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Case 4:20-cv-07034-YGR Document 40 Filed 12/17/20 Page 1 of 33

Karen L. Dunn (DC SBN 1002520; pro hac vice)


1 William A. Isaacson (DC SBN 414788; pro hac vice)
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
2
2001 K Street NW
3 Washington, D.C. 20006-1047
Telephone: (202) 223-7300
4 Facsimile: (202) 223-7420
wisaacson@paulweiss.com
5 kdunn@paulweiss.com
6 Meredith R. Dearborn (SBN 268312)
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
7 943 Steiner St.
8 San Francisco, CA 94117
Telephone: (202) 223-7300
9 Facsimile: (202) 223-7420
mdearborn@paulweiss.com
10

11 Counsel for Defendant


Apple Inc.
12

13 UNITED STATES DISTRICT COURT


NORTHERN DISTRICT OF CALIFORNIA
14
OAKLAND DIVISION
15
16 JOHN PISTACCHIO, on behalf of himself CASE NO. 4:20-cv-07034-YGR
and all others similarly situated,
17
DEFENDANT’S NOTICE OF MOTION AND
18 Plaintiff, MOTION TO DISMISS JOHN
PISTACCHIO’S CLASS ACTION
19 v. COMPLAINT; SUPPORTING
MEMORANDUM OF POINTS AND
20 APPLE INC., a California Corporation, AUTHORITIES
21
Defendant. Date: March 9, 2021
22 Time: 2:00 PM
Place: Courtroom 1, 4th Floor
23

24 The Honorable Yvonne Gonzalez Rogers

25

26

27

28

DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT


CASE NO. 4:20-cv-07034-YGR
Case 4:20-cv-07034-YGR Document 40 Filed 12/17/20 Page 2 of 33

1 TABLE OF CONTENTS

2 NOTICE OF MOTION AND MOTION .........................................................................................1


3 MEMORANDUM OF POINTS AND AUTHORITIES .................................................................1
4 PRELIMINARY STATEMENT .....................................................................................................2
5 PLAINTIFF’S ALLEGATIONS .....................................................................................................3
6 ARGUMENT ...................................................................................................................................7
7 I. LEGAL STANDARD ..........................................................................................................7
8 II. PLAINTIFF FAILS TO ALLEGE A PLAUSIBLE PRODUCT
MARKET. ............................................................................................................................8
9
III. PLAINTIFF’S MONOPOLIZATION CLAIMS FAIL ON OTHER
10 GROUNDS. .......................................................................................................................12
11 A. PLAINTIFF FAILS TO PLEAD THAT APPLE HAS
MONOPOLY POWER. .........................................................................................12
12
B. PLAINTIFF HAS FAILED TO PLEAD ANTICOMPETITIVE
13 CONDUCT; INSTEAD, HE MERELY ALLEGES THAT APPLE
DID NOT OFFER ITS ALLEGED COMPETITORS THEIR
14 PREFERRED TECHNICAL TERMS. ..................................................................15
15 IV. PLAINTIFF FAILS TO STATE A SECTION 2 ESSENTIAL-FACILITY
CLAIM. ..............................................................................................................................18
16
A. CONSUMERS MAY NOT BRING AN ESSENTIAL-
17 FACILITIES CLAIM. ...........................................................................................18
18 B. PLAINTIFF’S ESSENTIAL-FACILITIES CLAIM OTHERWISE
FAILS. ...................................................................................................................19
19
V. PLAINTIFF’S SECTION 1 CLAIM MUST BE DISMISSED BECAUSE
20 IT IS PREDICATED ENTIRELY ON UNILATERAL CONDUCT. ..............................21
21 VI. THE CARTWRIGHT ACT CLAIM FAILS FOR THE SAME REASONS
AS THE SECTION ONE CLAIM. ....................................................................................23
22
VII. THE UCL CLAIM FAILS WITH THE ANTITRUST CLAIMS. ....................................24
23
VIII. THE UNJUST ENRICHMENT CLAIM SHOULD BE DISMISSED. ............................24
24
CONCLUSION ..............................................................................................................................25
25

26

27

28

DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:


CASE NO. 4:20-cv-07034-YGR
Case 4:20-cv-07034-YGR Document 40 Filed 12/17/20 Page 3 of 33

1 TABLE OF AUTHORITIES

2 Page(s)
CASES
3
Abid v. Google LLC,
4 2018 WL 3458546 (N.D. Cal. July 18, 2018) ..........................................................................13
5
Aerotec Intl., Inc. v. Honeywell Intl., Inc.,
6 836 F.3d 1171 (9th Cir. 2016) .................................................................................................20

7 Analogix Semiconductor, Inc. v. Silicon Image Inc.,


2008 WL 8096149 (N.D. Cal. Oct. 28, 2008)............................................................................8
8
Apple, Inc. v. Psystar Corp.,
9 586 F. Supp. 2d 1190 (N.D. Cal. 2008) ...................................................................................23
10 Ashcroft v. Iqbal,
11 556 U.S. 662 (2009) ...................................................................................................................8

12 Astiana v. Hain Celestial Grp., Inc.,


783 F.3d 753 (9th Cir. 2015) ...................................................................................................24
13
Baar v. Jaguar Land Rover N. Am., LLC,
14 295 F. Supp. 3d 460 (D.N.J. 2018) ....................................................................................22, 23
15 Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ...................................................................................................................9
16

17 Blix Inc. v. Apple, Inc.,


2020 WL 7027494 (D. Del. Nov. 30, 2020) ................................................................14, 15, 20
18
Bondi v. Jewels by Edwar, Ltd.,
19 73 Cal. Rptr. 494 (Ct. App. 1968)............................................................................................23
20 Bookhouse of Stuyvesant Plaza, Inc. v. Amazon.com, Inc.,
985 F. Supp. 2d 612 (S.D.N.Y. 2013)......................................................................................17
21

22 C.W. v. Epic Games, Inc.,


2020 WL 5257572 (N.D. Cal. Sept. 3, 2020) ..........................................................................25
23
Chavez v. Whirlpool Corp.,
24 113 Cal. Rptr. 2d 175 (Ct. App. 2001) ..............................................................................23, 24

25 Cnty. of Stanislaus v. Pac. Gas & Elect. Co.,


1995 WL 819150 (E.D. Cal. Dec. 18, 1995) ...........................................................................19
26
Credit Chequers Info. Svcs., Inc. v. CBA, Inc.,
27
1999 WL 253600 (S.D.N.Y. Apr. 29, 1999)............................................................................19
28
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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Curtin Mar. Corp. v. Santa Catalina Island Co.,


1 2018 WL 10014586 (C.D. Cal. Feb. 21, 2018)........................................................................19
2
Davis v. Pac. Bell,
3 204 F. Supp. 2d 1236 (N.D. Cal. 2002) ...................................................................................18

4 In re Elevator Antitrust Litig.,


502 F.3d 47 (2d Cir. 2007).......................................................................................................17
5
Fed. Trade Commc’n v. Lab’y Corp. of Am.,
6 2011 WL 3100372 (C.D. Cal. Mar. 11, 2011) .........................................................................12
7 Fed. Trade Commc’n v. Qualcomm Inc.,
8 969 F.3d 974 (9th Cir. 2020) .............................................................................................12, 21

9 Ferguson v. Greater Pocatello Chamber of Commerce, Inc.,


848 F.2d 976 (9th Cir. 1988) ...................................................................................................18
10
In re German Auto. Mfrs. Antitrust Litig.,
11 2020 WL 6274806 (N.D. Cal. Oct. 23, 2020)..........................................................................11
12 In re Gilead Scis. Sec. Litig.,
13 536 F.3d 1049 (9th Cir. 2008) ...................................................................................................8

14 In re Glumetza Antitrust Litig.,


2020 WL 1066934 (N.D. Cal. Mar. 5, 2020) ...........................................................................25
15
Golden Gate Pharm. Services, Inc. v. Pfizer, Inc.,
16 2010 WL 1541257 (N.D. Cal. Apr. 16, 2010) ...........................................................................9
17 Goldstein v. Gen. Motors LLC,
445 F. Supp. 3d 1000 (S.D. Cal. 2020) ....................................................................................25
18

19 United States v. Grinnell Corp.,


384 U.S. 563 (1966) .................................................................................................................12
20
Hicks v. PGA Tour, Inc.,
21 897 F.3d 1109 (9th Cir. 2018) ......................................................................................... passim
22 hiQ Labs, Inc. v. LinkedIn Corp.,
2020 WL 5408210 (N.D. Cal. Sept. 9, 2020) ............................................................8, 9, 18, 20
23
Jeanery, Inc. v. James Jeans, Inc.,
24
849 F.2d 1148 (9th Cir. 1988) ...........................................................................................21, 22
25
Kerwin v. Casino,
26 802 F. App’x 723 (3d Cir. 2020) .............................................................................................21

27 Khalid v. Microsoft Corp.,


409 F. Supp. 3d 1023 (W.D. Wash. 2019)...............................................................................15
28
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
CASE NO. 4:20-cv-07034-YGR

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LAI v. USB-Implementers Forum, Inc.,


1 2014 WL 12600969 (C.D. Cal. Nov. 21, 2014).......................................................................10
2
Lenhoff Enters., Inc. v. United Talent Agency, Inc.,
3 729 F. App’x 528 (9th Cir. 2018) ............................................................................................23

4 Levitt v. Yelp! Inc.,


765 F.3d 1123 (9th Cir. 2014) .................................................................................................24
5
Little Rock Cardiology Clinic PA v. Baptist Health,
6 591 F.3d 591 (8th Cir. 2009) ...................................................................................................12
7 LiveUniverse, Inc. v. MySpace, Inc.,
8 304 F. App’x 554 (9th Cir. 2008) ......................................................................................17, 24

9 Loren Data Corp. v. GXS, Inc.,


501 F. App’x 275 (4th Cir. 2012) ............................................................................................20
10
MetroNet Servs. Corp. v. Qwest Corp.,
11 383 F.3d 1124 (9th Cir. 2004) .................................................................................................20
12 Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers,
13 795 F.3d 1124 (9th Cir. 2015) .................................................................................................23

14 Pac. Bell Tel. Co. v. linkLine Comm’cns, Inc.,


555 U.S. 438 (2009) ...........................................................................................................16, 17
15
In re Packaged Seafood Prods. Antitrust Litig.,
16 242 F. Supp. 3d 1033 (S.D. Cal. 2017) ....................................................................................25
17 Queen City Pizza, Inc. v. Domino’s Pizza, Inc.,
124 F.3d 430 (3d Cir. 1997).......................................................................................................9
18

