Case Documents

Decision Information

Martin - Memorandum of Fact and Law in support of the Notice of Application under s. 103.1

Collection	Case Documents
Date Filed	2025-06-20
File Number	CT-2025-004
Document Type	Pleadings
Type of Application	Leave to Make Application
Section(s) of the Competition Act	Section 103.1 - Leave to make an application under section 74.1, 75, 76, 77, 79 or 90.1
Proceeding Number	3

Decision Content

COMPETITION TRIBUNAL

File No. CT _____________

IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34 (the “Act”); AND IN THE MATTER OF an application by Alexander Martin for an order pursuant to section 103.1 of the Act granting leave to bring an application under sections 79(1) and 90.1(1) of the Act;

AND IN THE MATTER OF an application by Alexander Martin for one or more orders pursuant to section 79(1) of the Act;

AND IN THE MATTER OF an application by Alexander Martin for one or more orders pursuant to sections 90.1(1) of the Act;

BETWEEN:

ALEXANDER MARTIN

– and –

Applicant

ALPHABET INC., GOOGLE LLC, GOOGLE CANADA CORPORATION, APPLE INC. and APPLE CANADA INC.

Respondents _________________________________________________________ MEMORANDUM OF FACT AND LAW OF THE APPLICANT (Pursuant to section 103.1 of the Competition Act) _______________________________________________________

BERGER MONTAGUE (CANADA) PC 330 Bay Street, Suite 505 Toronto, ON M5H 2S8

Albert Pelletier (apelletier @bm.net) Ian Literovich (iliterovich@bm.net) Edwina Mayama (emayama @bergermontague.com) Tel: 647-576-7840

Lawyers for the Applicant, Alexander Martin

TO:

AND TO:

The Registrar Competition Tribunal 90 Sparks Street, Suite 600 Ottawa, ON K1P 5B4 Tel: 613-957-7851 Fax: 613-952-1123

Matthew Boswell Commissioner of Competition Competition Bureau 50 Victoria Street Gatineau, QC K1A 0C9 Tel: 819-997-4282 Fax: 819-997-0324

Alphabet Inc. 1600 Amphitheatre Parkway Mountain View, California, 94043, United States

Google LLC 1600 Amphitheatre Parkway Mountain View, California 94043, United States

Google Canada Corporation Richmond-Adelaide Centre 111 Richmond Street West Toronto, ON M5H 2G4 Tel: (416) 915-8200

Apple Inc. Attn: Katherine Adams Senior Vice President and General Counsel 1 Apple Park Way Cupertino, California, 95014, United States

Apple Canada Inc. Southcore Financial Centre 120 Bremner Boulevard, Suite 1600 Toronto, ON M5J 0A8 Tel: (647) 943-4400

8. III. IV. C. D. E.

H. The Google Respondents and Apple Respondents’ Anti-Competitive Acts Could be Subject to an Order Pursuant to Section 90.1 ........................................................................... 39

11. There is an Existing Arrangement between Google and Apple ................................ 40 12. Anti-Competitive Agreement with Non-Competitor – s. 90.1(1.01) ........................ 40 13. In the Alternative Only, the Parties to the Agreement are Actual or Potential Competitors ........................................................................................................................... 42

STATEMENT OF GROUNDS AND MATERIAL FACTS I. EXECUTIVE SUMMARY 1. Online general search engines are the lifeblood of the internet. They are the primordial gateways to information, commerce, and innovation for both businesses and consumers. They are the prime mover for locating and engaging with nearly all material online. However, the general search engine market is overwhelmingly dominated by a single entity: Google. 1 2. When Google launched in 1998, it created a novel and innovative product in a nascent internet. By being an early entrant to the general search engine market with technology that was particularly impressive at the time, Google effectively cornered the general search engine market by the early 2000’s, and was able to build an empire: first, by becoming the starting point of any web activity for an individual or business, and second, by selling ads in relation to searches that those individuals or businesses made. 3. To Google, this was a prodigiously profitable match made in heaven that seemingly grew every year. 4. Today, Google has become synonymous with “search”, dominating the Canadian market with a staggering 91.24% share in Canada as of 2024. Its closest competitors, Bing and Yahoo!, have significantly smaller shares of 6.78% and 1.98%, respectively. 2 Google controls approximately 89% of the market for general searches on personal computers and approximately

1 For the purposes of this section, Google refers to Google LLC, Google Canada Corporation and the parent corporation, Alphabet Inc. Google LLC, an American multinational company, operates in Canada through its subsidiary, Google Canada Corporation, incorporated in Nova Scotia. Google LLC is incorporated in Delaware and is a wholly owned subsidiary of Alphabet Inc., which is also incorporated in Delaware. 2 Exhibit 115, Affidavit of Daniel Pallag (Sworn June 20, 2025) (the “Pallag Affidavit”) [Stat Counter, Search Engine Market Share Canada, May 2025].

95% on mobile devices. 3 It is trite to acknowledge that Google has been genericized as a verb, and is to online search as what Velcro is to “hooped fasteners” or aspirin is to acetylsalicylic acid. 5. While innovation and first mover advantages contributed to Google’s rise in the late 1990s and early 2000’s, Google’s current dominance in the general search engine market is maintained through exclusionary practices and anti-competitive exclusivity agreements, specifically with tech giants with large userbases who might otherwise create their own search products. 4 These include Google’s arrangement with Apple as explained below. 6. For years, Google has systematically excluded competitors and fortified its position in the general search engine market by entering into agreements with major web browsers and original equipment manufacturers (“OEMs”). These agreements are structured to require that Google is installed as the default search engine on platforms or devices manufactured by the entity in question. In return, the web browsers or OEMs receive substantial cash payments from Google, often billions of dollars. These agreements and the default placement of Google on web browsers, smartphones, tablets, computers and other equipment impede any competing general search engine from gaining a foothold in the market. It is no longer technology and early adoption that give Google its market power, but monopolistic arm-twisting. 7. Google’s Information Services Agreement (the “ISA”) with Apple is one such agreement and was part of a concerted and deliberate strategy to both lock up a broad user base by ensuring that Google was the default general search engine on Apple products, including iPhones, iPads, and Macs. Apple is one of the largest technology companies in the world. It was the first public company to reach a market capitalization of one trillion USD and produces both hardware and

3 Exhibit 121, Pallag Affidavit [Stat Counter, Search Engine Market Share Worldwide May 2025]. 4 Specifically, there are similar agreements with Mozilla, Samsung, Motorola, and others, as is explained further below, though these are not parties to this Application.

software products with vast reach globally. With its market dominance in the tech sector and impressive general technological and software engineering capabilities, Apple is and has been uniquely positioned to challenge Google’s dominance in the general search engine market. 8. It has not done so. 9. Rather, Google established a revenue-sharing agreement with Apple, making Google the default general search engine on the over two billion Apple devices in use worldwide. In 2022, Google paid Apple $20 billion to maintain this arrangement effectively sidelining a large potential competitor and entrenching Google’s market dominance, including by incentivizing Apple to not develop its own general search engine. 5 This strategic payout coincides with a Google study estimating $20 billion as the cost for Apple to develop a general search engine of comparable quality to Google’s. 6 10. The massive annual payments that Google makes to Apple—upwards of $20 billion per year—disincentive Apple from creating its own general search engine, thereby allowing Google to neutralize a formidable potential rival. 7 11. Google thereby provides Apple with the benefit of Google’s search revenues. In the process, Apple has a financial incentive not to bite the hand that feeds it and commence creating its own general search engine. If it did, Apple would forego significant revenues under the ISA. 8

5 United States of America v. Google LLC, Case No. 20-cv-3010 (APM), Judge Amit Mehta Ruling, August 5, 2024 at para. 299.[U.S. v. Google Judge Mehta Ruling]. 6 U.S. v. Google Judge Mehta Ruling at para. 51. . 7 Exhibit 5, Pallag Affidavit [Information Services Agreement (September 16, 2016)]. 8 U.S. v. Google Judge Mehta Ruling at para. 302. Exhibit 108, Pallag Affidavit [Email from Eddy Cue (Apple) to Tim Cook (Apple), Re: Google vs. Bing RPM (Apr. 27, 2016)].

It would also have to undertake the risk of consumer backlash due to the challenges of adapting to growing pains. 9 12. Google’s overwhelming dominance, strengthened by its agreement with Apple, creates a siloed environment that is hostile to innovation. This dominance deters new entrants, as smaller companies are dissuaded from investing in alternative search technologies to even attempt rivalling Google when it is the default search engine on all Apple devices. Potential competitors are forced to realize that it is a fool’s errand to attempt competition against a stacked deck paid for by the ISA between Google and Apple, and similar agreements with OEMs like Android, Samsung and Motorola, and major wireless carriers and web browsers like Mozilla. Search Generally 13. To succeed as a general search engine, having a vast user base is crucial. 14. This is because search accuracy encourages users to return, and the more people who use the search engine, the better its results become. A larger pool of searches, responses, and modifications allows the platform to refine its product, further entrenching its user base. Google understood this dynamic and prioritized visibility to secure usership. 15. Google achieved this by becoming the default search engine on Apple devices, major web browsers, and various internet-enabled devices, including those from OEMs. This cycle of improvement reinforces Google’s dominance, making it increasingly difficult for competitors to gain traction. 16. This strategic move means that new entrants and potential competitors must rely on users manually changing Google as their default general search engine on each device.

