Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 1 of 21
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`HIQ LABS, INC.,
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`Plaintiff,
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`v.
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`LINKEDIN CORPORATION,
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`Defendant.
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`Case No. 17-cv-03301-EMC
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`ORDER GRANTING IN PART AND
`DENYING IN PART DEFENDANT’S
`MOTION TO DISMISS
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`Docket No. 137
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`Plaintiff hiQ Labs, Inc. has filed suit against LinkedIn Corp. seeking declaratory relief as
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`well as injunctive relief and damages. According to hiQ, it has not violated any laws by
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`“scraping” public information about LinkedIn users from LinkedIn’s website. Furthermore, hiQ
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`asserts, LinkedIn has violated various antitrust and fair practices laws by trying to prevent hiQ
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`from accessing the public information on the website. Currently pending before the Court is
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`LinkedIn’s motion to dismiss the first amended complaint (“FAC”). The motion primarily
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`challenges the antitrust claims asserted for the first time in the FAC.
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`Having considered the parties’ briefs as well as the oral argument of counsel, the Court
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`hereby GRANTS in part and DENIES in part the motion to dismiss.
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`I.
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`FACTUAL & PROCEDURAL BACKGROUND
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`The main allegations in the FAC which are related to the antitrust claims are as follows.
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`“LinkedIn is the world’s largest professional social network, with over 660 million
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`members.” FAC ¶ 2. Individuals who use the LinkedIn network can make certain information
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`about themselves – e.g., resumes and work history – publicly available on the LinkedIn website.
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`See FAC ¶ 2.
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`“hiQ identified an opportunity for a new kind of ‘people analytics’ services” based on the
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 2 of 21
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`information publicly available on LinkedIn. FAC ¶ 3. “People analytics” is
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` a
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` new type of predictive data analysis aimed at providing employers
`in-depth, predictive insights into their workforce. People analytics
`generally work by performing computerized analyses of employees’
`public professional information and history that then show which
`employees are at higher risk of looking for a new job, and which
`may have skills that are not being utilized in their current job. hiQ
`created two specific analytics services: (a) “Keeper,” which tells
`employers which of their employees are at the greatest risk of being
`recruited away, and (b) “Skill Mapper,” a summary of the breadth
`and depth of aggregate or individual skills of current or prospective
`employees, which may not be obvious from internal company
`documents (such as internal performance reviews or the resume the
`employee supplied as part of the hiring process) or conversations
`with those employees.
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`FAC ¶ 33. Before hiQ, people analytics either did not exist or was not very accurate – e.g.,
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`employers relied on internal data only and took an ad hoc approach; hiQ, with its people analytics
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`services, was “able to reduce hard costs and transaction costs” for employers. FAC ¶ 35.
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`LinkedIn eventually realized that it might be able to profit by
`providing the same type of innovative and revolutionary analytics
`hiQ pioneered, and it developed its own competing version of that
`analytics service. Then, in May 2017, LinkedIn abruptly,
`unlawfully and without cause denied hiQ access to the portion of the
`LinkedIn website containing wholly public member profiles.
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`FAC ¶ 6.
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`hiQ is not alone in being denied access to the public portion of LinkedIn’s website;
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`LinkedIn has denied access to other people analytics providers as well. See FAC ¶ 46. However,
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`LinkedIn has not denied access to companies that do not provide people analytics services (e.g.,
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`Google and Bing). See FAC ¶ 47.
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`“The most immediate anticompetitive effect of LinkedIn’s conduct . . . was to eliminate –
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`effectively overnight – nearly all of its people analytics competitors.” FAC ¶ 53. People analytics
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`providers who remain either offer their services at much higher prices than LinkedIn does, or at
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`the same price but with inferior quality. See FAC ¶ 54. Through its actions, LinkedIn has thus
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`reduced consumer choice and price competition. See FAC ¶ 58(d).