19 Relevent Sports, LLC v. U.S. Soccer Fed’n, Inc.,


2020 WL 4194962 (S.D.N.Y. July 20, 2020) ..........................................................................22
20
Reveal Chat Holdco, LLC v. Facebook, Inc.,
21 471 F. Supp. 3d 981 (N.D. Cal. 2020) .....................................................................................18
22 Sambreel Holdings LLC v. Facebook, Inc.,
906 F. Supp. 2d 1070 (S.D. Cal. 2012) ....................................................................................22
23
Sayre v. Google, Inc.,
24
2019 WL 6036703 (N.D. Cal. Nov. 14, 2019) ........................................................................21
25
SC Manufactured Homes, Inc. v. Liebert,
26 76 Cal. Rptr. 3d 73 (Ct. App. 2008) ..................................................................................23, 24

27 Sidibe v. Sutter Health,


4 F. Supp. 3d 1160 (N.D. Cal. 2013) .......................................................................................13
28
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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Sprewell v. Golden State Warriors,


1 266 F.3d 979 (9th Cir. 2001) .....................................................................................................8
2
Streamcast Networks, Inc. v. Skype Tech., S.A.,
3 547 F. Supp. 2d 1086 (C.D. Cal. 2007) .............................................................................10, 11

4 Stubhub, Inc. v. Golden State Warriors, LLC,


2015 WL 6755594 (N.D. Cal. Nov. 5, 2015) ..........................................................................11
5
Tanaka v. Univ. of S. Cal.,
6 252 F.3d 1059 (9th Cir. 2001) ...................................................................................................9
7 Thomas v. Network Sols., Inc.,
8 176 F.3d 500 (D.C. Cir. 1999) .................................................................................................19

9 Toscano v. Prof’l Golfers Ass’n,


258 F.3d 978 (9th Cir. 2001) ...................................................................................................22
10
UGG Holdings, Inc. v. Severn,
11 2004 WL 5458426 (C.D. Cal. Oct. 1, 2004) ...........................................................................10
12
Unigestion Holdings, S.A. v. UPM Tech., Inc.,
13 412 F. Supp. 3d 1273 (D. Or. 2019) .................................................................................19, 21

14 Valet Apt. Servs., Inc. v. Atl. J. & Const.,


865 F. Supp. 828 (N.D. Ga. 1994) ...........................................................................................20
15
VBR Tours, LLC v. Natl. R.R. Passenger Corp.,
16 2015 WL 5693735 (N.D. Ill. Sept. 28, 2015) ..........................................................................19
17 Verizon Commc’ns Inc. v. Law Offs. of Curtis V. Trinko, LLP,
18 540 U.S. 398 (2004) ......................................................................................................... passim

19 STATUTES

20 Cartwright Act, Cal. Bus. & Prof. Code § 16700 et seq. .........................................................23, 24

21 Sherman Act § 1..................................................................................................................... passim


22 Sherman Act § 2..................................................................................................................... passim
23 Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. .........................................24, 25
24
RULES
25
Federal Rule of Civil Procedure 12(b)(6) ........................................................................................7
26

27

28
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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OTHER AUTHORITIES
1
Phillip E. Areeda & Herbert Hovencamp, Antitrust Law (5th ed. 2020) ................................18, 19
2

3
4

9
10

11

12

13

14

15
16

17

18

19

20

21

22

23

24

25

26

27

28
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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1 NOTICE OF MOTION AND MOTION

2 PLEASE TAKE NOTICE that on March 9, 2021, at 2:00 P.M., or as soon thereafter as

3 this matter may be heard, in the United States District Court for the Northern District of

4 California, Oakland Federal District Courthouse, Courtroom 1, 4th Floor, at 1301 Clay Street,

5 Oakland, CA 94612, before the Hon. Yvonne Gonzalez Rogers, Defendant Apple Inc. (“Apple”)

6 will and hereby does move the Court to dismiss Plaintiff John Pistacchio’s Complaint

7 (Pistacchio v. Apple Inc., No. 4:20-cv-07034-YGR, (Dkt. No. 1)) for failure to state a claim upon

8 which relief can be granted. This Motion is supported by this Notice of Motion and Motion; the

9 accompanying Memorandum of Points and Authorities; the accompanying Request for Judicial

10 Notice; the [Proposed] Order filed herewith; the pleadings and papers on file herein; and such

11 other matters that may be presented to the Court at the hearing.

12 RELIEF SOUGHT

13 Apple seeks an order dismissing Plaintiff’s Complaint for failure to state a claim upon

14 which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

15 MEMORANDUM OF POINTS AND AUTHORITIES

16 ISSUES TO BE DECIDED

17 Has Plaintiff failed to plead that the “iOS Subscription-Based Mobile Gaming Services”

18 is a plausible antitrust market, requiring dismissal of all antitrust-based counts?

19 Has Plaintiff failed to plead monopoly power or anticompetitive conduct, subjecting both

20 his monopoly-maintenance and essential-facilities claims (Count 1 and Count 2) to dismissal?

21 Does Plaintiff, as a consumer, have standing to bring an essential-facility claim (Count

22 2)? Has Plaintiff otherwise failed to allege an actionable denial of essential-facility claim?

23 Has Plaintiff alleged only unilateral conduct, not concerted action, requiring dismissal of

24 the Sherman Act Section 1 claim (Count 3)?

25 Should Plaintiff’s California Cartwright Act claim (Count 4) and Unfair Competition

26 Law claim (Count 5) fail for the same reasons as his federal claims?

27 Should Plaintiff’s California unjust enrichment claim (Count 6) be dismissed because

28 Plaintiff has failed to plead a claim based in contract?


DEFENDANT’S’ MOTION TO DISMISS PLAINTIFF’S COMPLAINT
CASE NO. 4:20-cv-07034-YGR

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1 PRELIMINARY STATEMENT

2 On October 8, 2020, Plaintiff John Pistacchio filed this class action as a follow-on to the

3 App Store antitrust cases already before the Court, attempting to carve out a competing class of

4 iOS end-users who subscribe to Apple Arcade—which Plaintiff characterizes as a subscription

5 mobile gaming service that launched in September 2019. Yet from its very first paragraphs, the

6 Complaint describes a video game industry that is thriving by any metric. The industry is

7 expected to generate just under $160 billion in revenue in 2020. Complaint, ECF No. 1

8 (“Compl.”) ¶ 1. The mobile gaming segment alone generated more than $49 billion in 2019. Id.

9 ¶ 2. This success is reflected on Apple’s iOS devices—iPhones and iPads—as well. There are

10 more than 900,000 mobile games on Apple’s App Store, many of which are available to

11 consumers free of charge. Id. ¶¶ 36, 24. And consumers downloaded more than three billion

12 iOS games in the first quarter of 2020. Id. ¶ 2. In short, Plaintiff describes a robust environment

13 of consumer choice, new entrants, thriving competition, and emerging business models. Plaintiff

14 even admits that competitors like Microsoft, Facebook, Google, and Nvidia all began offering

15 subscription gaming services after Apple launched Arcade.

16 Against this incredible backdrop of choice, innovation, and competition in the video

17 game industry, Plaintiff attempts to stake a flag all his own in a little corner of the broader App

18 Store actions by implausibly alleging that Apple’s innovative subscription service, Apple

19 Arcade, is a monopoly. The Complaint should be dismissed for the following reasons.

20 First, all of Pistacchio’s antitrust-based claims should be dismissed for failure to allege a

21 plausible relevant market. At the heart of Pistacchio’s Complaint, Plaintiff alleges that Apple

22 has “monopolized” a gerrymandered market defined by not only a single firm—Apple—but also

23 by a single product offered by Apple—Apple Arcade—using a specific business model—iOS

24 subscription-based mobile gaming. His novel single-firm, single-product, single-business-model

25 “market” is defined not by its features, or the way it competes with the many other games in the

26 market, but by the way that users pay for it: a subscription fee. Courts have uniformly rejected

27 markets defined by the method of payment for or delivery of a product. Furthermore, the

28 market-definition allegations are based on bare legal conclusion without the kind of factual
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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1 allegations necessary to avoid dismissal.

2 Second, Plaintiff fails to allege a claim for monopolization or denial of essential facilities

3 under Section 2 of the Sherman Act (Counts 1 and 2). The restriction Plaintiff complains about

4 is a species of a duty-to-deal claim that courts have uniformly rejected. Plaintiff admits that

5 developers, including Microsoft, Facebook, and Google, have multiple ways to offer their

6 subscription game services to iOS customers. Plaintiff takes the novel and unprecedented legal

7 position that Apple had an obligation to offer these services their preferred technical and

8 contractual terms on the App Store. Specifically, Plaintiff claims that Apple was obligated to

9 allow competitors to offer an app on the App Store where games are streamed through the

10 Internet or offered through a separate store-like interface, rather than downloaded individually.

11 The Supreme Court has rejected such a theory. Apple is under no obligation to offer its

12 competitors their desired commercial or technical terms. And the Complaint admits that Apple

13 changed its App Review Guidelines to permit subscription and streaming services on the App

14 Store. These counts must also be dismissed for failure to allege monopoly power through

15 plausible direct or circumstantial evidence. And Plaintiff, as a consumer, is barred from

16 pursuing an essential-facilities claim.

17 Third, Plaintiff’s Section 1 claim (Count 3) also fails. There is no allegation of concerted

18 conduct. Plaintiff alleges, at absolute most, mere acquiescence to terms of service—something

19 courts have consistently found to fail the Section 1 standard. Finally, Plaintiff’s derivative state-

20 law claims (Counts 4, 5, and 6) fail for many of the same reasons as his antitrust claims fail, as

21 they are predicated on the same facts or otherwise deficient on the law.

22 PLAINTIFF’S ALLEGATIONS

23 Video games are a multi-billion dollar industry, expected to generate $160 billion in

24 revenue in 2020. Compl. ¶ 1. 1 The mobile gaming segment of this larger industry was “small”

25 and limited to a “handful of humble mobile games” until 2008. Id. ¶ 31. Apple’s introduction of

26 the App Store “heralded a new era in mobile gaming.” Id. ¶ 32. “Through the App Store,

27 1
Allegations in Plaintiff’s complaint are stated herein solely for purposes of this motion to
28 dismiss. Apple does not admit the truth of any of Plaintiff’s allegations.
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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1 mobile game developers could sell their games to consumers, rather than being forced to first sell

2 their games to phone carriers as they had in the past.” Id. Twelve years later, the App Store

3 offers offer more than 900,000 third-party mobile games, many of them free. Id. ¶¶ 24, 36. And

4 in the first quarter of 2020, more than 3 billion games were installed on Apple “iOS,” including

5 iPhones and iPads. Id. ¶ 2. The “new era” ushered in by the App Store has resulted in

6 tremendous growth, as the mobile gaming segment generated about $49 billion in revenue in

7 2019. Id. ¶¶ 2, 32.

