Dream Big Media Inc. v. Alphabet Inc.

Background

Dream Big Media Inc., Getify Solutions, Inc., and Sprinter Supplier, LLC alleged that they use mapping services supplied by Google, LLC and Alphabet Inc., which the opinion collectively calls “Google.” The plaintiffs use Google’s mapping application programming interfaces, or APIs, on websites or mobile applications.

The plaintiffs alleged that Google unlawfully tied its Maps, Routes, and Places APIs by refusing to sell one service unless a customer also bought the others or agreed not to buy similar services from another provider. They alleged that Google’s market power allowed it to charge higher prices. The claims were described as involving unlawful tying, bundling, exclusive dealing, and monopoly leveraging.

The court had previously dismissed the initial complaint with leave to amend. The plaintiffs filed an amended complaint, and Google moved to dismiss it. The United States submitted a statement of interest under 28 U.S.C. § 517, taking no position on whether dismissal should be granted but cautioning against relying on certain language from an earlier case, Sambreel Holdings LLC v. Facebook, Inc. Google and the plaintiffs were allowed to submit additional briefing.

Analysis

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether the complaint states a legally sufficient claim. The complaint must include enough factual allegations to make liability plausible, rather than merely possible. The court generally accepts material allegations as true and views them favorably to the party opposing dismissal.

The court declined to treat Sambreel as controlling. In that case, the alleged restrictions did not involve an effort to increase the defendant’s market share in a second product or service market. Here, the plaintiffs alleged that Google used restrictions on its mapping APIs to affect competition involving other mapping services. The court stated that a company’s contractual or licensing rights to control use of its products do not automatically override antitrust law.

The court focused on the plaintiffs’ “two-way tying” or, in this case, “three-way tying” theory. The amended complaint alleged that Maps, Routes, or Places could serve as the tying service depending on the transaction, with the other services serving as the tied services. The court explained that tying ordinarily involves using market power in one product market to gain or extend power in a separate market. It questioned how one service could be both the tying and tied product merely because of which service the customer bought first.

The court discussed decisions that had allowed inconsistent two-way tying allegations to proceed at the pleading stage, as well as a decision that declined to dismiss such a theory. It found those decisions insufficient to support denying Google’s motion here. In particular, the plaintiffs alleged that numerous competitors offered alternatives for each of Google’s three services, which appeared to undermine the theory that each service could be both tying and tied.

The plaintiffs argued that they should at least be allowed to proceed with Maps as the tying product and Routes and Places as the tied products. The court stated that this conventional negative-tying theory was not what the existing complaint alleged, although the plaintiffs might be able to amend to assert it.

Disposition

Judge Richard Seeborg granted the defendants’ motion to dismiss, with leave to amend. The court did not preclude the plaintiffs from choosing to pursue a three-way tying theory, but stated that any such amendment would need to explain why the theory was viable. The court also stated that Google could invoke Sambreel in a future motion, while encouraging Google to focus on other arguments. Any amended complaint had to be filed within 30 days of the order. The defendants’ request for supplemental briefing and the plaintiffs’ corresponding request were granted, and the proposed briefs were deemed filed.