Google, Apple, and some of their current and former executives have hit back at allegations that they conspired to monopolize the online search engine market in a flurry of motions filed late last week. Their jointly filed motion to dismiss argues that the plaintiff “overreaches at every step,” and its claims fall short for lack of standing and for failure to state a claim.
The class action, filed in the closing days of last year by a California-based school that trains people to operate cranes, argued that Google has paid Apple more than $50 billion in exchange for its agreement to stay out of the online search engine business. According to the complaint, the companies and certain executives orchestrated a horizontal agreement pursuant to which Apple bowed to Google’s domination in exchange for cash as well as agreed to set Google as the default search provider in its Safari web browser.
The complaint states two claims for relief: agreement not to compete in the search business in violation of Section 1 of the Sherman Act and conspiracy to monopolize the market in violation of Section 2 of the same.
Last week, the defendants responded with several motions, including a motion to compel arbitration by Google and two motions to stay discovery pending resolution of the arbitration and/or dismissal bids.
In their motion to dismiss, Google and Apple argue that the plaintiff misconstrues their vertical business relationship as an illegal horizontal conspiracy. Further, they contend that the underlying agreements are not secretive, but actually a matter of public record. “Stripped of its repetitive conclusory assertions of conspiracy, the Complaint contains nothing more than a recitation of benign, public facts that do not show an unlawful conspiracy as a matter of law,” the motion says.
Regarding standing, the defendants aver that the plaintiff failed to demonstrate antitrust injury, which in this case is inflated prices paid to place search advertising on Google. Google and Apple skewer the plaintiff’s “far-fetched non-compete agreement” theory by arguing that it “requires at least five speculative steps to even loosely connect the dots between the challenged restraint and the injury claimed.”
The companies advise that “[t]his is precisely the kind of case that the Supreme Court warned would require the rigorous enforcement of Rule 12’s pleading requirements” in asking for dismissal with prejudice.
The plaintiff and putative class are represented by Alioto Law Firm and Law Offices of Lawrence G. Papale, among others. Google and its executives are represented by Williams & Connolly LLP and Apple and Tim Cook by Skadden, Arps, Slate, Meagher & Flom LLP.