8 Apple released Apple Arcade just over a year ago, in September 2019. Id. ¶ 4. By

9 Plaintiff’s own description, Arcade is a special section of the App Store. Consumers can choose

10 to pay a $4.99 monthly fee, which gives them access to 100 or so unique game apps. Id. ¶¶ 43–

11 45. There are no advertisements and no in-app purchases in Arcade games, and the games

12 cannot be purchased individually without a subscription. Id. ¶ 44.

13 Arcade games are just one part of the multi-billion-dollar video gaming industry. And

14 the future for Arcade is still relatively small and unproven. Plaintiff alleges that “there are at

15 least 1 billion gaming iOS users.” Id. ¶ 62. And what about the “monopoly” of Apple Arcade?

16 Plaintiff alleges Apple is projected to have only 12 million Apple Arcade subscribers by the end

17 of 2020. Id. ¶ 106. And these are just projections. Plaintiff admits that Apple Arcade is not yet

18 a success: “Apple stands to lose millions if Apple Arcade is not successful.” Id. ¶ 107

19 (emphasis added).

20 In order to access Arcade games, the customer must download each game through the

21 App Store onto his or her iPhone or iPad—just like any other app. Plaintiff admits this:

22 customers “download Apple Arcade games from the App Store directly to their devices and

23 access them at any time, including offline.” Id. ¶ 44. Apple Arcade games are not accessed

24 through a single app as a “library” or a “catalog” app, nor are they streamed through the Internet

25 as “game streaming service.” Compare id. ¶¶ 52, 90 (describing Microsoft xCloud as a

26 “catalog” and “cloud gaming” app).

27 The App Store is “a digital marketplace which allows third-party programmers to sell

28 their apps for the iPhone and other Apple iOS devices, such as the iPad.” Id. ¶ 23. Apple’s App
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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1 Store Review Guidelines apply to each developer that wants to distribute an app through the App

2 Store, including Arcade games. Id. ¶ 59; see also Declaration of Meredith R. Dearborn in

3 Support of Defendant’s Motion to Dismiss and Request for Judicial Notice, Exhibit A (App

4 Store Review Guidelines) (hereinafter, “Guidelines”). 2

5 Apple’s Guidelines permit game subscription and game streaming services. Compl. ¶¶

6 89, 101 (“Apple has recently updated its Guidelines to expressly permit game streaming

7 services”). First, iOS users may access and play third-party games via a web browser on an iOS

8 device, such as Safari or Chrome. Those games are available on iPhones and iPads, and do not

9 need to be downloaded through the App Store at all. As Apple writes in its Guidelines, in Rule

10 4.9, designed to allow streaming games, “Of course, there is always the open Internet and web

11 browser apps to reach all users outside of the App Store.” Guidelines § 4.9. Plaintiff

12 acknowledges that this Guideline permitted gaming catalog apps as of September 2020, before

13 he filed his Complaint. Compl. ¶ 103.

14 Second, developers seeking to offer subscription gaming services are welcome in the

15 App Store if they can be downloaded one at a time through the App Store. Guidelines § 4.9

16 (“Streaming games are permitted so long as they adhere to all guidelines — for example, each

17 game update must be submitted for review, developers must provide appropriate metadata for

18 search, games must use in-app purchase to unlock features or functionality, etc.”); Guidelines §

19 3.1.2 (“Subscriptions: Apps may offer auto-renewing in-app purchase subscriptions, regardless

20 of category on the App Store.”). This is exactly how Arcade works. Compl. ¶ 44. And

21 Guideline § 4.7 provides an additional avenue that allows game developers to reach iOS

22 customers: it says that, if “code distribution isn’t the main purpose of the app,” Apple permits

23
2
24 As explained in further detail in the concurrently filed Defendant’s Request for Judicial Notice
in Support of Defendant’s Motion to Dismiss John Pistacchio’s Class Action Complaint, Apple
25 respectfully requests that this Court take judicial notice of the Guidelines based on their
“incorporation-by-reference” into Plaintiff’s Complaint, as Plaintiff repeatedly quotes or refers to
26 the Guidelines, but does not attach them to his Complaint, and the Guidelines form the basis of
27 Plaintiff’s claims. See, e.g., Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012);
Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018); Hicks v. PGA Tour, Inc.,
28 897 F.3d 1109 (9th Cir. 2018).
DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:
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1 HTML5-based games and other apps that “contain or run code that is not embedded in the

2 binary” (in other words, apps that run software code that is not contained in the app itself),

3 subject to restrictions similar to those elsewhere in the App Store. Guidelines § 4.7; see also

4 Compl. ¶¶ 87, 99 (citing this rule). This is yet another technical way for a game developer to

5 release a game catalog on iOS devices.

6 Thus, Microsoft, Google, Facebook, and other game developers are welcome to launch a

7 streaming or subscription game service in the App Store. Those services just must operate like

8 Arcade, where standalone games are downloaded one at a time through the App Store. Id. ¶ 44.

9 Notably, Plaintiff does not attempt to allege that Apple blocks all subscription gaming services

10 from the App Store; he alleges that some “have been approved.” Id. ¶ 110. Instead, Plaintiff’s

11 complaint is merely that the Guidelines require “[g]ames offered in a streaming game service

12 subscription must be downloaded directly from the App Store.” Id. ¶ 89. He complains that this

13 requirement is not “convenient” for users or developers. Id.; see also id. ¶ 110 (alleging that

14 developers “are forced to offer inferior user experience”); id. ¶ 114 (claiming that downloading

15 individual games is a “bad experience”).

16 “Shortly” after Apple’s September 2019 launch of Apple Arcade, Microsoft, Facebook,

17 and Google released subscription gaming services of their own. Id. ¶¶ 4, 43–52. Plaintiff does

18 not allege that any of these services existed before Arcade. These services are different from

19 Arcade: they are “streaming” or “cloud-based” services. Id. ¶¶ 46–47, 52, 99. This means that

20 games are not downloaded individually from the App Store, as Arcade games are, but instead

21 streamed from the Internet. Id. ¶¶ 47, 52, 99; compare id. ¶ 44. Plaintiff claims that Microsoft,

22 Google, and Facebook did not want “each game to be downloaded individually from the App

23 Store” as opposed to be downloaded directly through a “catalog app,” again, because they

24 believed that downloading through the App Store was not “convenient” for users. Id. ¶¶ 89, 90,

25 99, 101, 102, 103, 110.

26 Plaintiff does not, and cannot, allege that Apple made it harder for competing

27 subscription gaming services to launch after Arcade. To the contrary, Apple’s policies were

28 longstanding and consistent in requiring apps to be downloaded from the App Store. See id. ¶
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1 44. Rather, he alleges that Apple made it easier. Following the launch of Apple Arcade, Apple

2 recently changed its Guidelines to permit some types of streaming services in Guideline 4.9. 3 Id.

3 ¶¶ 101, 103.

4 Facebook, Microsoft, Nvidia, and Google subscription gaming services are widely

5 available to users through other platforms, including other mobile platforms. For example,

6 Microsoft launched “its subscription-based mobile gaming service for a number of platforms,

7 excluding Apple’s App Store,” on August 6, 2020. Id. ¶ 94. Facebook users can play Facebook

8 Gaming on Android. Id. ¶ 96. And Plaintiff further admits that the alleged competitors

9 generally priced their products at exactly the same level as Apple Arcade: $4.99 per month or

10 higher. Id. ¶¶ 47, 50 (alleging that Stadia’s paid tier costs $9.99 per month and Facebook

11 Gaming costs $4.99 per month).

12 In short, Plaintiff, who is a consumer—not a game developer—does not allege (nor could

13 he) that these other gaming services ceased to exist entirely, or left the marketplace for gaming

14 services, as a result of Apple’s conduct. He also does not allege that these services were

15 prevented from reaching (or being accessed by) any customers, even iOS customers, including

16 by releasing versions of their services where games were downloaded individually from the App

17 Store or releasing Web browser versions of their products. And he does not allege that Arcade

18 has lessened the number of games available, on any platform, to him and other consumers.

19 ARGUMENT

20 I. LEGAL STANDARD

21 To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a

22 complaint must contain sufficient factual matter “to ‘state a claim to relief that is plausible on its

23
3
24 Plaintiff claims that Arcade “violated existing guidelines,” Compl. ¶ 85, quoting an interview
with former Apple employee Philip Shoemaker, who was in turn quoted in a House Staff Report.
25 Despite having access to the publicly available Guidelines, Plaintiff does not show how Arcade
“violates” any Guideline at all. Moreover, as one court noted recently, the House Staff Report is
26 not conclusive; it is “not a binding precedent; nor does it purport to be a judicial determination,”
27 nor does it even represent the views of the House Committee of the Judiciary or any of its
members.” Blix Inc. v. Apple, Inc., C.A. No. 19-1869-LPS, 2020 WL 7027494, at *14 (D. Del.
28 Nov. 30, 2020).
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1 face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

2 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content

3 that allows the court to draw the reasonable inference that the defendant is liable for the

4 misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Applying this standard is a

5 “context-specific task that requires the reviewing court to draw on its judicial experience and

6 common sense.” Id. at 679. The Court need not “accept as true allegations that contradict

7 matters properly subject to judicial notice.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055

8 (9th Cir. 2008) (internal quotation marks and citation omitted). “Nor is the court required to

9 accept as true allegations that are merely conclusory, unwarranted deductions of fact, or

10 unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

11 II. PLAINTIFF FAILS TO ALLEGE A PLAUSIBLE PRODUCT MARKET.

12 Plaintiff’s allegations about the relevant product market comprise a single paragraph of

13 the Complaint. Compl. ¶ 56. In full, that paragraph provides:

14 The relevant market is the market for subscription-based mobile gaming services on
iOS devices (the “iOS Subscription-Based Mobile Gaming Services Market”), This
15 market is comprised of a single distribution channel, the App Store, which is the only
way that iOS users may access subscription-based mobile gaming services.
16

17 Id. All four of his antitrust counts are premised on this market definition. Id. ¶ 143 (Count 1);

18 id. ¶ 150 (Count 2); id. ¶ 164 (Count 3); id. ¶ 173 (Count 4).