9 U.S. v. Google Judge Mehta Ruling at para. 302, Exhibit 109, Pallag Affidavit [Email from Adrian Perica (Apple) to John Giannandrea (Apple), et al., MSFT Search & Advertising Draft Analysis - PRIVILEGED AND CONFIDENTIAL (Dec, 5, 2018) with attached Apple presentation: Search & Advertising].

17. This is a significant hurdle. 18. Any potential new entrant to the market would therefore require a user where Google had obtained default status to: (a) know of the new entrant’s search engine, (b) recognize that their device is utilizing Google as a default, and then, (c) consciously go through the multi-part process of switching the search engine default on their device to the new search engine. 10 19. Google’s default placements obtained through the ISA with Apple and agreements with major web browsers, and various internet-enabled devices, including those from OEMs, significantly impede the visibility and user awareness of emerging search engines, thereby creating a substantial barrier to market entry. This phenomenon, often referred to as “choice friction,” arises when users are subtly discouraged from exploring alternative search options due to the pre-set configurations that favour established search engines. 11 The strategic placement of default search engines on web browsers and internet-enabled devices, including Apple devices, not only limits user choice but also directly impacts the usage and revenue potential of new entrants in the general search engine market. 20. By paying billions of dollars to secure these default settings, Google effectively curtails the competitive landscape, stifling innovation and reducing the diversity of general search engine options available to consumers. Consequently, the default placements serve as a formidable obstacle for new search engines striving to gain traction and establish a foothold in the market.

10 U.S. v. Google Judge Mehta Ruling at paras. 65-68.; Exhibit 124, Pallag Affidavit [Google presentation: On Strategic Value of Default Home Page to Google (Mar. 27, 2007) [UPDATED]]. 11 U.S. v. Google Judge Mehta Ruling at paras. 69-70; Exhibit 124, Pallag Affidavit [Google presentation: On Strategic Value of Default Home Page to Google (Mar. 27, 2007) [UPDATED]].

21. This in turn creates a substantial barrier to entry by limiting the ability of smaller companies to establish themselves in the market and compete effectively. Google’s monopolistic conduct ensures that potential entrants are aware of its leviathan status and opt out of engaging in competition or attempting to create general search products. 22. In essence, Google has engineered a situation in which it has largely locked up a broad base of general search users through its default status on web browsers and internet-enabled devices, and has deterred potential competitors, including Apple. 23. As a result of the above, Google faces minimal competition in the general search engine market. Startups have failed to penetrate the market due to Google’s anti-competitive tactics and exclusive agreements. The ISA dissuades Apple from developing its own general search engine because: (1) it has ceded its broad user base to Google by agreeing that Google will be the default search on Apple devices; and (2) the fees that Google pays Apple pursuant to the ISA comprise a significant portion—approximately 17.5%—of Apple’s operating profit. 12 24. Each of these elements constitute anti-competitive behaviour: (a) Google’s market share of over 90% of the Canadian general search engine market represents that it substantially or completely controls this class of business throughout Canada; (b) Google has, through the revenue sharing agreements it has entered with a variety of real or potential competitors, engaged in anti-competitive acts;

12 Exhibit 116, Pallag Affidavit [Prof. Michael Whinston Presentation: Monopoly Maintenance & Competitive Harm (Oct. 16-17, 2023) at 19].

(c) These acts have had the effect of lessening the ability of new entrants to gain access to general search engine users because Google pays billions of dollars to maintain exclusive default status on web browsers and internet-enabled devices; (d) Google is able, through the ISA, to discourage the entry of a colossal potential rival in the form of Apple by paying it off; and, (e) Google has precluded the entry of smaller potential rivals by ensuring that any attempt they make to grow a new search engine is met with salted soil on the world’s largest supplier of personal computing devices. 25. The payments made by Google to competitors or existing potential competitors have warped the general search engine market. A new entrant not receiving payments from Google is faced with an uphill battle as a result of the exclusionary and predatory conduct of Google ensuring that the vast majority of OEMs are incentivized and unwilling to platform a competing general search engine, and will only platform Google as its default general search engine. II. FACTS A. The Parties 1. The Applicant 26. The Applicant is a Canadian independent video game developer reliant on online distribution of his products. 27. The Applicant has a vested interest in initiating this claim against Google LLC, Google Canada Corporation, Apple Inc., and Apple Canada Corporation due to his interest in the general search engine market and how anti-competitive behaviour by a large entity like the Google Respondents can preclude alternatives from organically developing. The Applicant further has an interest in maintaining a competitive market for general search engines without anti-competitive agreements. 11

28. In part, this relates to the Applicant’s business as someone selling online and who therefore obtains customers from those seeking products through general search engines. Because of Google’s universality and ability to substantially control the business of general search engines, the Applicant is forced to adapt his advertising and online presence to be based on what will perform best with specifically Google’s search algorithm. In a competitive environment, the Applicant would not be faced with a singular and potentially fickle and capricious overseer of what customers can or cannot see. 29. In addition, as a Canadian who utilizes the internet on a personal level and not just in relation to his online-centered business, the Applicant has an interest in the general search engine market providing maximal benefit to himself as a consumer as relates to the openness and accessibility of the Internet, which is a matter of public interest. 30. The Applicant seeks to combat the Respondents’ anti-competitive conduct to restore a competitive environment in Canada that fosters innovation and provides Canadian consumers with diverse choice. In challenging Google’s anti-competitive behaviour, including its abuse of dominance and the ISA, the Applicant aims to prevent harm to those like him that this conduct directly affects, while maintaining an open and accessible Internet, free from undue influence and control by dominant market players. 2. The Respondents 31. Google LLC, an American multinational company, operates in Canada through its subsidiary, Google Canada Corporation, incorporated in Nova Scotia. Google LLC is incorporated in Delaware and is a wholly owned subsidiary of Alphabet Inc., which is also incorporated in Delaware.

32. Apple Inc. is a California-based technology company that designs and markets personal computing products such as the iPhone and Mac computers. Apple Inc. is incorporated in Canada as Apple Canada Inc., a whole owned subsidiary of Apple Inc. Headquartered in Toronto, Ontario, Apple Canada Inc. is responsible for Apple’s activities within the Canadian market and ensures that Apple’s operations in Canada adhere to federal and provincial privacy, labour, competition, and consumer protection regulations. 33. In 2022, Apple’s market capitalization exceeded $2.8 trillion USD, making it one of the most valuable publicly traded companies in history. 13 In 2024, Apple registered an annual revenue of $391.04 billion USD. All Apple devices come preloaded with Safari, its proprietary web browser, with Google as the default search engine. There are over two billion active Apple devices worldwide today. B. Market Background and Competitive Landscape 3. The General Search Engine Market 34. A search engine is a software tool that helps users find information online using keywords or phrases. It works by continuously scanning, indexing, and ranking web pages to return the most relevant results in relation to user queries. General search engines allow users to search the entire web, making them the primary gateway to information for most internet users.

13 Exhibit 111, Pallag Affidavit [Reuters article, Apple becomes first company to hit $3 trillion market value, then slips, January 4, 2022].

4. Google Substantially Controls the General Search Engine Market 35. In Canada, Google holds over 91% of the general search engine market share, processing over 8.5 billion searches monthly. On mobile devices, its market share exceeds 96%. 14 36. Google remains the most widely used general search engine amongst Canadians to this day. In 2023, of the $237.9 billion Alphabet generated in advertisement revenue, $175.0 billion, or 73.6%, came from Google Search. In 2024, Google reported $350 billion USD in revenue, with $198.1 billion USD derived from its search engine, representing 56.6% of its total revenue. 15 In 2024, Google reported $350 billion USD in revenue, with $198.1 billion USD derived from its search engine, representing 56.6% of its total revenue. 16 37. Google is everywhere. 38. Google substantially controls the general search engine market through a number of anti-competitive stratagems, namely revenue-sharing agreements (RSAs) across the tech industry. 5. The Google-Apple ISA and Its Impact on Market Dynamics 39. The current ISA between Google and Apple involves Google paying Apple a share of its search advertisement revenue to ensure Google is the preloaded default search engine on Apple’s Safari browser for both mobile and desktop applications. 17 Under this agreement, Google is automatically used for general search queries unless users manually change the default through several steps.

