A British Columbia Supreme Court judge has certified a class action against Apple over allegations that its search agreement with Google stifled competition and inflated advertising prices. The case was initially brought in 2021 by Spark Event Rentals Ltd., an event rental company based in British Columbia. The plaintiff alleged that Apple and Google conspired to limit competition in the search market, allowing Google to charge advertisers artificially inflated prices.
Apple argued that its agreement with Google was a legitimate distribution arrangement rather than an unlawful conspiracy. With Apple now the sole defendant after the plaintiff dropped Google following a dispute over an arbitration clause, Justice Thomas has allowed the case to proceed as a class action, finding sufficient grounds to examine whether Google's payments discouraged Apple from developing its own search engine. The lawsuit seeks financial compensation for advertisers who allegedly overpaid for Google search ads.
The class action covers Canadian residents who purchased search ads from Google since 2005, when Apple and Google first agreed to make Google the default search engine on Safari in exchange for a share of advertising revenue. Importantly, the ruling does not establish that Apple engaged in anticompetitive conduct, but simply allows the allegations to proceed as a class action. From the decision: The central proposition raised by these pleadings is that Apple could have used its resources and distribution network to enter the search engine market, but chose not to because Google paid Apple billions of dollars in revenue-share payments to make Google the default search provider on Apple products.
This arrangement gave Google market power, enabling it to charge supracompetitive advertising prices on search engines. In my view, this pleads a common purpose to perform an act prohibited by s 45 of the Competition Act, such that it is not "clear and obvious" that the plaintiff has not pleaded an agreement between Google and Apple not to compete in the search engine market. At one point in his decision, Justice Thomas cites Giannandrea's testimony and directly quotes Cue's from the US antitrust trial, before concluding that "this provides some basis in fact, supporting the inference that Apple did not compete with Google in the search engine market because of its Agreement with Google.".
Source: 9to5Mac · Summarized by HeadlinesBriefing