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`LinkedIn’s conduct implicates two product markets. First, there is the market for
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`professional social networking platforms. Professional social networking platforms must be
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 3 of 21
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`differentiated from traditional social networking platforms because the former, unlike the latter,
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`focus only on business relationships. See FAC ¶¶ 20-21 (alleging, inter alia, that “consumers
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`would reasonably switch to other professional social network platforms for business purposes (if
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`they could), but would not similarly use more traditional social networks for the same purposes”).
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`“LinkedIn was, for many years, the only real professional social networking platform . . . .” FAC
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`¶ 25. Today, LinkedIn has “well over 75% of all professional social network users in the United
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`States.” FAC ¶ 25.
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`Second, there is the market for people analytics services. This “type of service . . . did not
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`exist until hiQ first came into being, and the only alternative to such services is the previous set of
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`ad hoc measures that companies employed when trying to guess employee attrition risk and
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`employees’ full and current skillsets.” FAC ¶ 36.
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`Based on, inter alia, the above allegations, hiQ has asserted three antitrust claims.
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`• Monopolization, in violation of § 2 of the Sherman Act. According to hiQ,
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`LinkedIn has acquired and maintained monopoly power in the markets for
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`professional social networking platforms and people analytics services through
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`unlawful means, including “leveraging, lock-in, raising rivals’ costs, tying,
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`unilateral refusal to deal, denial of essential facilities, and vertically-arranged
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`boycotts.” FAC ¶ 12.
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`• Attempted monopolization, also in violation of § 2 of the Sherman Act. According
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`to hiQ, there is a dangerous probability that LinkedIn will monopolize the market
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`for people analytics services because it has engaged in anticompetitive conduct
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`such as “leveraging, lock-in, raising rivals’ costs, tying, unilateral refusal to deal,
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`denial of essential facilities, and vertically-arranged boycotts.” FAC 150.
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`• Unreasonable restraint of trade, in violation of § 1 of the Sherman Act. According
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`to hiQ, LinkedIn and its members have entered into contracts or combinations that
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`have the effect of unreasonably restraining trade. See FAC ¶ 159. The contracts or
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`combinations include “tying arrangements and vertically-arranged boycotts.” FAC
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`¶ 162.
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 4 of 21
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`In addition to the antitrust claims, hiQ has asserted claims for, inter alia, declaratory relief,
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`intentional interference with contract and prospective economic advantage, and violation of
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`California Business & Professions Code § 17200.
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`LinkedIn moves to dismiss certain claims asserted in hiQ’s FAC. In particular, LinkedIn
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`argues that all claims for damages (i.e., the antitrust and intentional interference claims) should be
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`dismissed based on the Noerr-Pennington doctrine and the California litigation privilege.
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`LinkedIn further argues that the antitrust claims should be dismissed on various merits grounds
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`(e.g., failure to allege antitrust injury, a product market, and anticompetitive conduct).
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`A.
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`Legal Standard
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`II.
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`DISCUSSION
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`Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include “a short and plain
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`statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A
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`complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil
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`Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss
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`after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic
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`Corp. v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations [in the complaint] ‘must .
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`. . suggest that the claim has at least a plausible chance of success.’“ Levitt v. Yelp! Inc., 765 F.3d
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`1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations in the complaint as true and
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`construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St.
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`Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But “allegations in a
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`complaint . . . may not simply recite the elements of a cause of action [and] must contain sufficient
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`allegations of underlying facts to give fair notice and to enable the opposing party to defend itself
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`effectively.” Levitt, 765 F.3d at 1135 (internal quotation marks omitted). “A claim has facial
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`plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
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`inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The
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`plausibility standard is not akin to a probability requirement, but it asks for more than a sheer
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`possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted).
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 5 of 21
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`B.
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`Claims for Damages
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`In the FAC, hiQ seeks declaratory relief, injunctive relief, and damages. The request for
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`damages is based on the following causes of action: (1) the antitrust claims and (2) the intentional
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`interference claims. LinkedIn moves to dismiss both damages claims based on the Noerr-
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`Pennington doctrine. LinkedIn also moves to dismiss the intentional interference claims based on
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`the California litigation privilege.
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`1.