14 Exhibit 95, Pallag Affidavit, [Made in Canada - Google Statistics Canada]. 15 Exhibit 97, Pallag Affidavit [Fool, Motley The Globe and Mail, How Much Does Google Make in Ad Revenue? October 24, 2024]. 16 Exhibit 16, Pallag Affidavit [Neufeld, Dorothy article, Charted: Alphabet’s Revenue Breakdown in 2024. March 25, 2024]. 17 U.S. v. Google Judge Mehta Ruling at para. 291; See generally Exhibit 4, Pallag Affidavit [Apple: Joint Cooperation Agreement (2016 ISA)].

40. Every instance of advertisement revenue that Google obtains on an Apple device thereby results in a kickback to Apple from Google, pursuant to the ISA. 41. The partnership was established in 2002, and the latest version of the ISA came into effect in 2016 and was extended in 2021; it is expected to last until 2026, with possible extensions until 2031. Neither party may unilaterally terminate the ISA before its expiry date. The two key provisions of the ISA central to this claim are the default status and revenue-sharing terms, and the restrictions on Apple’s product development. 18 42. In 2021, Google spent $26.3 billion USD on revenue shares through various distribution contracts, with a significant portion going to Apple. Indeed, in 2022, Apple received $20 billion from Google under the ISA. These payments, listed as traffic acquisition costs or “TAC” in Google’s financial statements, are its largest expense, being nearly four times more than all other search-related costs combined, including research and development. Google’s annual payments to Apple account for a significant portion, about 17.5%, of Apple’s operating revenue. 19 43. Clearly, Apple is a key partner for Google due to its large user base and control over distribution. 44. In 2024 alone, Apple sold 225.9 million iPhones globally, making up 60% of smartphones in Canada, each with Google as the default search engine. 20 With over two billion active devices worldwide, Apple’s integrated ecosystem includes iPhones, iPads, Macs, Apple Watches, and HomePods, along with services like iCloud, Apple Music, and the App Store. 21 This means an

18 U.S. v. Google Judge Mehta Ruling at para. 291-293; See generally Exhibit 4, Pallag Affidavit [Apple: Joint Cooperation Agreement (2016 ISA)]. 19 U.S. v. Google Judge Mehta Ruling at para. 289; Exhibit 119, Pallag Affidavit [Summary exhibit: Google Search+ Margins, 2014–2021 (Oct. 27, 2023)]. 20 Exhibit 114, Pallag Affidavit [Business Wire article - Apple Products Sales]. 21 Exhibit 112, Pallag Affidavit [Pulse Article - Apple Reports Over 2.35 Billion Active Devices And 1 Billion Subscriptions].

iPhone user likely has multiple Apple devices, all with Google as the default search engine. By securing this default position, Google limits competition, as users are unlikely to switch from the preloaded option on any of their devices. In part, this would thereby require the user to switch each device individually and modify their entire Apple ecosystem from laptop to iPhone to watch. 45. While Apple’s expertise, resources, and scale make it well-suited to challenge Google’s general search engine dominance, the ISA has disincentivized Apple from developing its own search engine. Given Apple’s capital investments in developing machine learning technology and its access to massive customer base, Apple is well-positioned to challenge Google in the general search engine market. However, Apple would stand to lose significant revenue under the ISA if it were to launch its own general search engine. Indeed, Apple projected in 2018 that it would lose approximately $12 billion USD over the first five years after a potential termination of the ISA, even if its general search engine were to receive 80% of Safari queries. 22 46. The ISA entrenches Google’s market dominance and creates significant barriers for competitors, who must rely on users discovering their search engine and manually changing from the Google default set up on Apple devices. 6. In addition to the ISA with Apple, Google has entered into several other RSAs that help it maintain its dominant position in general search. Google has agreements that span major U.S. wireless carriers like AT&T Mobility, Verizon Wireless, and T-Mobile, as well as with Android device manufacturers, OEMs like Samsung Electronics Co. Ltd., Motorola Mobility LLC, and Sony, and major web browsers including Mozilla.Google’s Additional Exclusive Agreements

47.

a. Mozilla-Google RSA Google has an RSA with the browser developer Mozilla, whereby it pays Mozilla a

percentage of revenue share in exchange for Google being set as the default search engine on the

22 Exhibit 108, Pallag Affidavit [Email from Eddy Cue (Apple) to Tim Cook (Apple), Re: Google vs. Bing RPM (Apr. 27, 2016) at 974].

Firefox browser. Under the terms of the current Mozilla RSA, either party may terminate the agreement only upon a breach. Google’s 2021 revenue share payment to Mozilla was over $400 million, or about 80% of Mozilla’s operating budget. Mozilla has repeatedly made clear that without these payments, it would not be able to function as it does today. 23 48. In 2014, Mozilla’s Firefox browser was Yahoo. The Mozilla-Yahoo agreement required Yahoo to pay a minimum annual payment of $375 million, or 70% revenue share, whichever was higher. When Mozilla changed Firefox’s default general search engine from Google to Yahoo, Google’s share of searches on Firefox quickly fell from 80–90% to 60–70%, marking a 20-point drop. Meanwhile, Yahoo’s share surged from about 10% to 30%. This shift highlights the crucial role that default status plays in helping a search engine gain and maintain dominance in the market. 24 b. Google’s Android Agreements 49. Google has also entered into agreements with Android Original Equipment Manufacturers (“Android OEMs”) wherein pays a percentage of the revenue Google generates from queries originating from most if not all Android devices. 25 50. Google’s agreements with Android OEMs are two-part: Mobile Application Distribution Agreements (“MADA”) and RSAs. 51. Google has entered into MADAs, with all Android OEMs, including Motorola and Samsung, among others. The MADA is a device-by-device license that allows OEMs to use

23 U.S. v. Google Judge Mehta Ruling at paras. 334-336; Exhibit 125, Pallag Affidavit [Mozilla presentation: State of Mozilla 2018 (Nov. 2019)]. 24 U.S. v. Google Judge Mehta Ruling at paras. 337-338.; Exhibit 126, Pallag Affidavit [Mozilla presentation: Protecting the Open Web: Threats to Browser Competition (Dec. 18, 2019)]. 25 U.S. v. Google Judge Mehta Ruling at para. 348; Exhibit 94, Pallag Affidavit [Google presentation: MADA & RSA: Android Commercial Agreements (Aug. 2019)].

Google’s proprietary mobile applications developed for the Android ecosystem. This suite of applications is referred to as Google Mobile Services. 26 52. Under the MADA, partner OEMs must preload all 11 GMS applications onto a new device, including the Google Search Widget, Chrome, YouTube, Gmail, Google Maps, and Google Drive, among others. Six of these applications, including the Google Search application and Chrome (which both default to Google), cannot be deleted by the user. 27 53. Without a MADA, an OEM cannot distribute any one of these Google Mobile Services applications. Signatories of the MADA agree to preload and place the Widget on the default home screen of the device. Signatories also receive Chrome, which they agree to place in the Google applications folder, which appears on the default home screen. While Google’s MADA does not prevent OEMs from preloading competing mobile applications, OEMs are disincentivized from doing so because preloading too many applications causes a phenomenon known as “bloatware,” which is suboptimal design that degrades user experience. 28 54. The MADAs may be terminated only by a breach by either party. As of 2019, about 2.3 billion Android devices were subject to the MADA. 29 i. Samsung-Google RSA 55. Google also has an RSA with Samsung.

26 U.S. v. Google Judge Mehta Ruling at para. 356. 27 U.S. v. Google Judge Mehta Ruling at para. 351.; Exhibit 94, Pallag Affidavit [Google presentation: MADA & RSA: Android Commercial Agreements (Aug. 2019)]. 28 U.S. v. Google Judge Mehta Ruling at para. 359.; Exhibit 94, Pallag Affidavit [Google presentation: MADA & RSA: Android Commercial Agreements (Aug. 2019)]. 29 Exhibit 94, Pallag Affidavit [Google presentation: MADA & RSA: Android Commercial Agreements (Aug. 2019)].

56. The 2020 Google-Samsung RSA limits Samsung’s ability to install or promote Alternative Search Services on Enhanced Qualified Devices, with limited exceptions. Under its current RSA, Samsung receives a percentage of revenue share for devices complying with prior terms. 30 57. Additional incremental revenue share requires Samsung to configure certain search access points to Google. “Core Devices” per the Samsung RSA must have Google set as the default general search engine on the Samsung browser, called “S Browser” and must not allow users to change the S Browser default from the browser search bar itself, as opposed to the device settings. In exchange, Google pays Samsung a percentage revenue share on certain search access points for Core Devices. 31 ii. Motorola-Google RSA 58. Motorola’s RSA with Google is structured differently. All devices sold must meet the minimum requirements of the Foundation Tier, which consists of preinstallation of Google’s Chrome browser with Google as the default general search engine in the device’s main dock. 24 . Motorola then earns funds in return. The Premier Tier requires exclusive preinstallation of Google as the default on all search access points on the device, in return for additional monthly payments. 26 Google estimates that the number of Motorola devices sold by the OEM that are subject to this RSA “is north of 95 percent.” 32 (1) Google’s RSAs with OEMs, Samsung and Motorola

30 Exhibit 101, Pallag Affidavit [Samsung: Google Mobile Revenue Share Agreement (July 1, 2020)]. 31 U.S. v. Google Judge Mehta Ruling at paras. 380-382; Exhibit 101, Pallag Affidavit [Samsung: Google Mobile Revenue Share Agreement (July 1, 2020)]. 32 U.S. v. Google Judge Mehta Ruling at para. 384; Exhibit 127 at Pallag Affidavit [Email from Michael Murphy (Google) to Ruth Porat (Google), et al., BC Deal Review: Agenda for Wednesday, June 19 and Thursday, June 20 (June 18, 2019) with attached Google document: BC: GDAF (Google Distribution on Android Framework) - evolution of RSA deals (May 6, 2019)].

