Antitrust Case: FTC Wary of Apple and Google

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An antitrust case is a legal term used to refer to a case brought forward for jurisdiction by parties charged with using dubious strategies and methods to limit or influence to one’s advantage free competition that exists in the market place (Posner 24). One party may be seeking the prosecution of the other or may be seeking the protection of a right to prevent any possible wrongdoing.

Recently, the United States antitrust regulators, Federal Trade Commission (FTC), became interested in the Apple and Google business relationship (Dylan 2012).

This case involved the use of Google programs and applications as the default settings in mobile devices manufactured by Apple. This has elicited heated debates and criticism because it is anti-competitive and breach of the US free market law.

Google and Apple have broken the US antitrust law (Dylan 2012). This law presents legal provisions that promote free competition in the market place by preventing dubious conduct by companies that is anti-competitive.

This law protects consumers against price exploitation and low quality products because of a company’s monopoly. Most monopolies present few choices on the range of products in the market (American Bar Association 65). The law does not illegalize monopoly but ensures that the power that is given to a company by a monopoly is not abused (Posner 53).

This specific antitrust case has been initiated by the US Federal Trade Commission (FTC) and involves the search engine Google and the Telecommunication giant Apple (Dylan 2012).

The commission is demanding for a legal explanation from both firms on the methodology and law followed in allowing Apple incorporate Google’s search engine on the iPhone and iPad as the default search platform (Dylan 2012).

The commission has demanded for legal documents such as the agreement that gave Apple the privilege that interfered with the free competion in the market place (Dylan 2012). Google’s bitter rival in the marketplace, Microsoft, has not hesitated to label the agreement anti-competitive.

As a result, FTC has intensified its efforts to scrutinize Google’s business operations and conduct. This may lead to a revelation as to whether Google is taking advantage of the fact that it dominates the internet search services to increase its earnings.

As the use of internet over mobile phones increases, the default settings become an important aspect.FTC is also investigating the claim that the Mountain View branch of Google that is in California charges more for advertisements presented by their competitors (Dylan 2012).

In addition, there is a claim that it favors its own businesses and other businesses that it has affiliations to by ranking their search results highly. Since the introduction of the iPhone in 2007 and the iPad in 2010, Google has served as the default search engine (Dylan 2012).

The Android operating system is another critical issue.FTC is carrying out parallel investigations as to whether Google is using the Android operating system to influence competition to their advantage.

Google and Apple have been on the race for dominance in the Smartphone sector of the mobile phone market since 2008 when the first handset that was running on the Android operating system was introduced in the market.

Analysts project that in a few years, internet searches on the mobile phone will surpass searches on desktop computers. According to Macquarie Capital, many customers do not bother with the default settings in their Smartphone and use it with the settings from the manufacturer.

Last year, the Android dominated the mobile phone operating system market with a market share of 50.9 percent. This was in excess of 30.1 percent compared to the iOS operating system of the iPhone. In the same year, Google earned $1.3 billion in revenue from internet searches alone from Apple products (Dylan 2012).

Apple received $1 billion from Google to make it the default search engine. According to reports, Google earns approximately 95 percent of revenue from searches in the US alone. In 2010, Microsoft made an unsuccessful attempt to win over the default search engine spot from Google (Dylan 2012).

There are indications that Apple are not satisfied with the agreement but are reluctant to withdraw because Google provides such a nice experience for users of Apple products. Their feud began when Google announced its intention to introduce the Android operating system (Dylan 2012).

The feud aggravated when Steve Jobs launched a patent combat against manufacturers of handsets that used Android as their operating system. Microsoft and other companies are pushing for a close check of Google’s dominance in the market as they sense foul play.

The Apple and Google antitrust case is one of the latest involving two market leaders in the telecommunication and technology industry. The agreement signed between Apple and Google seem short-lived because the two have turned out to be bitter rivals.

This feud emanated from the introduction o f the Android operating system by Google that was developed to compete against the iPhone (Dylan 2012). The FTC has developed special interest in the relationship and is currently carrying out investigations to establish whether Google’s conduct went against the antitrust law.

Works Cited

American Bar Association. Merger Standards under U.S. Antitrust Laws. New York: American Bar Association, 2009.Print.

Dylan, Lionel. Apple Subpoenaed in Google’s Antitrust Case. Web.

Posner, Robert. Antitrust Law. Chicago: University of Chicago press, 2001.Print.

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Antitrust Case: FTC Wary of Apple and Google

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