19 The product market alleged in the Complaint is insufficiently pleaded and implausible.

20 All of Plaintiff’s antitrust claims fail as a result. Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1120–

21 23 (9th Cir. 2018) (affirming dismissal of antitrust claims premised on implausibly narrow

22 product markets); hiQ Labs, Inc. v. LinkedIn Corp., No. 17-cv-03301-EMC, 2020 WL 5408210,

23 at *6 (N.D. Cal. Sept. 9, 2020) (“[T]he relevant market must still be plausibly alleged to make it

24 past a 12(b)(6) challenge.”); Analogix Semiconductor, Inc. v. Silicon Image Inc., No. C 08–2917

25 JF (PVT), 2008 WL 8096149, at *7 (N.D. Cal. Oct. 28, 2008) (“A proper definition of the

26 relevant market is required for a successful claim under either Section 1 or Section 2 of the

27 Sherman Act.”).

28 A product market “must encompass the product at issue as well as all economic
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1 substitutes for the product.” Hicks, 897 F.3d at 1120 (internal quotations and citation omitted).

2 To define the parameters of the relevant market, plaintiffs should reference “the reasonable

3 interchangeability of use or the cross-elasticity of demand between the product itself and

4 substitutes for it.” hiQ Labs, 2020 WL 5408210, at *6 (quoting Newcal Indus. v. Ikon Office

5 Sol., 513 F.3d 1038, 1045 (9th Cir. 2008)). “Interchangeability” means that “one product is

6 roughly equivalent to another for the use to which it is put.” Queen City Pizza, Inc. v. Domino’s

7 Pizza, Inc., 124 F.3d 430, 437 (3d Cir. 1997). This analysis ensures that the relevant market

8 “encompasses the group or groups of sellers or producers who have actual or potential ability to

9 deprive each other of significant levels of business.” Hicks, 897 F.3d at 1120 (internal

10 quotations and citation omitted). An antitrust complaint is facially unsustainable where plaintiffs

11 have failed to identify relevant potential substitutes and explain why they are not economic

12 substitutes. Id. at 1123 (“[P]roposed product markets are facially unsustainable because they fail

13 to include many reasonably interchangeable products.” (internal quotation and citation omitted));

14 see also Golden Gate Pharm. Services, Inc. v. Pfizer, Inc., No. C–09–3854 MMC, 2010 WL

15 1541257, at *2 (N.D. Cal. Apr. 16, 2010), aff’d, 433 F. App’x 598 (9th Cir. 2011) (stating that

16 dismissal is required where the plaintiff fails to define the “relevant market with reference to the

17 rule of reasonable interchangeability and cross-elasticity of demand, or alleges a proposed

18 relevant market that clearly does not encompass all interchangeable substitute products”)

19 (internal quotations and citation omitted). In this inquiry, the Court may draw upon its “judicial

20 experience and common sense” and reject a market definition that is “not natural” or “contorted

21 to meet [Plaintiff’s] litigation needs.” Hicks, 897 F.3d at 1121.

22 Plaintiff alleges in a conclusory fashion that there are “no reasonably interchangeable

23 services” for Arcade. Compl. ¶¶ 143, 164. Plaintiff makes no allegations about cross-elasticity

24 of demand, reasonable interchangeability, nor does he allege that consumers would not switch

25 away from Apple Arcade even if Apple increased Arcade’s price. The conclusory recitations—

26 unsupported by any allegation in the complaint—are insufficient to state a claim. See Twombly,

27 550 U.S. at 556; Tanaka v. Univ. of S. Cal., 252 F.3d 1059, 1063–65 (9th Cir. 2001) (affirming

28 dismissal of complaint containing conclusory allegations as to why UCLA women’s soccer


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1 program is not interchangeable with other Los Angeles programs).

2 Plaintiff also does not explain why obvious substitutes for subscription games on iOS

3 should be excluded. Common-sense available substitutes include subscription-based mobile

4 gaming services offered through an Internet browser or a remote desktop on iOS devices. See

5 Guidelines § 4.9. And they include games offered on Android, on gaming consoles, and on Mac

6 or other personal computers. Compl. ¶¶ 94, 96. Other available substitutes even include other

7 games offered for free or for a low price in the App Store, including the more than 900,000 third-

8 party game apps available through the App Store. Id. ¶ 36. By failing to allege any facts

9 addressing demand for Arcade in contrast to the demand for other gaming products, the

10 Complaint does not define the proposed market by reference to reasonable interchangeability or

11 cross-elasticity of demand. See Streamcast Networks, Inc. v. Skype Tech., S.A., 547 F. Supp. 2d

12 1086, 1094–96 (C.D. Cal. 2007) (dismissing complaint due to failure to allege why FastTrack

13 P2P file sharing services are not reasonably interchangeable with P2P file sharing services);

14 UGG Holdings, Inc. v. Severn, No. CV 04–1137–JFW (FMOx), 2004 WL 5458426, at *4 (C.D.

15 Cal. Oct. 1, 2004) (failing to allege why sheepskin, fleece-lined boot market is distinct from

16 other boot markets); LAI v. USB-Implementers Forum, Inc., CV 14-05301-RGK (PJWx), 2014

17 WL 12600969, at *5 (C.D. Cal. Nov. 21, 2014) (failing to justify why reversible USB connectors

18 were not “reasonably interchangeable” with one-way USB connectors).

19 These common-sense substitutes are apparent on the face of the Complaint, which

20 describes a thriving video gaming industry, in which consumers have hundreds upon thousands

21 of choices. According to Plaintiff, video games have become “a multi-billion-dollar industry

22 expected to generate $159.3 billion in revenue in 2020 alone.” Compl. ¶ 1. And within the

23 video gaming industry, Plaintiff alleges that mobile gaming “has grown into one of the largest

24 segments of the gaming market, generating about $49 billion in revenue in 2019, approximately

25 60% of the revenue for the global video game market that year.” Id. ¶ 2. Over the last decade,

26 the number of consumers purchasing mobile games in the United States, which was 80.7 million

27 in 2011, has almost tripled. Id. ¶ 33. Even within the App Store, Plaintiff acknowledges that

28 over 900,000 mobile games are available for play, many for free. Id. ¶¶ 24, 36. Against this
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1 backdrop, an allegation of a distinct antitrust market that consists of a single product, defined by

2 the way users pay for it, is implausible. See, e.g., In re German Auto. Mfrs. Antitrust Litig.,

3 MDL No. 2796 CRB (JSC), 2020 WL 6274806, at *7 (N.D. Cal. Oct. 23, 2020) (stating that the

4 relevant product market defined as diesel passenger vehicles implausible because it “defies

5 common sense to assert that other vehicles, including other purportedly environmentally friendly

6 vehicles” are not substitutes); Hicks, 897 F.3d at 1121 (finding that the relevant product market

7 “not natural” and “contorted to meet [Plaintiff’s] litigation needs”).

8 Plaintiff’s statement that the App Store is the “only way that iOS users may access

9 subscription-based mobile gaming services” is also flatly contradicted by his own Complaint. As

10 noted above, he ignores a readily available option that consumers have for accessing

11 subscription-based mobile gaming services on any given device, including an iOS device like an

12 iPhone or iPad: the Internet. Any iOS device owner can use web-based access as a substitute for

13 app-based access. And game developers are invited by Apple to make whatever games they

14 want to make available through Safari or other web browsers to iOS customers. Guidelines §

15 4.9. Just as eBay, Netflix, Airbnb, OpenTable, Amazon, and a host of other services can be

16 accessed via an app or through the web via any device’s Internet browser, so too can

17 subscription-based mobile gaming services. See Stubhub, Inc. v. Golden State Warriors, LLC,

18 No. C 15-1436 MMC, 2015 WL 6755594, at *4 (N.D. Cal. Nov. 5, 2015) (dismissing antitrust

19 claims based on a theory that two separate product markets existed for tickets purchased by a

20 “primary” supplier and tickets purchased secondhand). And subscription game developers can

21 also access iOS customers by submitting each game to App Review and downloading each one

22 through the App Store, just as every single game through Arcade does. Guidelines § 3.1.2.

23 At most, Plaintiff has identified one relatively untested model for making games

24 available to consumers—i.e., via subscription. Compl. ¶ 38 (describing the subscription services

25 model as merely gaining traction); id. ¶¶ 43–44 (describing certain Arcade features); id. ¶ 107

26 (alleging Arcade is not yet successful). These bare allegations are insufficient to establish that

27 the product belongs in its own antitrust market. See Streamcast Networks, 547 F. Supp. 2d at

28 1095 (concluding that while FastTrack P2P “possesses some unique attributes” that may make it
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1 more “attractive and efficient,” complaint failed to explain why consumers would not switch to

2 other P2P applications if there was even a nominal price change); Hicks, 897 F.3d at 1122

3 (finding allegations that the “in-play” golf advertising market was “more effective” and appealed

4 to “smaller” customers failed to state a cognizable product market because despite potential

5 benefits, the plaintiff pleaded no facts as to why a distinct group of golf fans existed that only

6 consumed “in-play” golf advertisements).

7 In fact, at bottom, Plaintiff attempts to define a market by how customers pay for

8 games—via a monthly subscription fee. Compl. ¶¶ 38–40. But courts “routinely recognize that

9 otherwise identical products are not in separate markets simply because consumers pay for those

10 products in different ways.” Fed. Trade Commc’n v. Lab’y Corp. of Am., 2011 WL 3100372, at

11 *18 (C.D. Ca. Mar. 11, 2011); Little Rock Cardiology Clinic PA. v. Baptist Health, 591 F.3d 591,

12 597 (8th Cir. 2009) (finding that defining a market based on “how consumers pay . . . lacks

13 support in both logic and law”). There is robust competition for games, and Plaintiff’s myopic

14 focus on Arcade’s subscription payment plan does not an antitrust market make.

15 III. PLAINTIFF’S MONOPOLIZATION CLAIMS FAIL ON OTHER GROUNDS.

16 To establish liability under Section 2, a plaintiff must prove: (1) the possession of

17 monopoly power in the relevant market; (2) the willful acquisition or maintenance of that power;

18 and (3) causal antitrust injury. See Fed. Trade Commc’n v. Qualcomm Inc., 969 F.3d 974, 990

19 (9th Cir. 2020). Possession of monopoly power, standing alone, is not unlawful “unless it is

20 accompanied by an element of anticompetitive conduct.” Id. (emphasis in original) (internal

21 quotations and citation omitted). Plaintiff must show “anticompetitive abuse or leverage of

22 monopoly power, or a predatory or exclusionary means of attempting to monopolize the relevant

23 market.” Id. (internal quotations and citation omitted). Here, Pistacchio fails to allege monopoly

24 power, and he challenges only lawful conduct.