59. Google has also entered into tiered revenue sharing agreements with Samsung and Motorola that cover the small percentage of devices these OEMs sell directly to consumers. As with Google’s agreements with mobile wireless carriers, Google agrees to pay Samsung and Motorola more revenue when they offer more search access points under these agreements. Nearly all of Samsung’s devices have Google set as the default search engine in its device’s S Browser, thereby satisfying the highest exclusivity tier in their agreement. In addition, at least 95% of Motorola devices offer exclusive preinstallation of Google as the default search engine on all search access points. 33 iii. Google’s Wireless Carriers Agreements 60. Additionally, Google has signed RSAs with each major U.S. wireless carrier: Verizon, AT&T, and T-Mobile. 34 61. Google’s revenue sharing agreements with these carriers are tiered based on the degree of exclusivity of Google’s search engine on a device, which encourages carriers to offer devices with more access points to Google search. 62. Verizon’s revenue sharing agreement with Google has three tiers that offer higher revenue share percentages for devices with more search access points. AT&T’s revenue sharing agreement with Google has two tiers under which Google pays a higher revenue share percentage when AT&T offers devices with more search access points. T-Mobile’s revenue sharing agreement with

33 U.S. v. Google Judge Mehta Ruling at para. 384. 34 U.S. v. Google Judge Mehta Ruling at para. 364.; Exhibit 63, Pallag Affidavit [Email from Michael Murphy (Google) to Ruth Porat (Google), et al., BC Deal Review: Agenda for Thursday, March 19th at 11 AM PST (Mar. 17, 2020)].

Google provides that it must provide Google search on an exclusive basis in order to receive any revenue under the agreement. 35 63. Google’s tiered revenue share agreements with Verizon, AT&T, and T-Mobile strongly incentivizes these carriers to offer the greatest number of search access points on their devices. As a result, all of these carriers’ Android-enabled devices are enrolled at the highest Google search exclusivity tiers. 36 64. Google’s revenue sharing agreements are highly lucrative to these carriers. From 2007 through 2014, Verizon received 40% of revenue generated from Google search queries on its Android-enabled devices, although this percentage decreased to 20% from 2014 through 2021. 37 7. Google and Apple’s Anti-Competitive Conduct Limited the Ability of Microsoft’s Bing to Gain Market Share

65. As a result of all these RSAs, even a company as large as Microsoft has faced challenges in gaining a foothold in general search due to Google’s dominance in the general search engine market. 66. While other general search engines exist, Microsoft’s Bing tool is Google’s closest rival because Bing generates its own independent search results. 67. Microsoft has access to a vast pool of users on Windows, its dominant desktop computer operating system that maintains a 62% share of the Canadian market. Bing is the default search engine on Edge, the internet browser preloaded on Windows desktop computers. Bing is regarded to be comparable to Google in its search engine quality on desktop computers.

35 U.S. v. Google Judge Mehta Ruling at paras. 376-377; Exhibit 93, Pallag Affidavit [Google presentation: T-Mobile / Google Discussion Doc (Jan. 17, 2017)]. 36 U.S. v. Google Judge Mehta Ruling at para. 379. 37 U.S. v. Google Judge Mehta Ruling at para. 367.

68. Microsoft has invested over $100 billion USD into developing its search engine technology over the past two decades. 69. Despite Microsoft’s technical expertise, access to users and its significant investments, Bing has still failed to compete with Google due to its inability to gain scale. Google dominates the Canadian search engine market with a market share over 90%, while Bing remains a distant second at around 6%. 70. Bing’s lack of scale makes it significantly less effective in the eyes of search advertisers. As a result, Bing generates less than 10% of the revenue that Google receives from its search engine—while Microsoft received $12 billion USD from Bing in 2022, Google received over $146 billion USD from its search engine in 2021. 38 71. Microsoft’s failed attempts to convince Apple to enter a default search agreement underscore its inability to compete with Google. 72. In 2015, prior to the signing of the 2016 ISA, Microsoft hoped that Bing might replace Google as the default general search engine on Safari. Microsoft offered Apple a revenue share rate of 90%, or a little under $20 billion over five years. When that offer was not accepted, Microsoft proposed sharing 100% of its Bing revenue with Apple to secure the default or even selling Bing to Apple. Apple evaluated the potential financial impact of replacing Google with Bing and the analysis showed that if Apple extended the ISA, it would gain about $40 billion from Google in the next five years, and then $70 billion in the following five years. This was double the $20 billion Microsoft offered Apple for the first five years. 39 Apple concluded that a Microsoft-Apple deal would only make sense if Apple “view[ed] Google as somebody [they] don't want to

38 Exhibit 128, Pallag Affidavit [Microsoft Bing Usage and Revenue Stats (February 27, 2024)]. 39 U.S. v. Google Judge Mehta Ruling at para. 325; Exhibit 108, Pallag Affidavit [Email from Eddy Cue (Apple) to Tim Cook (Apple), Re: Google vs. Bing RPM (Apr. 27, 2016)].

be in business with and therefore are willing to jeopardize revenue to get out. Otherwise it [was a] no brainer to stay with Google as it is as close to a sure thing as can be.” 40 73. Microsoft’s failure to achieve penetration in the general search engine market therefore was not a failure of its technology, but its inability to pay sufficient anticompetitive kickbacks to Apple to get the leg up that Google has on Apple devices. In a competitive market without the ISA, Microsoft would be equally positioned for users to determine which search engine to use. 74. Despite being one of the world’s largest technology companies, Microsoft’s inability to provide a sufficiently lucrative anti-competitive kickback was what ultimately killed its ability to have Bing break through Google’s dominance established in large part through its numerous RSAs. 8. Lack of Viable Alternatives 75. While other general search engines exist, none have substantially challenged Google’s dominance. 76. Other search engines, such as Yahoo! and DuckDuckGo rely on Bing in producing their own search results. 41 77. Ecosia, a search engine that commits its profits to tree planting, combines results from Bing, Google, and Wikipedia, rather than maintaining its own index. 42 78. Brave Search, a newer privacy-focused search engine, is attempting to build an independent index, but its market share remains negligible. 43

40 U.S. v. Google Judge Mehta Ruling at paras. 326-327. 41 Exhibit 129, Pallag Affidavit [BBC News Article, “Microsoft and Yahoo seal web deal”]; Exhibit 130, Pallag Affidavit [Ghacks News Article, "DuckDuckGo extends Yahoo partnership" Brinkmann, Martin (July 1, 2016)]. 42 Exhibit 131, Pallag Affidavit [BBC News Article, "The search engine boss who wants to help us all plant trees" (August 31, 2020)]. 43 Exhibit 115, Pallag Affidavit [Stat Counter, Search Engine Market Share Canada, May 2025].

79. To the average Canadian consumer looking to utilize an online search engine, Google is clearly much more than primus inter pares as it relates to availability. 80. In Canada, viable search engine alternatives are scarce. 81. Google dominates with over 90% of the Canadian market share, while Bing remains a distant second at around 6%. Both Yahoo! and DuckDuckGo have struggled to gain traction, holding less than 2% of the market. 44 This lack of options derives directly from Google’s abuse of dominance, the ISA requiring its search engine be the default placed on Apple devices, and Google’s other agreements with web browsers, OEMs, and carriers. 82. Many alternatives once tried to compete with Google but could not sustain operations due to financial struggles arising from lack of user adoption. User adoption is the key factor, as it is the ISA and other exclusivity agreements that have prevented users from engaging with alternatives, instead being sent down a pre-planned railroad towards Google’s product. 83. Neeva, a privacy-focused, ad-free search engine, launched in Canada in 2022, but shut down in 2023. Initially relying on Bing for search results, it eventually developed its own web crawling, indexing, and artificial intelligence-driven ranking model, generating unique search results for about 60% of its queries. 45 Despite securing capital and talent, Neeva struggled to become a default provider on major platforms, leading to its failure. The primary reason was its inability to attract enough regular users, hindering revenue growth through subscription fees. 46 Without default status on major platforms, establishing a strong position in the market is challenging. Neeva’s failure highlights the crucial importance of distribution and visibility in a

