Google Leverages Market Power to Hike Up Prices for Maps API Access, Class Action Alleges [DISMISSED]

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Google and parent Alphabet face a proposed class action that alleges the tech giants have for years forced those who use their digital-mapping products into a locked-in bundle of services before then hiking up the price. 

The 55-page antitrust lawsuit alleges the companies have leveraged their enormous market power, “and at times monopoly power,” by improperly tying Google’s mapping products together as a means to restrain competition. The complaint contends that this “impermissible” practice harms not only computer programmers but small businesses to whom the display of location information is especially important as far as attracting and keeping customers. 

The complaint charges that although some competitors offer digital-mapping APIs with comparable data and quality to those of Google, “if not better,” they have been “strangled out of competing effectively in the relevant product markets.” 

“In essence, Google uses its market dominance to improperly tie together its products and lock users into what is sometimes called the Google ecosystem,” the case alleges. “There are competitors, but they have nowhere near the direct market power that Google exerts, nor nowhere near the monopoly power Google has.” 

Central to the alleged “anticompetitive scheme” are Google Maps’ application programming interfaces, or APIs, which serve as the method for one computer to make use of, or “call,” the resources of another program or service, the suit says. By way of example, the case states that a programmer developing a food-delivery app or website that needs to guide drivers to customers, for instance, may call on the Google Maps API to create a digital dynamic map, or to add directions and provide navigation to a driver, and to add information about the restaurant. 

Similarly, restaurants and other small businesses also rely on calling Google’s digital-mapping API to display location information, the complaint adds. Per the suit, embedding digital-mapping APIs into a website allows a customer to both locate a business without opening a separate app or web page and be sure that they are seeing the correct business.

“These are all crucial details when a customer is considering whether to patronize a small business, where even small friction can mean loss of a sale,” the case stresses. 

The lawsuit says that although the costs of “calling” Google’s Maps APIs—$2 for 1,000 calls to the Maps Static API, $2 for 1,000 calls to the Maps JavaScript API, $5 for 1,000 calls to the Routes Directions API and $17 for 1,000 calls to the Places Place Details API—are small on their own, they add up quickly for small businesses and are often beyond the control of the purchaser. The suit notes that the costs small businesses pay ultimately depend on how often a user accesses or reloads a website. 

Although Google for years offered a free tier for its digital-mapping APIs, the company during that time acquired potential competitors, such as Waze, the complaint says. Around May 2018, the company introduced a “pay-as-you-go” pricing plan for its core mapping APIs, reducing the number of free Maps API calls a client could make from 25,000 per day to around 930 per day, according to the case. The lawsuit says developers told the House Antitrust Subcommittee that the change amounted to a price increase of 1,400 percent. 

The suit additionally alleges that Google’s terms of service prohibit customers from using any Google Maps API or component along with any API or component provided by any other digital-mapping service or provider. 

“This unlawful tying and monopolistic behavior has resulted in concrete damages to app and website developers and all other direct users (or those who used them through a pass-through entity or website that passed all of the costs to them) of Google’s digital-mapping APIs, in part through anticompetitive price hikes, forcing users to purchase separate Google products,” the lawsuit alleges. 

The plaintiffs, a California-based digital advertising company, a Texas-based app developer and a Pennsylvania online auto parts shop, say that their lawsuit is “not about punishing an innovative company that is reaping the rewards of its well-deserved success through large size and power,” but instead an effort to stop “a massive company” from engaging in tying and “monopolistic maintenance and exclusionary actions” with regard to certain products and services to stifle competition. 

The case looks to represent all direct purchasers, app or website developers or other users of Google’s Maps APIs, Routes APIs or Places APIs who spent money or had their free-tier credits consumed more rapidly because of the “anticompetitive” allegations described here, as well as other types of users who “continue to experience anticompetitive harm” as a result of the alleged conduct. 

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