25 A. Plaintiff Fails To Plead that Apple Has Monopoly Power.

26 Monopoly power is “the power to control prices or exclude competition.” United States

27 v. Grinnell Corp., 384 U.S. 563, 571 (1966). A plaintiff “may demonstrate market power either

28 by direct evidence (for example, evidence of restricted output and supracompetitive prices) or by
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1 circumstantial evidence.” Sidibe v. Sutter Health, 4 F. Supp. 3d 1160, 1180 (N.D. Cal. 2013).

2 To demonstrate market power by circumstantial evidence, the plaintiff must: “(1) define the

3 relevant market, (2) show that the defendant owns a dominant share of that market, and (3) show

4 that there are significant barriers to entry and show that existing competitors lack the capacity to

5 increase their output in the short run.” Id. (internal quotations and citation omitted).

6 Plaintiff does not allege sufficient facts to show direct evidence of monopoly power. See,

7 e.g., id. (“Plaintiffs’ conclusory allegations do not establish direct evidence of market power.”).

8 The allegations he does make renders such a claim implausible. First, the Complaint alleges that

9 Apple Arcade is a new venture, with projections of only 12 million users by the end of 2020

10 compared to over one billion gaming iOS users. Compl. ¶¶ 62, 106.

11 Second, Plaintiff pleads no direct evidence of restricted output. Instead, he relies on the

12 conclusory allegation that “Apple has restricted the output of iOS-compatible subscription-based

13 mobile gaming services.” Id. ¶ 112. This bare recitation fails the Twombly standard. It is also

14 fatally undermined by his own allegations. He acknowledges that Apple’s Guidelines “expressly

15 permit game streaming services.” Id. ¶ 101. Plaintiff also does not address the fact that iOS

16 users can access subscription-based gaming services through web browsers, like Safari or

17 Chrome. Guidelines § 4.9.

18 Plaintiff alleges that the App Store is a “walled garden” and that Apple pre-installs it on

19 iOS devices. Compl. ¶¶ 59–60. These allegations do not demonstrate that Apple’s control over

20 its own store has actually restricted output in the markets alleged here, or restricted choice

21 available to gaming consumers. E.g., Abid v. Google LLC, Case No. 18-cv-00981-MEJ, 2018

22 WL 3458546, at *5 (N.D. Cal. July 18, 2018) (“Plaintiff undermines his own allegation by

23 alleging that Google maintains a ‘near monopoly’ while elsewhere acknowledging various other

24 on-line advertising platforms, such as ‘Microsoft Bing’ and ‘Facebook ads.’”). And any claim of

25 restricted output is contradicted by the fact that every single one of the alleged subscription

26 gaming competitors entered the market after Apple Arcade, and there is no allegation whatsoever

27 that they have become unavailable to consumers as a result of Apple’s conduct. See Compl. ¶¶

28 43–53.
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1 Plaintiff also fails to plead that the price for Apple Arcade was supracompetitive. Blix

2 Inc. v. Apple, Inc., C.A. No. 19-1869-LPS, 2020 WL 7027494, at *6 (D. Del. Nov. 30, 2020)

3 (dismissing complaint for failing to allege more than conclusory allegations to support

4 supracompetitive prices). His only allegations are bare legal conclusions. Compl. ¶ 7 (“Plaintiff

5 has been forced to pay supracompetitive prices for Apple Arcade”); see also id. ¶¶ 15, 110, 130,

6 131. And again, Pistacchio’s own Complaint shows that the $4.99 price that he allegedly paid

7 for Arcade is exactly in line with, or lower than, that of the other subscription gaming services

8 that entered the market after Apple. See id. ¶ 47 (alleging that Google Stadia’s paid tier, which

9 like Arcade allows access to Stadia across multiple devices, costs $9.99); id. ¶ 50 (stating that

10 Facebook Gaming costs $4.99). There is no plausible inference that the $4.99 per month that

11 Plaintiff paid for Arcade was inflated. See Blix Inc., 2020 WL 7027494, at *6 (dismissing

12 allegations of direct market power, stating that although “Blix’s Complaint asserts several times

13 that Apple charges ‘supracompetitive prices,’ it does not plead any facts to support this

14 assertion”).

15 Nor does Plaintiff allege facts showing a circumstantial basis of monopoly power. As to

16 the first element—the relevant market—Plaintiff’s claims fail for the reasons identified above.

17 As to the second element—market share—Plaintiff fails to identify Apple’s share of the

18 “subscription gaming services market.” See Blix Inc., 2020 WL 7027494, at *6 (“[A]s pled here,

19 Apple’s market share is a ‘necessary fact[ ]’ Blix must plead to plausibly allege Apple’s

20 monopoly power with indirect evidence.” (second alteration in original)). Instead, Plaintiff

21 recognizes that Apple Arcade is a new, untested product, which has yet to achieve significant

22 market share by any reasonable measure. Compl. ¶¶ 54, 106 (alleging that there will be an

23 estimated 1.2 percent of iPhone and iPad users subscribed to Arcade by the end of 2020).

24 As to the third element—significant barriers to entry and competitors’ inability to

25 increase output—Plaintiff fails to allege either. Instead, his allegations show that competitors

26 can enter the market by following Apple’s Guidelines or by launching on Safari or Chrome on

27 iOS, and may thereby gain access to iOS users. Id. ¶ 79; Guidelines § 4.9. There is no allegation

28 that any user is required to use Arcade to the exclusion of other subscription gaming services, so
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1 long as those services follow the same rules as Arcade: a la carte downloading of game apps.

2 See, e.g., Khalid v. Microsoft Corp., 409 F. Supp. 3d 1023, 1033 (W.D. Wash. 2019) (finding

3 that plaintiff failed to plead circumstantial evidence of market power because he “provided no

4 market analysis such as barriers to entry or hyper-competitive pricing that inhibits competitors

5 from expanding their output in the cloud application market or the other identified markets”).

6 Finally, the fact that Apple changed its policies to allow competing subscription-based mobile

7 gaming services on the App Store, as Plaintiff alleges, see Compl. ¶ 101, undercuts Plaintiff’s

8 arguments of market power. And the fact that all of the competitors entered the market after

9 Apple’s conduct allegedly began and after Apple initially launched Arcade demonstrates low

10 barriers to entry, not the opposite.

11 B. Plaintiff Has Failed to Plead Anticompetitive Conduct; Instead, He Merely


Alleges that Apple Did Not Offer its Alleged Competitors their Preferred
12 Technical Terms.
13 Plaintiff fails to allege “anticompetitive conduct,” that is, “the willful acquisition or
14 maintenance of” monopoly power “as distinguished from growth or development as a
15 consequence of a superior product, business acumen, or historic accident.” Verizon Commc’ns
16 Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004). Failure to allege
17 anticompetitive conduct plausibly is cause for dismissal. See Blix Inc., 2020 WL 7027494, at
18 *7–*8 (dismissing plaintiff’s Section 2 claims for failing to plausibly plead anticompetitive
19 conduct).
20 Plaintiff has not claimed, and cannot claim, that Apple denies access to iOS for
21 competing games and subscription gaming services. These games and services have access to
22 iOS. Plaintiff admits as much. He acknowledges that the Guidelines expressly allow catalog
23 apps. See Guidelines § 3.1.2. And game subscription services can also be accessed through a
24 web browser from an iOS device. See Guidelines § 4.9.
25 Plaintiff also does not and cannot complain that Apple tightened any restrictions in
26 reaction to subscription gaming competition. Instead, he admits that Apple loosened the
27 Guidelines in September 2020 to be even more permissive to a wider variety of business models
28 for subscription game services. Compl. ¶ 101 (“Apple has recently updated its Guidelines to
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1 expressly permit game streaming services such as Stadia and Microsoft xCloud”).

2 Instead, Pistacchio complains that Apple does not allow subscription-based mobile

3 gaming services to compete in their preferred way—through cloud-based streaming of games, or

4 a catalog app allowing direct downloading through that app. Id. ¶¶ 46–53, 99 (claiming that

5 Apple blocked Facebook Gaming, Stadia, and xCloud because they were “cloud based”

6 streaming apps, rather than cataloguing apps to be downloaded individually through the App

7 Store); id. ¶ 103 (alleging that catalog apps allowed, just without downloading games directly

8 from the catalog app). This theory runs headlong into Supreme Court precedent: in the absence

9 of a duty to deal with rivals (which Plaintiff does not even attempt to allege here), a firm “has no

10 obligation to deal under terms and conditions favorable to its competitors.” Pac. Bell Tel. Co. v.

11 linkLine Comm’cns, Inc., 555 U.S. 438, 450–51 (2009).

12 Specifically, Plaintiff alleges that Apple blocked competitors from launching subscription

13 mobile gaming services for iOS by applying its technical and contractual requirements that

14 require apps to be distributed through the App Store, see Compl. ¶¶ 68–81, including its App

15 Store Review Guidelines, see id. ¶¶ 82–91, to reject Microsoft’s and Facebook’s subscription-

16 gaming apps for violating Apple’s policies against cloud or streaming games, see id. ¶¶ 92–97.

17 All of Plaintiff’s theories amount to a dressed-up challenge to the technical and contractual terms

18 that Apple offers to subscription gaming rivals that require the download of subscription games

19 from the App Store. Id. ¶¶ 69, 72, 89.

20 Apple’s App Store is a marketplace that Apple runs; thus, doing business in the App

21 Store requires doing business with Apple. Id. ¶¶ 23, 27. And Apple has the right to establish “an

22 infrastructure that renders [it] uniquely suited to service [its] customers,” and is ordinarily under

23 no obligation to share access to that infrastructure with its rivals. Trinko, 540 U.S. at 407

24 (holding, on a Rule 12 motion, that even a monopolist should not be compelled to “share the

25 source of their advantage”); see also id. at 410 (“[A]lleged insufficient assistance in the

26 provision of service to rivals is not a recognized antitrust claim.”). But the Court need not reach

27 this issue to grant this motion, because the App Store policy that allegedly limits competition,

28 according to this Complaint, is the requirement that games must be downloaded directly from the
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1 App Store. Compl. ¶ 89. This is exactly the requirement that Arcade games themselves follow.

2 Id. ¶ 44. Subscription gaming companies are free to reach the same customers in many other

3 ways, including through a web browser on iOS devices, and Apple is under no obligation to offer

4 them their preferred technical terms.

5 A technical or contractual requirement such as the downloading requirement does not

6 satisfy the demanding standards for a refusal to deal claim or any other form of anticompetitive

7 conduct. If a business has no duty to deal with its competitors, “it certainly has no duty to deal

8 under terms and conditions that the rivals find commercially advantageous.” linkLine

9 Comm’cns, Inc., 555 U.S. at 450; see also Trinko, 540 U.S. at 410 (concluding that “alleged

10 insufficient assistance in the provision of service to rivals is not a recognized antitrust claim”).