44 Exhibit 121, Pallag Affidavit [Stat Counter, Search Engine Market Share Worldwide May 2025]; Exhibit 115 Pallag Affidavit [Stat Counter, Search Engine Market Share Canada May 2025]. 45 Exhibit 113, Pallag Affidavit [Article Where Neeva Gets its Search Results]. 46 Exhibit 132, Pallag Affidavit [BBC News Article, "Neeva: Ad-free search engine shuts down" (May 22, 2023)].

search engine’s success. Despite its potential to diversify consumer choice, Neeva was incapable of competing with the advantage Google gains through the ISA as the default search engine on Apple devices. 84. The overwhelming dominance of Google in the search engine market has created a landscape with few viable alternatives. Various companies have attempted to challenge Google’s position, but ultimately lack of user adoption have hindered their success. Google’s strategic use of exclusive agreements, such as the ISA with Apple, ensures Google’s continued dominance by making it the default search engine on numerous devices. This lack of competition not only limits consumer choice but also reinforces Google’s stronghold on the market, highlighting the need for regulatory intervention to foster a more competitive environment. III. ISSUES 85. The sole issue on this application is whether the Applicant, Alexander Martin should be granted leave under section 103.1 of the Act to make an application under sections 79 and 90.1 of the Act. 86. The answer to this question is yes. IV. SUBMISSIONS C. The Applicant Brings this Application on behalf of the Public Interest 87. The Applicant is an independent video game developer. In the rapidly evolving digital marketplace, independent game developers face challenges in gaining visibility and attracting players. The overwhelming reliance on Google’s general search engine, which dominates the general search engine marketplaces developers at the mercy of Google’s algorithm, dictating the visibility of their games to potential players. 88. Google’s position as the largest general search engine means that independent game developers feel compelled to improve their Google page rankings to ensure their games are seen. 25

The algorithm that determines these rankings is complex and ever-changing, requiring developers to constantly adapt their strategies. This focus on Google is not merely a choice but a necessity, as failing to rank well can result in a significant loss of potential players and revenue. 89. In Canada, the lack of true alternatives in the general search engine market exacerbates this issue. If viable alternatives existed, developers could diversify their efforts, reducing their dependency on Google. This diversification would allow developers to explore different strategies and platforms, potentially reaching a broader audience without being constrained by a single company’s algorithmic decisions, especially one that finds itself on every device across the technology industry through anti-competitive agreements with major players. 90. Google’s agreements with major tech companies, such as Apple and Samsung, further entrench its dominance. They reinforce the necessity for developers to focus their efforts on Google. This concentration of efforts limits the freedom of developers to explore other avenues for visibility and growth. 91. The introduction of true alternatives in the general search engine market such as Canadiancentred regional search engine options would provide independent game developers with more freedom and opportunities. With multiple platforms to choose from, developers could tailor their strategies to different audiences and algorithms, potentially increasing their visibility and success. This diversification would not only benefit developers but also foster a more competitive and innovative digital marketplace to the benefit of independent creators and small businesses who rely on visibility for their works to be appreciated and purchased, and allow them to further create and innovate in other avenues. 92. In light of recent amendments to subsection 103.1 of the Competition Act having come into force on June 20, 2025, the Applicant seeks leave on behalf of the public interest to bring a claim

on behalf of the public interest, aiming to address the anti-competitive practices of the Respondents that have substantially lessened competition in the Canadian general search engine market. D. Interpretation of Amendments to the Competition Act 93. The Supreme Court of Canada has held that the words of a statute must be read and interpreted “in their entire context in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament.” 47 94. This principle of statutory interpretation is particularly pertinent in the context of the Competition Act, especially following the recent amendments introduced through Bill C-59 after a series of efforts, initiatives, and a formal review of the Act by the Legislature to evaluate the relevance of Canada’s competition policy framework through consultation processes. 95. Together, the principle and the recent amendments to the Act illustrate that the Act must be interpreted in a manner that aligns with Parliament’s intention to foster a competitive market environment and protect public interest. The significant legislative changes introduced through Bill C-56, and further amendments through Bill C-59 underscore Parliament’s dedication to fostering a competitive market that benefits both consumers and businesses. 96. Driven by policymakers, the Competition Bureau, and advocates for fair competition, these amendments aim to tackle anti-competitive behaviour, strengthen enforcement, and promote fair competition. 97. Subsection 103.1(1) of the Act now grants any person the right to apply to the Tribunal for leave to make an application under section 74.1, 75, 76, 77, 79 or 90.1. The application for leave

47 Re Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27 at para 21.

must be accompanied by an affidavit setting out the facts in support of the person’s application under that section. 98. By allowing private access to the Competition Tribunal, these reforms strive to create a more equitable business environment while protecting consumer interests, precisely in line with the Applicant’s mandate and its intentions in bringing this claim. 99. During consultations conducted by Innovation, Science and Economic Development Canada (“ISED”), Canadians, civil society groups, unions, and small businesses consistently called for expanded private enforcement mechanisms to hold powerful market actors accountable. These calls were heeded, and Parliament has now expanded standing to allow private parties to bring applications across many of the Act’s civil provisions. 100. Most notably, the amended Act reduces the leave threshold, explicitly recognizing that “a significant public interest in the matter” may suffice even where private commercial harm is not present. In so doing, Parliament signals that public interest enforcement is not merely permitted, it is now essential to the law’s efficacy. 101. In fact, the 2023 ISED consultation report concluded that empowering civil society organizations to bring forward claims was essential to combat underenforcement and to “ensure that Canadians, not just large firms, can seek accountability.” 48 102. The sweeping reforms to the Competition Act between 2022 and 2024 represent a deliberate and foundational shift in Canadian competition policy toward a more open, participatory model rooted in public interest accountability. 49

48 Exhibit 73, Pallag Affidavit, ISED What We Heard consultation report [https://ised-isde.canada.ca/site/strategic-policy-sector/en/marketplace-framework-policy/competition-policy/consultation-future-competition-policy-canada/future-canadas-competition-policy-consultation-what-we-heard-report]. 49 Exhibit 96, Pallag Affidavit [House of Commons Debates Official Report, 44th Parliament, 1st Session, dated October 3, 2023].

E. Test for Leave under Section 103.1 of the Competition Act 103. Subsection 103.1(7) of the Act sets out the test for the Tribunal to grant leave for a person to commence an application under section 79: 50 103.1(7) The Tribunal may grant leave to make an application under section 75, 77, 79 or 90.1 if it has reason to believe that the applicant is directly and substantially affected in the whole or part of the applicant’s business by any conduct referred to in one of those sections that could be subject to an order under that section or if it is satisfied that it is in the public interest to do so.

[emphasis added] 104. As a result of the recent amendments, the new section 103.1(1) has never been judicially interpreted or applied, and an application for leave to make an application under sections 79 and 90.1 in the public interest have not yet been considered by the Tribunal. 105. The Tribunal must determine how the newly amended s. 103.1 should be interpreted and applied in conjunction with sections 79 and 90.1 (as amended) in a manner that advances Parliament’s intent and ensures access to the courts and preserving judicial resources, in line with Supreme Court of Canada principles. 51 106. The legislative evolution to the Competition Act must be read in concert with British Columbia (Attorney General) v. Council of Canadians with Disabilities, which considered the test for public interest standing and the Federal Court’s reasoning in Parkdale Community Legal Services v. Canada, where the Court affirmed that “the purposes that justify granting standing are giving effect to the principle of legality and ensuring access to the courts and access to justice broadly” 52 .

50 Competition Act, RSC 1985, c. C-34, s. 103.1. 51 British Columbia (Attorney General) v. Council of Canadians with Disabilities, 2022 SCC 27 at paras. 41, 48-55 [“CCD”]. 52 CCD at para. 30.

107. Specifically, the test affirmed by the SCC in Council of Canadians with Disabilities involves three factors that this Tribunal ought to cumulatively assess and weigh to determine whether to exercise discretion to grant public interest standing 53 : i. whether the action raises a serious justiciable issue; ii. whether the party bringing the action has a genuine interest in the matter; and iii. whether the proposed action is a reasonable and effective means of bringing the case to court. 54 108. Each of these factors are met in the present context. a. Serious justiciable issue 109. The legal implications of a de facto monopoly by an American technology company over a search engine used by millions of Canadians raises pressing and justiciable issues. 110. The absence of viable domestic or alternative providers constrains meaningful consumer choice and entrenches anti-competitive outcomes. The dynamic created by Google’s dominance, which is maintained through its exclusive agreements across the tech industry, and further cemented through Google and Apple’s ISA, presents broader public policy concerns involving consumer privacy, which is central to the Applicant’s business and personal experience on the internet. The resulting market capture of Google’s dominance in the Canadian general search engine market and the lack of alternatives and real choice of alternative general search engines in the market undermine both the Competition Act’s objectives and the public interest in informational privacy. The scope and impact of the Respondents’ conduct, the harm to consumers

53 CCD at para 28; Canada (Attorney General) v Downtown Eastside Sex Workers United Against Violence Society, 2012 SCC 45 at paras. 18, 20 [Downtown Eastside]. 54 CCD at para 28; Downtown Eastside at paras. 18-20.

