short-term, easily terminable, with alternative channels; not clearly exclusionary. | Partial plausibility of foreclosure; but insufficient market linkage; leave to amend limited to causation and foreclosure specifics. |
| Clayton Act §3 and Cartwright Act §16727 viability | MADAs constitute valid commodity-based restraints under these Acts. | MADAs involve licenses for software, not tangible commodities; not within scope of these Acts. | Claims dismissed without leave to amend; software licenses not “commodities” under §3 and Cartwright Act. |
| Unfair Competition Law (UCL) viability | UCL claim should follow Sherman Act injury and foregone consumer harm. | UCL rises and falls with antitrust claims; California plaintiff requirement unresolved. | Grant of leave to amend UCL claim to address antitrust injury and California plaintiff deficiencies. |
Key Cases Cited
- Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519 (Supreme Court, 1983) (standing factors for antitrust injuries and procedural pleading guidance)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Supreme Court, 2007) (pleading standard requiring plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court, 2009) (clarified plausibility requirement in pleadings)
- Lorenzo v. Qualcomm, Inc., 603 F. Supp. 2d 1291 (S.D. Cal., 2009) (antitrust injury and standing; injury too remote in some consumer-harm theories)
- Tele Atlas N.V. v. Navteq Corp., 397 F. Supp. 2d 1184 (N.D. Cal., 2005) (commodities/technology licenses under Clayton Act context)
- Microsoft Corp. v. United States, 253 F.3d 34 (D.C. Cir., 2001) (exclusive dealing and foreclosure considerations in antitrust)