Google, Apple Say Search Deal ‘Benign,’ Not Anti-Competitive

 Google and Apple asked a California federal court Friday to toss a proposed class action claiming a longtime deal to make Google Search the default on Apple’s Safari browser is an anti-competitive payoff intended to dissuade Apple from producing its own search engine.

California Crane School Inc.’s late December 2021 complaint cannot “spin” the vertical relationship between the two tech giants into a horizontal conspiracy in which Apple agreed not to compete directly against Google, the companies said in their joint motion to dismiss.

“[N]o such horizontal agreement exists, either as part of the information services agreements or elsewhere, and plaintiff’s complaint does not allege facts plausibly suggesting otherwise,” the two companies said. “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.”

Google separately moved Friday to force California Crane to arbitrate its allegations against the tech giant, its parent company Alphabet Inc., current CEO Sundar Pichai and former chief executive Eric Schmidt. California Crane’s suit also includes Apple CEO Tim Cook as a defendant.

According to the motion, California Crane agreed to arbitrate virtually all disputes when it bought search advertisements on Google and signed the company’s terms of service.

According to Google, the arbitration provision is not “substantively unconscionable,” which is contract law parlance for an unfair provision. It does, however, “plainly encompasses plaintiff’s claims,” the search giant said.

“Plaintiff alleges that it overpaid Google for showing advertisements on Google’s search results pages due to an alleged conspiracy between Apple and Google,” the company said. “With exceptions not applicable here, the TOS [terms of service] applies to ‘all disputes and claims’ under ‘any legal theory’ that ‘arise out of or relate in any way’ to Google’s advertising programs — a broad agreement clearly encompassing the antitrust claims here.”

California Crane attorney Joseph M. Alioto of the Alioto Law Firm blasted the filings as “without merit.”

“They are trying to game the federal rules, and divert attention away from their plain and contumacious disregard of the antitrust laws and the free enterprise system,” Alioto said in a statement.

“Their recent tactics cannot hide the simple and irrefutable facts: Apple was paid billions of dollars by Google to stay out of the search business. Apple shared in Google’s revenue,” he said. “Apple did everything it could to discriminate in favor of Google and against smaller companies because it got a secret piece of the pie in return.”

Representatives for the other parties did not immediately respond Monday to requests for comment.

California Crane, which provides courses for would-be mobile crane operators and its attorneys are seeking to represent “all consumers and businesses” who paid for Google Search advertising from January 2005 on.

It alleges the profit-sharing agreement by which Apple keeps Google as the default search engine for its Safari browser also covers an anti-competitive deal not to compete directly for search results.

The billions of dollars Google pays Apple each year are a major element of a U.S. Department of Justice lawsuit against Google at the vanguard of antitrust pushback against the power of online platforms.

The government enforcement action is limited to claims that Google has monopolized search results, and the ads that pop up when consumers use its service, through payoffs to Apple and other companies that keep Google Search as the default on laptops, smartphones and tablets.

California Crane’s suit is seeking damages based on alleged overcharges on advertising Google wouldn’t have been able to demand had it faced competition from Apple creating its own search engine.

The plaintiff is also seeking the disgorgement of all the allegedly illegal profit sharing payments from Google to Apple, running into the many billions of dollars, along with the breakup of both companies into smaller, independent companies.

On Friday, Google and Apple responded to the suit by arguing the default search deal has been public for years and that California Crane has no standing to bring suit over the arrangement.

The theory that California Crane was overcharged for advertising, they said, “requires at least five speculative steps to even loosely connect the dots” from conduct to claimed injury. They also argued disgorgement is not an available remedy for this kind of lawsuit.

According to the technology giants, advertisers could only claim harm if Apple developed its own search engine, made it the default on Safari, developed its own competing advertising technology and business, “and these wholly new businesses resulted in plaintiff and class members winning search advertising auctions on Google with lower bids than they previously paid.”

Nor can the December 2021 complaint go back any further than four years based on the statute of limitations, according to the dismissal brief, which focused principally on arguing California Crane hasn’t shown any evidence that would actually indicate an anti-competitive agreement.

The complaint is without “a single fact — a supposed statement by a witness, a document that memorializes the agreement, or any other direct evidence — to support its outlandish assertions,” according to the motion to dismiss.

In addition, the companies argued California Crane makes no real effort to define the alleged market that has allegedly been monopolized in violation of Section 2 of the Sherman Act, which makes it illegal for companies to monopolize or attempt to monopolize.

“The second claim for relief refers to ‘the search business,’ … but elsewhere the complaint cites Google’s share of the ‘computer search engine U.S. market,’ … ‘the search engine U.S. market,’ … and ‘the mobile search engine U.S. market,'” they said.

“Those blurred markets are distinct from the ‘search advertising market,’ … a market where plaintiff’s injury allegedly occurred but not the market subject to any conspiracy to monopolize,” they continued.

“And, more importantly, none of these labels are accompanied by allegations, or any information at all, about the contours of the market, rendering them patently insufficient to state a Section 2 claim,” the motion states.

Google is represented by John E. Schmidtlein and Carol J. Pruski of Williams & Connolly LLP.

Apple is represented by Steven C. Sunshine, Julia K. York, Jack P. DiCanio and Karen Lent of Skadden Arps Slate Meagher & Flom LLP.

California Crane is represented by Joseph M. Alioto and Tatiana V. Wallace of the Alioto Law Firm, Lawrence G. Papale of the Law Offices Of Lawrence G. Papale, Josephine Alioto of The Veen Firm PC, Theresa Moore of the Law Offices Of Theresa D. Moore PC, Lingel H. Winters of the Law Offices Of Lingel H. Winters PC, Robert J. Bonsignore of Bonsignore Trial Lawyers PLLC, Joseph Alioto Jr. of Joseph Alioto Jr. Law, Christopher A. Nedeau of Nedeau Law PC, and Jeffery K. Perkins of the Law Office Of Jeffery K. Perkins.

The case is California Crane School Inc. v. Google LLC et al., case number 4:21-cv-10001, in the U.S. District Court for the Northern District of California.

–Editing by Lakshna Mehta.

Update: This story has been updated to include comment from California Crane’s counsel.
For a reprint of this article, please contact [email protected]

The information provided by is not a substitute for professional medical advice, diagnosis or treatment.
The views and opinions expressed on the site do not necessarily represent those of