and competitors, and broader implications for competition and the economy are elements that ought to be heavily weighed. 111. The concern is immediate, systemic, and ripe for judicial consideration. b. Genuine Interest 112. The Applicant is an independent video game developer who sells and publishes his games online. He is dependent on consumers finding his video games online, including through general search engines. He is representative of the large cohort of Canadians operating in e-commerce that rely on general search engines for consumers to locate and then purchase their products. 113. In addition, as a Canadian internet user beyond his aforementioned business concerns, the Applicant has an interest in the general search engine market operating efficiently and in the interests of consumers. 114. The guiding principles established by the SCC apply with particular force to the Act, which has the goals of ensuring that companies are playing fairly, preserving opportunities for new firms to enter the market, and ensuring that consumers benefit from more and better choices in the marketplace in ways that disproportionately affect consumers all across Canada. 115. Anti-competitive practices like exclusivity agreements such as the ISA and others raised in this Application, may escape review in the civil context because they do not inflict discrete, traceable damage on any one actor, but rather corrode competition systemically, thus requiring an individual such as the Applicant to address this conduct through this Tribunal and its new mechanisms to stimulate competition in the Canadian general search engine market at the benefit of all Canadian consumers and businesses. c. Reasonable and Effective Means

116. Permitting the Applicant to advance this claim offers a reasonable and effective method of judicial review on behalf of the public interest. 117. The systemic nature of the market harm involving foreclosure of competitive alternatives, coercive dependence on a single provider, and exposure of sensitive Canadian data to a foreign jurisdiction is more easily addressed by an individual with a vested interest in the functioning of an efficient market, such as the Applicant. 118. As an individual reliant on general search engines for his business, the Applicant possesses the expertise to frame the issues appropriately and appreciate the extent of the Respondents’ effect on the average Canadian consumer and those with e-commerce businesses reliant on public visibility. His participation would contribute constructively to the legal process and promote the Tribunal’s ability to evaluate the broader implications of a market structure created and maintained by the Respondents’ actions, that undermines Canada’s competition policy and risks infringing on Canadians’ privacy rights if the anti-competitive acts continue to go unregulated. i. Cumulative Weighing of Factors 119. In considering the three factors in Canadian Council of Disabilities, a meaningful balance must be struck between the purposes that favour granting standing and those that militate against it. 55 None of the factors identified are “hard and fast requirements” or “free-standing, independently operating tests”. Rather, they are to be assessed and weighed cumulatively, in light of all the circumstances. 56 120. The sweeping changes to the Competition Act, when read in concert with the public interest standing principle affirmed in Canadian Council of Disabilities, provide a compelling legislative

55 CCD at para. 30; Downtown Eastside, at para 23. 56 Downtown Eastside, at para. 20; CCD at para 69.

and jurisprudential basis for granting leave to the Applicant to bring this Application on behalf of the public interest under sections 79 and 90.1. 121. To deny leave in such a context would frustrate both the text and purpose of the amendments, as well as the public interest doctrine affirmed in Canadian Council of Disabilities and recently followed in Parkdale Community Legal Services v. Canada. 57 It would preserve a status quo that Parliament has explicitly dismantled in favour of a more inclusive, participatory enforcement regime. F. The Respondents’ Anti-Competitive Acts Could be Subject to an Order 122. Before the amendments to section 103.1 of the Act, parties had to demonstrate they were “directly and substantially affected” by alleged reviewable conduct and that the conduct “could be the object of an order.” 58 123. In 2022, the SCC held that there does not need to be a directly affected plaintiff to establish a “concrete and well-developed factual setting” to satisfy the “reasonable and effective means” factor as public interest litigants may instead be able to rely on directly affected non-plaintiff witnesses or experts. 124. With the June 20, 2025 amendments introducing a new leave test with limited guidance, the Applicant will demonstrate how the Respondents’ conduct qualifies for an order under sections 79 and 90.1 as per the outdated section. 125. In assessing this branch of the test, the Tribunal must address each element of the practice. However, it is understood that, at the leave stage, the question of whether the reviewable conduct

57 Parkdale Community Legal Services v. Canada, 2025 FC 912 at para 52. 58 CarGurus, Inc v Trader Corporation, 2016 CACT 15 (CanLII) at para. 62.

“could” be subject to an order is being considered in an application which is not supported by a full evidentiary record. 126. In keeping with the expeditious nature of the leave proceeding, the Tribunal may address each element summarily. In considering this part of the test, reasonable inferences may be drawn where the supporting grounds are given, and circumstantial evidence may be considered. The Tribunal can grant leave under section 103.1 where the evidence presented is “less than a balance of probabilities” so long as it is more than a “mere possibility.” 59 G. Google’s Anti-Competitive Acts Could be Subject to an Order Pursuant to Section 79

127. Under Section 79, an applicant must establish that the respondent possesses a dominant position. Subsection 79(1) of the Act sets out the requirements for the reviewable practice of abuse of dominance: 79 (1) On application by the Commissioner or a person granted leave under section 103.1, if the Tribunal finds that one or more persons substantially or completely control a class or species of business throughout Canada or any area of Canada, it may make an order prohibiting the person or persons from engaging in a practice or conduct if it finds that the person or persons have engaged in or are engaging in

(a) a practice of anti-competitive acts; or (b) conduct (i) that had, is having or is likely to have the effect of preventing or lessening competition substantially in a market in which the person or persons have a plausible competitive interest, and (ii) the effect is not a result of superior competitive performance. 60

59 Barcode Systems Inc. v. Symbol Technologies Canada ULC, 2004 Comp. Trib. 1 at paras 12-13. 60 Competition Act, R.S.C., 1985, c. C-34, ss. 79, 79(1).

128. Thereafter, the applicant need only establish that a respondent’s conduct either (a) is a practice of anti-competitive acts or (b) has had, is having or is likely to have the effect of preventing or lessening competition substantially in the market. Each of these elements is described below. 9. Google Engages in a Practice of Anti-Competitive Conduct 129. Google’s scale, financial resources, and its exclusive agreements with OEMs, web browsers, and carriers, ensure its unrivaled dominance as a leading general search engine, leaving no real alternatives to challenge its position. As noted above, Google has a 91.24% share in Canada as of 2024. Its closest competitors, Bing and Yahoo!, have significantly smaller shares of 6.78% and 1.98%, respectively. Google controls approximately 89% of the market for general searches on personal computers and approximately 95% on mobile devices. 61 Google’s internal studies assessing user behaviour reveal that even a significant drop in search quality would only result in a minor revenue decline of 0.66–0.99%. 62 130. While the complexities involved in developing and maintaining a general search engine are immense, creating a high-quality production is only one part of the equation because its accessibility to users introduces another set of challenges in a market environment with the likes of Google and its numerous anti-competitive exclusive agreements across the tech industry. 131. Search providers have multiple channels to distribute their general search engine to users on mobile and desktop devices. They include but are not limited to: (a) the search bar integrated into browsers; (b) search widgets on device home screens; (c) search applications;

61 Exhibit 133, Pallag Affidavit [Relentless Technology News Article, “Search Engines” (June 15, 2017)]. 62 U.S. v. Google Judge Mehta Ruling at para. 134; Exhibit 117, Pallag Affidavit [Whinston Presentation, October 5, 2023]

(d) preset bookmarks within the default browser; (e) downloading an alternate browser; and (f) direct web search (i.e., navigating to www.google.ca or www.bing.ca). 132. These channels of distribution are known as search access points. 63 133. There are alternative access points for distributing a search engine beyond default settings, but they tend to be less effective due to user awareness and choice friction. 134. Default distribution is the most efficient way to distribute a search engine by preloading it as the default option on various devices. This strategy varies by device type. On Apple products, the default search engine is integrated into the Safari browser, Siri, and Spotlight. 135. Default bias explains why users often remain with preloaded options, as defaults heavily influence consumer choices. While users can change these settings, defaults remain the primary access point for searches because many users are unaware of default settings or how to change them, leading to “choice friction”, where subtle barriers discourage the user from taking the time to work out how to change their product’s default search engine to their personal preferred search engine or an alternative that may better fit their needs, values, or lifestyle. 64 136. Even small barriers can significantly impact whether users stick with the default settings. As a result, Google strategically maintains its status as the default search engine by leveraging choice friction to discourage users from changing defaults. By minimizing these friction points, Google ensures that most users remain with the pre-set options. 137. In 2017, default placements accounted for over half of Google’s search revenue, a figure that had been growing since 2014. In that same year, over 60% of all Google queries were made

63 U.S. v. Google Judge Mehta Ruling at para. 77. 64 U.S. v. Google Judge Mehta Ruling at para. 69; Exhibit 110, Pallag Affidavit [Prof. Antonio Rangel Presentation (Sept. 12-13, 2023)].

