Dream Big Media Inc. v. Alphabet Inc.

Background

Dream Big Media Inc., Getify Solutions, Inc., and Sprinter Supplier LLC alleged that Google LLC and Alphabet Inc., collectively referred to as Google, unlawfully tied Google’s Maps, Routes, and Places application-programming-interface services. According to the complaint, Google’s terms restricted customers from using Google mapping content with non-Google maps or mapping services. The plaintiffs alleged that this conduct, combined with Google’s market power, led to higher prices and prevented them from using competing services.

The plaintiffs asserted tying claims under Sections 1 and 2 of the Sherman Act and Section 3 of the Clayton Act. They also alleged bundling, exclusive dealing, monopoly leveraging, and violations of California’s Unfair Competition Law. The complaint identified Maps APIs, Routes APIs, and Places APIs as relevant product markets and alleged that those markets were global.

Motion to Dismiss

The court applied the standard for a Rule 12(b)(6) motion, which asks whether the complaint states a legally sufficient and plausible claim. The court accepted the complaint’s material factual allegations as true for purposes of the motion.

The court held that the plaintiffs did not adequately allege an unlawful tying arrangement. A tying claim requires a defendant to condition the sale of one product or service on the purchase of another distinct product or service. The court found that Google’s terms restricted how customers could use or display Google’s mapping content, but did not condition the sale of one Google mapping API on the purchase of another. The complaint also did not allege that Google’s mapping APIs could not be purchased individually.

The court also rejected the plaintiffs’ negative-tying theory. Negative tying occurs when a customer promises not to obtain a product from a competitor. The court found that Google’s terms did not prevent customers from using competitors’ mapping services altogether; they instead imposed restrictions on how customers could use Google’s content. The court further found that the plaintiffs’ allegations of coercion were conclusory. Dream Big Media did not identify the Google products it was allegedly forced to purchase or the competing products it could not use. The allegations concerning Getify and Sprinter Supplier did not show that either company paid for Google mapping services, rather than using Google’s free credits.

The court separately held that the alleged product markets were legally insufficient. The plaintiffs had used Google’s own service categories as market definitions without adequately alleging facts about reasonable interchangeability, demand, or economic substitutes. The complaint also did not clearly identify which product was the tying product and which products were tied products. The court further found that the plaintiffs had not plausibly alleged Google’s market power in the relevant markets.

The plaintiffs’ other claims also failed. The bundling claim lacked sufficient allegations that Google offered two or more services for one price. The exclusive-dealing claim lacked sufficient allegations that Google prevented customers from buying competitors’ services. The monopoly-leveraging claim depended on the deficient tying, exclusive-dealing, and bundling theories. The court dismissed the California Unfair Competition Law claim for the same reasons as the antitrust claims.

The court granted Google’s motion to dismiss and dismissed all of the plaintiffs’ claims, but granted leave to amend because it could not say that amendment would be futile. The plaintiffs were ordered to file any amended complaint within 30 days of the order.

Motion to Strike Class Allegations

Google asked the court to strike the proposed class definition because it allegedly included people without standing and was impermissibly “fail safe,” meaning membership would depend on whether a person suffered the alleged unlawful harm. The court declined to strike the allegations at the pleading stage. Although it had doubts about the class definition, it found that Google’s arguments were better addressed during the class-certification process, where the court decides whether a case may proceed as a class action.

The court denied Google’s motion to strike class allegations without prejudice. It also denied Google’s request for judicial notice as moot because the court did not rely on the requested documents in deciding the motion to dismiss.