A British Columbia Supreme Court judge has certified a class action against Apple over allegations that its search deal with Google stifled competition and inflated advertising prices. Here are the details.
A little background
In recent years, Apple’s deal with Alphabet to make Google the default search engine on Safari has attracted the attention of regulators in the US, UK and Australia, while competition concerns in search have also come under scrutiny in the EU and Japan.
While the details of each investigation are different, they all raise concerns about the impact of Google’s dominant position in search, as well as the extent to which its deals with other companies could limit competition.
More recently, Apple’s deal with Google received considerable attention during the U.S. Department of Justice’s antitrust case against the search giant, which included testimony from Apple executives Eddy Cue and John Giannandrea. The latter joined Apple from Google in 2018 and led its efforts in the field of artificial intelligence until resigning earlier this year.
Following the US case, a federal judge ruled in August 2024 that Google had unlawfully maintained its monopoly in online search through anticompetitive deals, including its deal with Apple.
Now, evidence presented during that trial has become central to a class action lawsuit against Apple in Canada, which a British Columbia Supreme Court judge recently certified.
Certified Canadian Class Action
The case was initially brought in 2021 by Spark Event Rentals Ltd., a British Columbia-based event rental company. The plaintiff alleged that Apple and Google conspired to limit competition in the search market by allowing Google to charge advertisers artificially inflated prices.
Apple, meanwhile, argued that its deal with Google was a legitimate distribution agreement rather than an illegal conspiracy. The company also argued that Google was the appropriate defendant, describing itself as an “innocent bystander.”
Interestingly, the lawsuit originally named both Apple and Google as defendants, but the plaintiff later dropped Google from the case following a dispute over an arbitration clause in its advertising contracts.
With Apple now the sole defendant, Judge Thomas 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, and the court also allowed the issue of punitive damages to proceed.
The class action concerns Canadian residents who have 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 ad 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 thesis raised by these briefs is that Apple could have used its resources and distribution network to enter the search engine market, but chose not to do so because Google paid Apple billions of dollars in revenue sharing payments to make Google the default search provider on Apple products. This deal gave Google market power, allowing it to charge supracompetitive advertising prices on search engines.
In my view, this justifies a common purpose to carry out an act prohibited by Article 45 of the Competition Act, such that it is not “clear and obvious” that the plaintiff has not relied on an agreement between Google and Apple not to compete in the search engine market.
At one point in his decision, Judge Thomas cites Giannandrea’s testimony and directly quotes Cue’s from the US antitrust trial, before concluding that “this provides some factual basis, supporting the inference that Apple was not competing with Google in the search engine market because of its agreement with Google.”
Interestingly, the judge also acknowledges Apple’s objections to the evidence, agreeing that “the plaintiff has selected evidence to support his case,” but adding that, in his view, “it is appropriate to do so at this stage of the proceedings.”
With the class action greenlit, the case can now proceed to trial, although no date has yet been announced.
You can read the decision in full here.
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