20-12-17 Apple Motion to Dismiss Pistacchio Apple Arcade Case

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)
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
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:

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
i
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
ii
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
iii
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
iv
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
v
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
1
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
2
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.
3
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
4
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).
5
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. ¶
6
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).
7
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
8
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

9
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
10
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
11
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
12
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.
13
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
14
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
15
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
16
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
17
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,
18
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
19
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.
20
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
21
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
22
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
23
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
24
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.
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Dated: December 17, 2020 Respectfully submitted,
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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
Telephone: (202) 223-7300
8 Facsimile: (202) 223-7420
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.
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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
Telephone: (202) 223-7300
4 Facsimile: (202) 223-7420
6 Meredith R. Dearborn (SBN 268312)

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.
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[PROPOSED] ORDER GRANTING DEF.’S MOTION TO DISMISS AND REQUEST FOR JUDICIAL NOTICE
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
2
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
3
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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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)

11 Counsel for Defendant

13 UNITED STATES DISTRICT COURT

24 The Honorable Yvonne Gonzalez Rogers

DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT

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

DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT:

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

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

17 Blix Inc. v. Apple, Inc.,

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

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

Curtin Mar. Corp. v. Santa Catalina Island Co.,

4 In re Elevator Antitrust Litig.,

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

14 In re Glumetza Antitrust Litig.,

19 United States v. Grinnell Corp.,

27 Khalid v. Microsoft Corp.,

LAI v. USB-Implementers Forum, Inc.,

4 Levitt v. Yelp! Inc.,

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

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

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

27 Sidibe v. Sutter Health,

Sprewell v. Golden State Warriors,

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

9 Toscano v. Prof’l Golfers Ass’n,

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

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

1 NOTICE OF MOTION AND MOTION

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

15 MEMORANDUM OF POINTS AND AUTHORITIES

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

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

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

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

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

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

15 subscription gaming services after Apple launched Arcade.

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

1 allegations necessary to avoid dismissal.

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

16 pursuing an essential-facilities claim.

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

7 2019. Id. ¶¶ 2, 32.

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

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

26 “catalog” and “cloud gaming” app).

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

13 he filed his Complaint. Compl. ¶ 103.

5 release a game catalog on iOS devices.

15 individual games is a “bad experience”).

25 99, 101, 102, 103, 110.

11 Gaming costs $4.99 per month).

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

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

8 DATED: _ ___________