11 Bookhouse of Stuyvesant Plaza, Inc. v. Amazon.com, Inc., 985 F. Supp. 2d 612 (S.D.N.Y.

12 2013), is instructive. There, Amazon’s digital right management access control technology

13 (“DRM”) restricted the devices on which e-books distributed by Amazon could be read on

14 Kindle devices or non-Kindle devices enabled with a Kindle app. Id. at 617. The plaintiffs

15 alleged that the DRM requirement was anticompetitive conduct “designed to leverage Amazon’s

16 domination of the dedicated e-reader market.” Id. Relying on Trinko, the court dismissed the

17 complaint because, at bottom, plaintiffs had complained that Amazon had refused to deal with

18 them by offering them technical terms that would permit them to access Kindles, and that

19 Amazon had no obligation to do so. Id. at 623; see also LiveUniverse, Inc. v. MySpace, Inc., 304

20 F. App’x 554, 557 (9th Cir. 2008) (affirming dismissal of Section 2 claim based on allegation

21 that MySpace’s redesign of its platform to preclude users from linking to LiveUniverse website

22 content was anticompetitive conduct); In re Elevator Antitrust Litig., 502 F.3d 47, 52 (2d Cir.

23 2007) (affirming dismissal where alleged anticompetitive conduct—elevator manufacturer

24 designing the elevators to prevent servicing by other providers and refusing to sell elevator parts,

25 tools, software, or diagrams to maintenance providers—were within manufacturer’s right of

26 refusal to deal). Likewise, the court in Reveal Chat Holdco, LLC v. Facebook, Inc. dismissed a

27 Section 2 claim that was predicated upon Facebook’s challenged rules that allowed some but not

28 other developers to have access to certain data and only if those developers provided Facebook
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1 access to reciprocal data. 471 F. Supp. 3d 981, 1001–02 (N.D. Cal. 2020); see also hiQ Labs,

2 2020 WL 5408210, at *8–*10 (dismissing Section 2 claim predicated on LinkedIn’s blocking of

3 competitor scraping website for data).

4 Moreover, contrary to Plaintiff’s conclusory statements, Compl. ¶¶ 92, 97, Plaintiff’s

5 allegations show that competitors were not excluded. Apple’s guidelines “expressly permit

6 game streaming services such as Stadia and Microsoft xCloud,” just under Apple’s conditions—

7 that they “provide an individual page for each game available in their libraries, and each game

8 must be downloaded individually from the App Store,” as Arcade games are. Id. ¶¶ 44, 101.

9 Similarly, the Complaint acknowledges that Apple’s guidelines permit gaming catalogs, but

10 criticizes the fact that “users cannot download games directly from a catalog app.” Id. ¶ 103.

11 According to the Complaint, Apple also “allowed Facebook Gaming to launch” once Facebook

12 complied with the Guidelines. Id. ¶ 88. And far from restricting access, the Complaint actually

13 shows Apple working with game developers and widening access: Apple changed its rules in

14 September 2020 to allow an even wider variety of alleged competitive streaming game services

15 into the Store. Id. ¶ 103.

16 IV. PLAINTIFF FAILS TO STATE A SECTION 2 ESSENTIAL-FACILITY CLAIM.

17 A. Consumers May Not Bring An Essential-Facilities Claim.

18 Plaintiff brings a separate Section 2 claim predicated upon Apple’s allegedly denying

19 rival game developers access to two alleged essential facilities—iOS and the App Store. Id. ¶

20 152. Only competitors, not consumers, may assert essential-facilities claims. See Ferguson v.

21 Greater Pocatello Chamber of Commerce, Inc., 848 F.2d 976, 983 (9th Cir. 1988). Plaintiff is a

22 consumer. Compl. ¶ 14. As a matter of hornbook law, the essential-facilities doctrine is not

23 available to consumers. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An

24 Analysis of Antitrust Principles and Their Application ¶ 773a (5th ed. 2020) (hereinafter,

25 “Areeda & Hovenkamp”) (“Only actual or potential competitors of the defendant may claim

26 access to an essential facility.”); id. ¶ 774d (listing many “reasons for denying such actions to

27 consumers”). For this reason, courts routinely dismiss claims brought by non-competitors

28 asserting the denial of an essential facility. See, e.g., Davis v. Pac. Bell, 204 F. Supp. 2d 1236,
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1 1240 (N.D. Cal. 2002) (finding that “plaintiffs, as consumers, may not base their antitrust

2 allegations on the essential facilities doctrine.”), rev’d, in part on other grounds, 2002 WL

3 35451316 (N.D. Cal. Oct. 2, 2002); Cnty. of Stanislaus v. Pac. Gas & Elect. Co., No. CV-F-93-

4 5866-OWW, 1995 WL 819150, at *20 (E.D. Cal. Dec. 18, 1995) (“Plaintiffs acknowledge that

5 core customers are not competitors of PG & E and therefore cannot allege an essential facility

6 claim”), aff’d, 114 F.3d 858 (9th Cir. 1997); Thomas v. Network Sols., Inc., 176 F.3d 500, 509

7 (D.C. Cir. 1999) (dismissing essential-facilities claim because plaintiffs “are not, according to

8 their amended complaint, competitors of [the defendant]”); Credit Chequers Info. Servs., Inc. v.

9 CBA, Inc., No. 98 CIV. 3868(RPP), 1999 WL 253600, at *12 n.18 (S.D.N.Y. Apr. 29, 1999)

10 (“The essential facility doctrine is only available to competitors, not to customers.”), aff’d, 205

11 F.3d 1322 (2d Cir. 2000); Curtin Mar. Corp. v. Santa Catalina Island Co., CV 16-03290 TJH

12 (AGRx), 2018 WL 10014586, at *3 (C.D. Cal. Feb. 21, 2018) (“[Plaintiff] has not adequately

13 alleged that the essential facilities exception applies here. First, Curtin did not allege that SCICo

14 is its competitor.”), aff’d in part on other grounds, rev’d in part on other grounds, 786 F. App’x

15 675 (9th Cir. 2019).

16 B. Plaintiff’s Essential-Facilities Claim Otherwise Fails.

17 Plaintiff’s status as a consumer is dispositive as to Count 2, and thus the Court need go no

18 further. But that is not the only reason this claim fails. For many of the same reasons that his

19 monopolization claim (Count 1) must be dismissed, Count 2 fails as well. E.g., VBR Tours, LLC

20 v. Natl. R.R. Passenger Corp., Case No.: 14-cv-00804, 2015 WL 5693735, at *10 (N.D. Ill. Sept.

21 28, 2015) (“Trinko [ ] leaves the essential facilities doctrine hobbling on one foot.”); see also

22 Areeda & Hovenkamp ¶ 771c (“Lest there be any doubt, we state our belief that the essential

23 facilities doctrine is both harmful and unnecessary and should be abandoned”).

24 The essential-facilities doctrine has never been recognized by the Supreme Court.

25 Trinko, 540 U.S. at 411; Unigestion Holdings, S.A. v. UPM Tech., Inc., 412 F. Supp. 3d 1273,

26 1289 (D. Or. 2019) (recognizing that the “most recent cases from the Supreme Court have been

27 less than enthusiastic in considering” the essential-facilities doctrine). Even in circuits that

28 recognize the doctrine, to state a claim, a plaintiff must show that (1) the defendant is a
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1 “monopolist in control of an essential facility,” (2) the plaintiff, as defendant’s competitor, is

2 “unable reasonably or practically to duplicate the facility,” (3) the defendant “has refused to

3 provide” the plaintiff “access to the facility,” and (4) it is “feasible” for the defendant to provide

4 such access. hiQ Labs, 2020 WL 5408210, at *10 (quoting Aerotec Intl., Inc. v. Honeywell Intl.,

5 Inc., 836 F.3d 1171, 1185 (9th Cir. 2016)). Here, Plaintiff’s Complaint affirmatively establishes

6 that the third element—refusal of access—is not met. 4

7 The essential-facilities doctrine does not guarantee access to a facility “in a way that is

8 conducive to [a competitor’s] existing business model.” Aerotec Intl., Inc., 836 F.3d at 1185.

9 Where the claim is not that the plaintiff was denied access, but rather that competitors were

10 denied access on their preferred terms, essential-facilities claims are properly dismissed. Cf.

11 Blix, Inc., 2020 WL 7027494, at *7 (concluding that MacOS App Store is not an essential facility

12 where BlueMail achieved success on multiple other platforms before being made available on

13 MacOS); see Loren Data Corp. v. GXS, Inc., 501 F. App’x 275, 277–78, 284 (4th Cir. 2012)

14 (dismissing claim where plaintiff retained access to defendant’s network, though in a manner that

15 was alleged to not be the “industry standard” and more “cumbersome, inefficient, and

16 expensive”); Valet Apt. Servs., Inc. v. Atl. J. & Const., 865 F. Supp. 828, 830, 833 (N.D. Ga.

17 1994) (granting motion to dismiss where plaintiff could still advertise at the end of the rental

18 classified section of newspaper, though it was alleged to reduce the “number and quality” of calls

19 for plaintiff’s services). Here, this is a case “where access exists.” Trinko, 540 U.S. at 411

20 (“[T]he indispensable requirement for invoking the doctrine is the unavailability of access to the

21 essential facilities; where access exists, the doctrine serves no purpose.”); see also Aerotec Intl.,

22 Inc., 836 F.3d at 1177, 1185 (granting summary judgment where although Honeywell’s control

23 over the essential facility caused Aerotec to have “trouble,” “debt,” and “losses,” Honeywell did

24 not deny Aerotec access). Plaintiff has not alleged that Apple Arcade operates to deny end users

25 (or even developers) access to any “facility,” much less an essential one.

26 Moreover, a facility is “essential” “only if it is ‘otherwise unavailable and cannot be

27 reasonably or practically replicated.’” MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d 1124,

28 4
The other elements also are not met, as Apple would show if this claim were to proceed.
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1 1130–31 (9th Cir. 2004). Plaintiff touts that subscription-based mobile gaming services work

2 “across many devices.” Compl. ¶ 39. For example, users can access the paid Stadia tier “across

3 multiple devices, including laptops, tablets[,] and smartphone[s].” Id. ¶ 47. Plaintiff also alleges

4 that “an iPhone user typically uses a Mac computer, an iPad, and/or an iPod, i.e., all Apple

5 devices.” Id. ¶ 65. Thus, competing subscription-based mobile gaming services have alternative

6 avenues to reach iOS users. Plaintiff further alleges that other competitors have launched their

7 services on other platforms, id. ¶¶ 94, 96, thereby, defeating his essential-facilities claim, see

8 Sayre v. Google, Inc., No. C 19-02247 WHA, 2019 WL 6036703, at *3 (N.D. Cal. Nov. 14,

9 2019) (“Google Play is not essential because RDevice could reach consumers by employing

10 potential alternative channels of distribution.”), appeal dismissed, 2020 WL 1441431 (9th Cir.