through default settings, with a substantial portion coming from iOS and Android devices where Google was preloaded. For Samsung devices, 80% of search revenue in 2016 came from defaults secured by distribution deals. 65 138. When Mozilla, the owner of the Firefox web browser, changed its default general search from Google to Yahoo, Google’s share of queries dropped dramatically. However, once Mozilla switched back to Google, the query share quickly returned to its previous levels, which highlights the influence of default placement on general search engine usage. 139. The power of defaults is also evident from the share of Bing users on Edge. Bing’s search share on Edge is approximately 80%; Google's share is only 20%. Even if one assumes that some portions of those Bing searches are performed by Microsoft-brand loyalists, Bing's uniquely high search share on Edge cannot be explained by that alone. The default on Edge drives queries to Bing. 66 140. These situations illustrate the anti-competitive power that Google’s exclusive agreements, such as its ISA with Apple, provide. 141. The most effective way to distribute a general search engine is through default access points. 142. In the alternative, users could download search applications from app stores on Apple and Android devices, but this requires knowing the app exists and choosing to download it, which reduces effectiveness. For instance, Google receives only about 10% of its searches on Apple devices through its Google Search App. Users can also download alternative browsers like

65 U.S. v. Google Judge Mehta Ruling at para. 74; Exhibit 134, Pallag Affidavit [Google presentation: FUDJE Search summit 2020 (Jan. 2020)]. 66 U.S. v. Google Judge Mehta Ruling at para. 84; Exhibit 116, Pallag Affidavit [Whinston Presentation, October 16, 2023]; Exhibit 117, Pallag Affidavit [Whinston Presentation, October 5, 2023]; Exhibit 118, Pallag Affidavit [Whinston Presentation, November 16, 2023].

Microsoft’s Edge, but this involves similar choice friction as downloading search apps. Consequently, Google receives only 7.6% of queries on Apple devices through user-downloaded Chrome, with the lion’s share of the remainder being on Apple’s Safari platform. 67 143. Google’s ISA with Apple strategically prevents competitors from achieving the visibility that Google enjoys as the default search engine on the 250 million Apple devices sold annually, and the 2 billion active Apple devices worldwide. 144. Google’s other agreements with web browsers, OEMs, and carriers further fortify Google’s position as the dominant general search engine and create insurmountable barriers for potential general search engine competitors seeking to gain a foothold in the market. 10. Google and Apple Have Substantially Lessened Competition in the Market Through the ISA

145. Google’s internal projections in 2020 indicated that losing its default status on Apple devices could result in a significant loss of query volume and revenue. 68 The ISA facilitates Google’s access to Apple’s user base, maintaining and enhancing its dominant position. Google’s strategic focus on default placement maximizes search volume and revenue, thereby entrenching its dominance with the broad base of consumers with Apple devices. 146. The revenue-sharing provisions in the ISA do not foster competition. Instead, they create substantial barriers to entry for other general search engines and potential new entrants to the general search engine market. Google’s internal analysis confirmed that no competitor could

67 U.S. v. Google Judge Mehta Ruling at para. 81. 68 U.S. v. Google Judge Mehta Ruling at para. 75; Exhibit 135 at Pallag Affidavit [Email from Mike Roszak (Google) to Ben Friedenson (Google), Re: Updated NYC Scenario Slides for Daniel (Jan. 16, 2016) with attached Google presentation: NYC Scenarios (Jan. 14, 2016)].

realistically match its financial offers to Apple, effectively locking out rivals from gaining default status. 69 147. Indeed, Microsoft attempted to negotiate a similar exclusive agreement with Apple, but it could not overcome Google’s entrenched position. Google’s analysis concluded that Microsoft would have to pay Apple 122% of Bing’s revenue share to match Google’s payment of 33.75% of its revenue share, making it financially infeasible for Microsoft. Unable to outbid Google, this analysis demonstrated that even Microsoft—a technology giant in its own right—could not overcome the financial barriers that Google erected to maintain its dominance in the general search engine market. 70 148. By securing its exclusive agreement, Google entrenches its dominant position, and limits opportunities for competitors to gain market share, which reduces consumer choice, and dissuades Apple from making it worthwhile to develop its own search engine or introducing general search features on its products that may rival Google’s general search engine. H. The Google Respondents and Apple Respondents’ Anti-Competitive Acts Could be Subject to an Order Pursuant to Section 90.1

149. In keeping with the Applicant’s demonstration of how the Respondents’ conduct qualifies for an order under sections 79 and 90.1 as per the outdated section 103.1 leave test, this next part turns to section 90.1. 150. Under Section 90.1 of the Competition Act, agreements or arrangements between competitors (or non-competitors) that prevent or lessen competition substantially occur when: (a) There is an existing or proposed agreement or arrangement;

69 U.S. v. Google Judge Mehta Ruling at para. 328. 70 U.S. v. Google Judge Mehta Ruling at para. 78.

(b) The parties to the agreement are actual or potential competitors; and, (c) There is substantial prevention or lessening of competition. 11. There is an Existing Arrangement between Google and Apple 151. The ISA between Google and Apple, initially entered in 2002, is a pivotal arrangement that has and continues to significantly influence the competitive landscape of the general search engine market. The agreement ensures that Google remains the default search engine on Apple’s Safari browser, a position that grants Google substantial access to Apple’s extensive user base. By securing this default status, Google effectively limits the ability of other search engines to compete, as users are less likely to switch from the preloaded option. Neither party can unilaterally terminate the ISA before its termination date in 2026, and it has extension potential until 2031. 71 152. The ISA involves substantial financial commitments from Google to Apple, characterized by revenue-sharing provisions that align Apple’s financial interests with maintaining Google’s dominant position. This arrangement not only reinforces Google’s market dominance, but also creates significant barriers for potential competitors. 153. Through the ISA, Google leverages its financial power to maintain its competitive edge, thereby stifling innovation and reducing consumer choice. The absence of general Canadian search engines in the market as alternative choices for Canadians highlights Google’s long-standing dominance that has grown exponentially upon its striking of the ISA with Apple in 2002, and the several iterations of their agreement since then. 12. Anti-Competitive Agreement with Non-Competitor – s. 90.1(1.01)

71 U.S. v. Google Judge Mehta Ruling at para. 291-293; See generally Exhibit 4, Pallag Affidavit [Apple: Joint Cooperation Agreement (2016 ISA)].

154. Under the newly promulgated Section 90.1(1.01) of the Competition Act, Parliament has empowered the Competition Tribunal to adjudicate whether agreements between an entity and a non-competing third party can be nonetheless anti-competitive in nature: (1.01) If the Tribunal finds that a significant purpose of the agreement or arrangement, or any part of it, is to prevent or lessen competition in any market, it may make an order under subsection (1) even if none of the persons referred to in that subsection are competitors. 72

155. Previously, the definition of “competitor” used to be a limiting factor on the scope of section 90.1, requiring an agreement to be between competitors or potential competitors for a product. Its applicability was limited to horizontal collaboration. Specifically, the Act defines a competitor as “a person who it is reasonable to believe would be likely to compete with respect to a product in the absence of the agreement or arrangement.” 73 156. Looking to analogous precedent in lieu of jurisprudence on this particular element of the Act given its novelty, the Tribunal can turn to the past guidance on a non-competitor involved in an anti-competitive agreement by reviewing the standard for action against a competitor in a price-fixing conspiracy under section 45. 74 157. There, parties that are not competitors may also be prosecuted under section 45 through the aiding and abetting provisions in section 21 or the counselling provisions in section 22 of the Code in circumstances where the conditions of those sections are met. For example, a wholesaler who facilitates a price-fixing conspiracy among its retail clients may be a party to the conspiracy even if it does not compete in the retail market.

72 Competition Act, R.S.C., 1985, c. C-34, s. 90.1(1.01). 73 Competition Act, R.S.C., 1985, c. C-34, s. 90.1 (11). 74 Competition Act, R.S.C., 1985, c. C-34, s. 90.1 (11).

158. The ISA includes revenue-sharing provisions that align Apple’s financial interests with maintaining Google’s dominant position, as well as restrictions on Apple’s product development. 75 These factors effectively prevent Apple from challenging Google’s market dominance. 159. Developing a search engine is an extremely resource-intensive endeavour, requiring substantial capital and human resources. Apple, as a technological giant with vast resources and a significant market presence, stands as a potential competitor to Google in the general search engine market. Its extensive ecosystem, including products like the iPhone and the iPad, provides a robust platform for launching a competitive general search engine. 160. In a study, Google estimated that Apple would need around $20 billion to replicate its search infrastructure. Engineering and product management could cost Apple an additional $7 billion annually, representing a significant portion of its research and development budget, and ongoing maintenance would amount to $4 billion each year to replicate Google’s search infrastructure. 76 161. Despite the several elements required to develop a search engine to replicate Google’s search infrastructure, given Apple’s impressive financial and market standing, with an annual revenue of $391.04 billion USD in 2024, over 2.2 billion active devices worldwide, and a market capitalization exceeding $2.8 trillion USD in 2022, it is entirely conceivable that Apple could emerge as a formidable competitor to Google. 77 13. In the Alternative Only, the Parties to the Agreement are Actual or Potential Competitors

75 U.S. v. Google Judge Mehta Ruling at para. 304.; Exhibit 29, Pallag Affidavit [Email from Christopher Haire (Google) to Joan Braddi (Google), Re: Topics - Apple Meeting (August 8, 2018)]. 76 U.S. v. Google Judge Mehta Ruling at para. 51. 77 Exhibit 111, Pallag Affidavit, [Reuters article, Apple becomes first company to hit $3 trillion market value, then slips, January 4, 2022].

