Dream Big Media Inc. v. Alphabet Inc.

Background

Defendants Google LLC and Alphabet Inc., referred to together as “Google,” moved to dismiss the First Amended Complaint. That motion was pending when the case was reassigned after the previously assigned judge recused. The plaintiffs are Dream Big Media, Getify Solutions, Inc., and Sprinter Supplier, LLC.

The plaintiffs allegedly use Google mapping services, including application programming interfaces (APIs), on their websites or mobile applications. They allege that Google unlawfully ties its Maps, Routes, and Places API services by refusing to sell one API service unless the customer also agrees to buy the other mapping services or agrees not to purchase similar services from another source. They further allege that this conduct, combined with Google’s market power, enables Google to charge higher prices. The complaint asserts claims under the Sherman Act, the Clayton Act, and California’s Unfair Competition Law.

Court’s analysis

The court revisited the earlier order dismissing the initial complaint, which had relied substantially on Sambreel Holdings LLC v. Facebook, Inc. The court questioned whether that case was applicable. In Sambreel, the alleged tying involved Facebook restricting use of a third-party product that added designs to Facebook pages. The court in that case concluded that the alleged facts did not support a “negative tying” theory because Facebook was not alleged to be competing, or attempting to compete, in the market for the third-party add-on product.

Google relied on statements from Sambreel that Facebook could determine or dictate the terms on which third-party developers and users used its platform. Google argued that it likewise could prohibit customers from using one Google mapping API alongside a non-Google mapping API. The court explained that Sambreel did not involve allegations that the restrictions were intended to, or had the effect of, increasing the defendant’s share of a second product or service market.

The court observed that, unlike the allegations in Sambreel, the plaintiffs allege that Google is attempting to compete in three separate markets and offers products in all three. But the court did not conclude that the plaintiffs had necessarily pleaded a viable negative-tying theory. It identified the plaintiffs’ theory as novel because the same product could allegedly be both the dominant tying product and the secondary tied product, depending on the transaction. The court also noted that the plaintiffs had not identified cases with similar allegations in which two or more markets could alternate between being the tying and tied markets.

Order

The court requested further briefing on these and other appropriate points. Google may file a supplemental brief of no more than 15 pages within two weeks of the order, and the plaintiffs may file a response of no more than 15 pages within one week after that. The matter will then again be under submission unless the court orders otherwise.

The order therefore did not grant or deny Google’s motion to dismiss and did not resolve the viability of the plaintiffs’ antitrust theory.