11 Feb. 28, 2020); Unigestion Holdings, 412 F. Supp. 3d at 1289 (stating that plaintiff’s essential-

12 facilities claim fails because plaintiff had access to other cellular telephone networks); Kerwin v.

13 Casino, 802 F. App’x 723, 727 (3d Cir. 2020) (dismissing essential-facilities claim where

14 plaintiff could do business at other venues).

15 V. PLAINTIFF’S SECTION 1 CLAIM MUST BE DISMISSED BECAUSE IT IS


PREDICATED ENTIRELY ON UNILATERAL CONDUCT.
16

17 Plaintiff repackages his refusal-to-deal and essential facilities claims into a § 1 claim

18 (Count 3). It is entirely contradictory for Plaintiff to bring a § 2 claim premised on Apple’s

19 unilateral refusal-to-deal with competing services and denial of access to iOS and the App Store

20 under his essential-facilities claim, while also seeking to maintain a § 1 claim premised on

21 Apple’s application of “its Development Agreement and App Store Review Guidelines.” Compl.

22 ¶ 165. Plaintiff cannot, and his § 1 claim fails.

23 Section 1 “targets concerted anticompetitive conduct.” Qualcomm, 969 F.3d at 989.

24 “Unilateral conduct by a single firm, even if it ‘appears to “restrain trade” unreasonably,’ is not

25 unlawful under section 1 of the Sherman Act.” Jeanery, Inc. v. James Jeans, Inc., 849 F.2d

26 1148, 1152 (9th Cir. 1988) (quoting Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 767

27 (1984)). Courts routinely dismiss Section 1 claims where the claim is premised on one party’s

28 creation and announcement of terms to which another party is required to adhere. Relevent
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1 Sports, LLC v. U.S. Soccer Fed’n, Inc., 19-CV-8359 (VEC), 2020 WL 4194962, at *6 (S.D.N.Y.

2 July 20, 2020); Sambreel Holdings LLC v. Facebook, Inc., 906 F. Supp. 2d 1070, 1077 (S.D.

3 Cal. 2012); Baar v. Jaguar Land Rover N. Am., LLC, 295 F. Supp. 3d 460, 465 (D.N.J. 2018).

4 These claims amount to no more than unilateral conduct, which Section 1 does not touch.

5 Toscano v. Prof’l Golfers Ass’n, 258 F.3d 978, 984 (9th Cir. 2001) (concluding that merely

6 agreeing “to purchase products or provide a service under conditions set by the other party” does

7 not demonstrate a “conscious commitment to a common scheme designed to achieve an unlawful

8 objective”); Jeanery Inc., 849 F.2d at 1160 (“This termination was pursuant to James Jeans’

9 announced policy as reiterated in its conversations with its dealers . . . [i]t was unilateral,

10 independent action taken by James Jeans . . . [a]nd it did not violate section 1 of the Sherman

11 Act.”).

12 That is all Plaintiff alleges here. Plaintiff claims that Apple violated § 1 because “Apple

13 forces developers of subscription-based mobile gaming services developers to comply with its

14 Development Agreement and App Store Review Guidelines, including the requirement that iOS

15 developers distribute their apps exclusively through the App Store.” Compl. ¶ 165.

16 This allegation is on all fours with the § 1 theories dismissed in Relevent Sports,

17 Sambreel, and Baar. In Relevent Sports, for example, compliance by the United States Soccer

18 Federation (“USSF”) with FIFA’s policies that prohibited USSF from sanctioning certain soccer

19 matches in the United States—to which USSF was “required to adhere”—was merely “unilateral

20 compliance with FIFA’s directive.” 2020 WL 4194962, at *6–*7. Likewise, in Sambreel

21 Holdings, as a condition of using Facebook’s website, Facebook required Application

22 Developers to enter agreements with Facebook that required Developers to use only Advertising

23 Partners approved by Facebook, while Facebook separately entered into agreements with

24 Advertising Partners that permitted Facebook to limit who Advertising Partners could

25 “associate” on the Facebook platform. 906 F. Supp. 2d at 1076–77. These agreements were

26 merely “unilateral action on the part of Facebook . . . impose[d] upon companies that utilize the

27 Facebook Platform.” Id. at 1077. Finally, in Baar, allegations that Jaguar Land Rover North

28 America and Jaguar Land Rover Limited “unilaterally implemented [a] Policy and required their
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1 dealers to enforce it” failed to allege more than unilateral conduct. 295 F. Supp. 3d at 465.

2 VI. THE CARTWRIGHT ACT CLAIM FAILS FOR THE SAME REASONS AS THE
SECTION ONE CLAIM.
3
4 Plaintiff’s state law Cartwright Act claim (Count 4) is duplicative of Plaintiff’s Section 1

5 claim and should be dismissed for the same reasons. “Federal law interpreting Sherman

6 Antitrust Act section 1. . . is useful when addressing issues arising under” the Cartwright Act.

7 SC Manufactured Homes, Inc. v. Liebert, 76 Cal. Rptr. 3d 73, 84 (Cal. Ct. App. 2008); see also

8 Apple, Inc. v. Psystar Corp., 586 F. Supp. 2d 1190, 1203 (N.D. Cal. 2008) (“The Cartwright Act

9 was patterned after Section 1 of the Sherman Act, and the pleading requirements under the two

10 statutes are similar.”). If a plaintiff “alleges the same conduct as both a violation of the Sherman

11 Act and a violation of California’s Cartwright Act,” a court’s “determination that the alleged

12 conduct is not an unreasonable restraint of trade under the Sherman Act necessarily implies that

13 the conduct is not unlawful under the Cartwright Act.” Lenhoff Enters., Inc. v. United Talent

14 Agency, Inc., 729 F. App’x 528, 531 (9th Cir. 2018); see also, e.g., Name.Space, Inc. v. Internet

15 Corp. for Assigned Names & Numbers, 795 F.3d 1124, 1131 n.5 (9th Cir. 2015) (“Because the

16 analysis under the Cartwright Act . . . is identical to that under the Sherman Act, . . . we also

17 affirm the district court’s dismissal of the Cartwright Act claim.”).

18 The reasons to dismiss Plaintiff’s federal antitrust claims apply with equal force to his

19 Cartwright Act claims. Like Section 1 of the Sherman Act, the Cartwright Act does not reach

20 unilateral conduct. Bondi v. Jewels by Edwar, Ltd., 73 Cal. Rptr. 494, 498 (Cal. Ct. App. 1968)

21 (“We are of the opinion that the language of section 16720 of the Business and Professions Code

22 contemplates concert of action by separate individuals or entities maintaining separate and

23 independent interests[.]”). Moreover, like Section 1 of the Sherman Act, the Cartwright Act does

24 not prohibit one party from unilaterally creating terms of dealing and refusing to deal with

25 parties that fail to adhere to those terms. Chavez v. Whirlpool Corp., 113 Cal. Rptr. 2d 175, 182

26 (Cal. Ct. App. 2001) (stating that the Cartwright Act also protects “the right of a manufacturer,

27 under the Colgate doctrine, to announce resale prices and refuse to deal with dealers who do not

28 comply, and the dealers’ freedom to acquiesce in the manufacturer’s demand in order to avoid
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1 termination”); see also SC Manufactured Homes, Inc. v. Liebert, 76 Cal. Rptr. 3d 73, 83 (2008)

2 (“The law is well settled that absent a violation of public policy or statute, [defendant] may

3 choose to do business with whomever it wishes”)

4 VII. THE UCL CLAIM FAILS WITH THE ANTITRUST CLAIMS.

5 Plaintiff also brings claims under both the “unfair” and “unlawful” prongs of California’s

6 Unfair Competition Law (“UCL”). Compl. ¶ 182 (Count 5). With respect to the “unfair” prong

7 of the UCL, if “the same conduct is alleged to be both an antitrust violation and an ‘unfair’

8 business act or practice for the same reason—because it unreasonably restrains competition and

9 harms consumers—the determination that the conduct is not an unreasonable restraint of trade

10 necessarily implies that the conduct is not ‘unfair’ toward consumers.” Whirlpool Corp., 113

11 Cal. Rptr. 2d at 184. Because Apple’s conduct is not unlawful under the antitrust laws,

12 Plaintiff’s UCL claim under the “unfair” prong should also be dismissed. Id. (dismissing UCL

13 claim after dismissing Cartwright Act claim); see also, e.g., Hicks, 897 F.3d at 1124 (dismissing

14 UCL claim under the “unfair” prong after dismissing federal antitrust claims); LiveUniverse,

15 Inc., 304 F. App’x at 558 (same). As to the unlawful prong claim, it “borrows violations of other

16 laws and treats them as unlawful practices that the unfair competition law makes independently

17 actionable.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1130 (9th Cir. 2014) (quoting Cel–Tech

18 Commc’ns, Inc. v. L.A. Cellular Tel. Co., 83 Cal. Rptr. 2d 548, 561 (Cal. Ct. App. 1999)).

19 Because all claims in the Complaint fail to state a claim, Plaintiff’s UCL claim under the

20 “unlawful” prong should likewise be dismissed.

21 VIII. THE UNJUST ENRICHMENT CLAIM SHOULD BE DISMISSED.

22 Count 6, a claim for unjust enrichment, also fails. Plaintiff alleges that Apple’s conduct

23 violates “unjust enrichment principles in California and every other state.” Compl. ¶ 193. In

24 California, “there is not a standalone cause of action for ‘unjust enrichment,’ which is

25 synonymous with ‘restitution.’” Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir.

26 2015) (quoting Durell v. Sharp Healthcare, 108 Cal. Rptr. 3d 682, 699 (Cal. Ct. App. 2010)).

