Google, Apple, and the CEOs of both companies are accused of agreeing to a non-compete in the internet search business.
The California Crane School filed an anti-trust class-action lawsuit on December 27, alleging that Apple has refrained from entering the internet search business in exchange for billions of dollars in payments from Google.
“In addition to the payments themselves, profit pooling has been held as illegal for the obvious reason that when you’re profit pooling, you have no interest whatsoever in being competitive,” said attorney Joseph M. Alioto, who filed the lawsuit on behalf of the California Crane School.
“We are asking the court to compensate anyone who has done any advertising for the overcharge because Google charged more than otherwise would have been the case if they didn’t have their non-compete agreement with Apple.”
The plaintiff alleges that the tech giants concealed their non-compete agreement fraudulently.
“They attempted to keep the payments somewhat secret in terms of the way they are accounted for it so it’s not easy to find what the amounts are,” Alioto told The Dallas Express. “Our analysis and the analysis of other people show $15 billion last year, and we think that the anticipation for this year is going to be $20 billion.”
The complaint seeks the disgorgement of the alleged billion-dollar payments by Google to Apple and requests an injunction prohibiting the non-compete agreement.
“There’s an awful lot of evidence that we were able to find just by doing our own searches, ironically, on Google,” Alioto said in an interview.
The complaint also includes a photo of Tim Cook of Apple and Sundar Pichai of Google having dinner, allegedly captured through a restaurant window by a passerby. Mr. Pichai’s left arm is resting on a manila folder that contains documents, according to Alioto.
“Usually, you never have evidence like that,” Alioto said. “The conduct is clear.”
The California Crane School, a national company that teaches people how to operate cranes for use on construction sites, is suing based on being a Google advertiser.
“Apple intended before to get into the search business but never did because they got paid, and if Apple got into search, Apple would be able to cut Google in half because half of Google’s business comes over Apple devices,” Alioto added. “If Apple were competing, the prices that the advertisers have to pay would be substantially less. Anytime you have competition, prices go down, and production goes up.”
The lawsuit also calls for the breakup of Google into separate and independent companies and the breakup of Apple into separate and independent companies in the way that Standard Oil company was dissipated into Exxon, Mobile, Conoco, Amoco, Sohio, Chevron, and others.
“It’s really rather simple,” Alioto added. “Do Google and Apple have the ability to set the price? And secondly, do they have the ability to exclude competitors or potential competitors? The answer to those questions is obviously yes because that is exactly what they do.”