162. In the alternative only, the ISA is an anti-competitive agreement between the Google Respondents and a competitor or potential competitor within the meaning of s. 90.1(1) of the Competition Act. 163. As noted above, the Act defines a competitor as “a person who it is reasonable to believe would be likely to compete with respect to a product in the absence of the agreement or arrangement.” 78 164. In the general search engine market, Google currently dominates. However, Apple could be a significant competitor if not for the ISA. Thus, if the Tribunal finds that the newly promulgated s. 90.1(1.01) is not applicable to the ISA, the ISA should be viewed as an anti-competitive agreement with a potential competitor. 165. Apple has unique capacity and resources, positioning it as a potential challenger in the general search engine market. However, the provisions of the ISA with Google effectively dissuade Apple from developing and expanding its search capabilities. By maintaining Google as the default search engine on Apple devices, the ISA discourages Apple from entering the market, despite its capacity to challenge Google’s dominance. 166. For the same reasons highlighted as relate to how the ISA constitutes an anti-competitive agreement within the meaning of s. 90.1(1.01), the potential entry of Apple into the general search engine market makes it a potential competitor within the meaning of the Act.

78 Competition Act, R.S.C., 1985, c. C-34, s. 90.1(11).

14. There is Substantial Prevention or Lessening of Competition 167. Though Apple and the Google Respondents may not directly compete in the general search engine market, the ISA remains an anti-competitive agreement that substantially lessens competitive behaviour on Apple’s part. 168. While the ISA primarily focuses on maintaining Google’s dominance in the general search market, the ISA results in Apple opting to take Google’s annual, multi-billion-dollar payoff than to enter the general search engine market and compete as it tends to do in any other area of technology development and innovation. 169. Apple has allowed the ISA to influence user behaviour, leading Apple users to default to Google. Since distribution and visibility are crucial for a general search engine’s success, this agreement effectively transfers Apple’s customer base to Google. This limits Apple’s potential to create a competing general search engine, as its vast user base is already committed to Google’s services. Under the ISA, Apple cedes its ability to leverage its own ecosystem to challenge Google, which stifles competition and innovation both in the market and in the broader tech industry. The ISA has reinforced Google’s dominance, presenting significant challenges for Apple if it ever decided to enter the search engine market. 79 170. The ISA explicitly impacts Apple’s ability to innovate within its own ecosystem. This dynamic is evident in Apple’s approach to integrating search capabilities into its devices, subtly navigating the constraints imposed by the ISA provision preventing Apple from participating, let alone contributing, to the general search engine market.

79 U.S. v. Google Judge Mehta Ruling at para. 291-293; See generally Exhibit 4, Pallag Affidavit [Apple: Joint Cooperation Agreement (2016 ISA)].

171. In 2016, Apple introduced its ‘Suggestions’ feature, allowing it to classify certain queries as outside the scope of “Search Queries” under its agreement with Google. The feature effectively enabled Apple to redirect queries away from Google, enhancing user experience by providing direct navigation options. Users inputting navigational queries into Siri, Spotlight, or Safari could bypass Google’s search results entirely, accessing third-party sites directly and streamlining Google’s search process. 172. Google was dissatisfied with this feature, as it diverted traffic from its general search engine, impacting its advertising revenue and market dominance. In response, Google renegotiated the ISA with Apple to restrict the implementation of such features that could divert usage from Google, despite the enhanced user experience they offered to Apple users. 80 173. By limiting Apple’s ability to develop and implement user-enhancing features, the ISA reduces incentives for Apple to invest in new technologies and innovations no matter how little or how much they overlap with general search. This underscores the broader impact of exclusivity agreements in the tech industry, where dominant players can contractually maintain control and suppress competitive advancements across several markets. 174. Google and Apple’s ISA has created a market environment where rival general search engines and potential market entrants cannot effectively compete, leading to reduced innovation and less competition in the Canadian general search engine market. 175. The ISA between Google and Apple effectively harms businesses, consumers, and locks out potential competitors from the general search engine market, thus stifling innovation from companies with the established user base and technological prowess to compete in the market, and

80 U.S. v. Google Judge Mehta Ruling at para. 305.

importantly, stifling innovation from potential new entrants to the market discouraged by the significant and highly entrenched hurdle that not even Microsoft’s Bing was able to surmount. 176. The ISA has entrenched Google’s position as the default general search engine across Apple devices in Canada, preventing other general search engines from gaining a foothold and stifling competitive dynamics. V. CONCLUSION 177. Lack of competition has dire consequences for innovation. With Google’s entrenched dominance, there is little incentive to push the boundaries of what a search engine can do. Competitors, who might otherwise drive innovation through new features or improved algorithms, are unable to gain the market share necessary to challenge Google’s dominance or even engage with Canadian consumers potentially interested in an alternative general search engine. This stagnation affects the general search engine market but also has repercussions on related industries. 178. To restore competition and foster innovation, regulatory intervention is essential. By regulating or banning exclusive agreements, regulators can level the playing field for other search engines, encouraging the development of new technologies and business models, ultimately benefiting consumers through improved services and lower prices. 179. The Applicant seeks remedial action to restore competition in the general search engine market and protect the Canadian market and its consumers from further anti-competitive conduct that the Respondents’ have established and from which they have benefited for over 20 years.

VI. ORDER SOUGHT 180. The Applicant seeks an Order: (a) granting it leave to commence an Application against J&J pursuant to section 79 and 90.1 of the Act, in the form contained within the Proposed Notice of Application; and (b) awarding the Applicant its costs of this Application for leave.

June 20, 2025

ALL OF WHICH IS RESPECTFULLY SUBMITTED

___________________________________ BERGER MONTAGUE (CANADA) PC Lawyers for the Applicant

Alexander Martin

VII. TAB

LIST OF AUTHORITIES DESCRIPTION 1. Re Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27 at para 21 2. British Columbia (Attorney General) v. Council of Canadians with Disabilities, 2022 SCC 27 (CanLII), [2022] 1 SCR 794

4. 5. 6.

Canada (Attorney General) v. Downtown Eastside Sex Workers United Against Violence Society, 2012 SCC 45 (CanLII), [2012] 2 SCR 524

Parkdale Community Legal Services v. Canada, 2025 FC 912 CarGurus, Inc v Trader Corporation, 2016 CACT 15 Barcode Systems Inc. v. Symbol Technologies Canada ULC, 2004 Comp. Trib. 1 at paras. 12-13.

Other Materials and Literature

7. 8.

10.

11.

Legislation 12. 13.

14.

Competitor Collaboration Guidelines, May 6, 2021 Innovation, Science, and Economic Development Canada, Future of Canada’s Competition Policy Consultation – What We Heard Report, September 2023

Innovation, Science, and Economic Development Canada, Making Competition Work for Canadians: A consultation on the future of competition policy in Canada, February 2023

Innovation, Science, and Economic Development Canada, The Future of Competition Policy in Canada¸2022

House of Commons Debates Official Report, 44 th Volume 151 No. 228, dated October 3, 2023

Parliament, 1

Session,

Competition Act, R.S.C., 1985, c. C-34 Bill C-56 – Competition Act (Amendment) 2023, starting at Part 2, section 3

Bill C-59 – Competition Act (Amendment) 2024, c.15 (starting at section 231)

File No. CT-

COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34 (the “Act”); AND IN THE MATTER OF an application by Alexander Martin for an order pursuant to section 103.1 of the Act granting leave to bring an application under sections 79(1) and 90.1(1) of the Act;

AND IN THE MATTER OF an application by Alexander Martin for an order pursuant to sections 79(1) of the Act;

AND IN THE MATTER OF an application by Alexander Martin for one or more orders pursuant to sections 90.1(1) of the Act;

BETWEEN:

ALEXANDER MARTIN – and –

Applicant

ALPHABET INC., GOOGLE LLC, GOOGLE CANADA CORPORATION, APPLE INC., AND APPLE CANADA INC.

Respondents _________________________________________________________ MEMORANDUM OF FACT AND LAW OF THE APPLICANT (Pursuant to s. 103.1 of the Competition Act) _________________________________________________________

BERGER MONTAGUE (CANADA) PC 330 Bay Street, Suite 505 Toronto, ON M5H 2S8

Albert Pelletier (apelletier @bm.net) Ian Literovich (iliterovich@bm.net) Edwina Mayama (emayama @bergermontague.com)

Tel: 647-576-7840 Lawyers for the Applicant, Alexander Martin

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