27 Unjust enrichment and restitution “describe the theory underlying a claim that a defendant has

28 been unjustly conferred a benefit through mistake, fraud, coercion, or request.” Id. (internal
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Case 4:20-cv-07034-YGR Document 40 Filed 12/17/20 Page 32 of 33

1 quotations omitted). Thus, “[w]hen a plaintiff alleges unjust enrichment, a court ‘may construe

2 the cause of action as a quasi-contract claim seeking restitution.’” Id. (quoting Rutherford

3 Holdings, LLC v. Plaza Del Rey, 166 Cal. Rptr. 3d 864, 872 (Cal. Ct. App. 2014)). Plaintiff has

4 not pleaded a claim based in contract. Plaintiff does not allege that he was misled or that the

5 defendant breached any express or implied covenant. Accordingly, Plaintiff’s unjust enrichment

6 claim should be dismissed. See C.W. v. Epic Games, Inc., Case No. 19-cv-003629-YGR, 2020

7 WL 5257572, at *6 (N.D. Cal. Sept. 3, 2020).

8 To the extent that Plaintiff intended to bring a global unjust enrichment claim by alleging

9 that Apple violated unjust enrichment principles of “every other state,” such a claim should be

10 dismissed. See In re Packaged Seafood Prods. Antitrust Litig., 242 F. Supp. 3d 1033, 1088 (S.D.

11 Cal. 2017) (concluding that plaintiffs’ claim of “unjust enrichment generally” without listing

12 “any particular jurisdiction to which the allegations should apply” was “fatal”). Nor does

13 Pistacchio have standing “to bring claims under the laws of states where [he] ha[s] alleged no

14 injury, residence, or other pertinent connection.” Goldstein v. Gen. Motors LLC, 445 F. Supp.

15 3d 1000, 1021 (S.D. Cal. 2020); see also In re Glumetza Antitrust Litig., No. C 19-05822 WHA,

16 2020 WL 1066934, at *10 (N.D. Cal. Mar. 5, 2020) (finding that “plaintiffs lack standing to

17 assert claims in states where they do not reside”).

18 CONCLUSION

19 For these reasons, all of Plaintiff’s claims fail as a matter of law and should be dismissed.

20

21

22

23

24

25

26

27

28
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1
Dated: December 17, 2020 Respectfully submitted,
2
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
3
4
By: /s/ Karen L. Dunn
5 KAREN L. DUNN (DC SBN 1002520; pro hac vice)
WILLIAM A. ISAACSON (DC SBN 414788; pro hac vice)
6 2001 K Street NW
7 Washington, D.C. 20006-1047
Telephone: (202) 223-7300
8 Facsimile: (202) 223-7420
wisaacson@paulweiss.com
9 kdunn@paulweiss.com
10 MEREDITH R. DEARBORN (SBN 268312)
11 943 Steiner St.
San Francisco, CA 94117
12 Telephone: (202) 223-7300
Facsimile: (202) 223-7420
13 mdearborn@paulweiss.com
14
Counsel for Defendant Apple Inc.
15
16

17

18

19

20

21

22

23

24

25

26

27

28
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Case 4:20-cv-07034-YGR Document 40-1 Filed 12/17/20 Page 1 of 4

1 Karen L. Dunn (DC SBN 1002520; pro hac vice)


William A. Isaacson (DC SBN 414788; pro hac vice)
2 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
2001 K Street NW
3 Washington, D.C. 20006-1047
Telephone: (202) 223-7300
4 Facsimile: (202) 223-7420
wisaacson@paulweiss.com
5 kdunn@paulweiss.com

6 Meredith R. Dearborn (SBN 268312)


PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
7 943 Steiner St.
San Francisco, CA 94117
8 Telephone: (202) 223-7300
Facsimile: (202) 223-7420
9 mdearborn@paulweiss.com
10
Counsel for Defendant
11 Apple Inc.
12
UNITED STATES DISTRICT COURT
13
NORTHERN DISTRICT OF CALIFORNIA
14 OAKLAND DIVISION

15
JOHN PISTACCHIO, on behalf of himself CASE NO. 4:20-cv-07034-YGR
16 and all others similarly situated,
[PROPOSED] ORDER GRANTING
17 Plaintiff, DEFENDANT’S MOTION TO DISMISS
AND REQUEST FOR JUDICIAL NOTICE
18 v.
19 The Honorable Yvonne Gonzalez Rogers
APPLE INC., a California Corporation,
20 Defendant.
21

22

23

24

25

26

27

28

[PROPOSED] ORDER GRANTING DEF.’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE
CASE NO. 4:20-cv-07034-YGR
Case 4:20-cv-07034-YGR Document 40-1 Filed 12/17/20 Page 2 of 4

1 On December 17, 2020, Defendant Apple Inc. (“Apple”) filed a motion to dismiss John

2 Pistacchio’s Class Action Complaint (No. 4:20-cv-07034-YGR, Dkt. No. 1, the “Complaint”)

3 pursuant to Fed. R. Civ. P. 12(b)(6) (“Motion”), and a supporting Request for Judicial Notice of

4 Exhibit A to the Declaration of Meredith R. Dearborn in Support of Defendant’s Motion to

5 Dismiss and Request for Judicial Notice (“Request for Judicial Notice”). This Court, having fully

6 reviewed and considered all papers and arguments submitted in support of and in opposition to

7 the Motion and the Request for Judicial Notice, and for the reasons set forth below, hereby

8 GRANTS Apple’s Request for Judicial Notice and GRANTS Apple’s Motion and DISMISSES

9 WITH PREJUDICE each of the claims asserted in the Complaint.

10 The Court takes judicial notice of Exhibit A to the Declaration of Meredith R. Dearborn in

11 Support of Defendant’s Motion to Dismiss and Request for Judicial Notice (“Dearborn

12 Declaration”), which is a true and correct copy of Apple’s App Store Review Guidelines

13 (“Guidelines”). See, e.g., Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012);

14 Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018). Plaintiff repeatedly quotes

15 or refers to the Guidelines in the Complaint and the Guidelines form the basis of Plaintiff’s

16 claims. See, e.g., Complaint ¶¶ 48, 59, 79, 79 n.11, 83 n.12, 87 n.18, 89 n.19, 90 n.21, 118 n.31,

17 82, 83–90, 98, 101–02, 111, 113, 116–20, 145, 165–66, 191.

18 The Court finds that Plaintiff’s antitrust claims (Counts 1 through 4) must be dismissed

19 because such claims rest on an insufficiently pled and an implausibly narrow product market.

20 See, e.g., Complaint ¶ 56; Guidelines § 4.9; Hicks v. PGA Tour, Inc., 897 F.3d 1109 (9th Cir.

21 2018); hiQ Labs, Inc. v. LinkedIn Corp., No. 17-cv-03301-EMC, 2020 WL 5408210 (N.D. Cal.

22 Sept. 9, 2020).

23 The Court also finds that Plaintiff’s Sherman Act Section 2 Monopoly Maintenance and

24 Denial of Essential Facility claims (Counts 1 and 2) must be dismissed because Plaintiff’s

25 allegations are insufficient to allege market power. See, e.g., Complaint ¶¶ 112, 7; Guidelines §

26 4.9; Sidibe v. Sutter Health, 4 F. Supp. 3d 1160 (N.D. Cal. 2013); Abid v. Google LLC, Case No.

27 18-cv-00981-MEJ, 2018 WL 3458546 (N.D. Cal. July 18, 2018).

28 These claims also fail for other reasons. Plaintiff’s Sherman Act Section 2 Monopoly

[PROPOSED] ORDER GRANTING DEF.’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE
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1 Maintenance claim (Count 1) must be dismissed because it fails to allege the necessary element of

2 “anticompetitive conduct.” See, e.g., Complaint ¶¶ 46–53, 66–97, 99, 101, 103; Guidelines

3 §§ 3.1.2, 4.7, 4.9; Pac. Bell Tel. Co. v. linkLine Comm’cns, Inc., 555 U.S. 438 (2009); Verizon

4 Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).

5 Plaintiff’s Sherman Act Section 2 Denial of Essential Facility claim (Count 2) must

6 additionally be dismissed because Plaintiff, as a consumer, may not bring an essential facilities

7 claim. Complaint ¶ 14; see, e.g., Ferguson v. Greater Pocatello Chamber of Commerce, Inc.,

8 848 F.2d 976 (9th Cir. 1988); Davis v. Pac. Bell, 204 F. Supp. 2d 1236 (N.D. Cal. 2002).

9 Moreover, the allegations fail to establish that competitors do not have access to the

10 alleged facility. See, e.g., Complaint ¶¶ 101, 103, 88; Guidelines §§ 3.1.2, 4.9; Verizon

11 Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004). The Plaintiff’s

12 alleged facility is also not essential. See, e.g., Complaint ¶¶ 39, 47, 65, 94, 96; MetroNet Servs.

13 Corp. v. Qwest Corp., 383 F.3d 1124 (9th Cir. 2004).

14 The Court further finds that Plaintiff’s Sherman Act Section 1 Unreasonable Restraint of

15 Trade (Count 3) must be dismissed because Plaintiff has failed to allege concerted conduct. See,

16 e.g., Complaint ¶ 165; Toscano v. Prof’l Golfers Ass’n, 258 F.3d 978 (9th Cir. 2001); The

17 Jeanery, Inc. v. James Jeans, Inc., 849 F.2d 1148 (9th Cir. 1988).

18 Plaintiff’s California state law claims under the Cartwright Act (Count 4) and the Unfair

19 Competition Law (Count 5) are derivative of Plaintiff’s federal antitrust claims and must likewise

20 be dismissed for the same reasons. See, e.g., Name.Space, Inc. v. Internet Corp. for Assigned

21 Names and Numbers, 795 F.3d 1124 (9th Cir. 2015) (affirming dismissal of Cartwright Act

22 claim); Hicks v. PGA Tour, Inc., 897 F.3d 1109 (9th Cir 2018) (affirming dismissal of Unfair

23 Competition Law claim).

24 Finally, the Court finds that Plaintiff has failed to allege a claim based in contract, and his

25 California Unjust Enrichment (Count 6) claim must likewise be dismissed. See Astiana v. Hain

26 Celestial Group, Inc., 783 F.3d 753 (9th Cir. 2015).

27 Accordingly, IT IS HEREBY ORDERED that:

28 (1) The Court GRANTS Apple’s request for the Court to take judicial notice of Exhibit A

[PROPOSED] ORDER GRANTING DEF.’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE
CASE NO. 4:20-cv-07034-YGR

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Case 4:20-cv-07034-YGR Document 40-1 Filed 12/17/20 Page 4 of 4

1 to the Dearborn Declaration;

2 (2) The Court GRANTS Apple’s Motion to Dismiss the Complaint as to all claims and

3 causes of action asserted against Apple; and

4 (3) Plaintiff’s Complaint is hereby DISMISSED with prejudice.

6 IT IS SO ORDERED.

8 DATED: _________________________ ___________________________________


HON. YVONNE GONZALEZ ROGERS
9 United States District Judge

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[PROPOSED] ORDER GRANTING DEF.’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE
CASE NO. 4:20-cv-07034-YGR