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`Noerr-Pennington Doctrine
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`The essence of the Noerr-Pennington doctrine is that those who
`petition any department of the government for redress are immune
`from statutory liability for their petitioning conduct. The doctrine
`derives from two Supreme Court cases holding that the First
`Amendment Petition Clause immunizes acts of petitioning the
`legislature from antitrust liability. The doctrine has since been
`applied to actions petitioning each of the three branches of
`government, and has been expanded beyond its original antitrust
`context.
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`Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1006-07 (9th Cir. 2008). For
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`example, the doctrine can apply to a state claim for tortious interference with prospective
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`economic advantage. See id. at 1007; see also Hi-Top Steel Corp. v. Lehrer, 24 Cal. App. 4th 570,
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`577-78 (1994) (noting that, “[w]hile the Noerr-Pennington doctrine was formulated in the context
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`of antitrust cases, it has been applied or discussed in cases involving other types of civil liability,
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`including liability for interference with contractual relations or prospective economic advantage or
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`unfair competition”).
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`LinkedIn concedes that it has not directly petitioned the government for any relief.
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`However, it points out that “[c]onduct incidental to a lawsuit, including a pre-suit demand letter,
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`falls within the protection of the Noerr-Pennington doctrine.” Id. (emphasis added). LinkedIn
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`maintains that hiQ’s antitrust and intentional interference claims “derive from the cease-and-desist
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`letters LinkedIn sent that ostensibly ‘cut off’ hiQ’s access to LinkedIn’s website.” Mot. at 8. See,
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`e.g., FAC ¶¶ 7, 39 (referring to a cease-and-desist letter sent on May 23, 2017); FAC ¶ 43
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`(referring to letter sent on June 24, 2017, reiterating demand to cease and desist).
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`In response, hiQ argues that “petitioning activity may be actionable if it is part of a broader
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`anticompetitive scheme.” Opp’n at 13. The broader anticompetitive scheme includes the actual
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 6 of 21
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`cutting off of competitors’ access to the public information on LinkedIn’s website – which is not
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`petitioning activity. See Opp’n at 15.
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`hiQ’s argument relies in large part on Hynix Semiconductor Inc. v. Rambus, Inc., 527 F.
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`Supp. 2d 1084 (N.D. Cal. 2007) (Whyte, J.). In Hynix, Rambus was a member of a SSO
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`(standard-setting organization) and allegedly used its membership in the SSO to discover how a
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`particular standard was developing and then drafted patent claims to cover the standard. “Once
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`the industry became ‘locked in’ to the DRAM standard, Rambus sprang the ‘patent trap’ and
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`demanded royalties,” and further “backed up its royalty demands with infringement litigation.” Id.
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`at 1089. Hynix subsequently brought an antitrust claim based on Rambus’s “‘overall course of
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`conduct’ – including [its] patent litigation.” Id.
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`Before Judge Whyte, Rambus argued that, “because its use of the courts to enforce its
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`patents is protected petitioning activity pursuant to the Noerr-Pennington doctrine . . . , Hynix
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`could not claim its litigation expenses as damages.” Id. at 1086. Judge Whyte ultimately
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`disagreed.
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`Judge Whyte noted that there were “three possible approaches to whether patent litigation
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`can be an anticompetitive act in violation of the antitrust laws.” Id. at 1091.
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`• Under the first approach (the Second Circuit’s “absolute bar”), “only frivolous
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`patents can be anticompetitive and part of an unlawful scheme.” Id. at 1091-92.
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`• Under the second approach (labeled the “Kobe claim”) – and at “the opposite end
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`of the spectrum” – even nonfrivolous patent litigation can be anticompetitive if part
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`of a broader anticompetitive scheme (i.e., “brought in conjunction with other
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`antitrust misconduct”). Id. at 1092-94.
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`• The third approach was a middle ground between the first two approaches. See id.
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`at 1094. Under the third approach, “good faith litigation” could be “unlawful if
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`done as part of an anticompetitive scheme” but, in order to get litigation costs as
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`part of the damages for the antitrust violation, there must be “an explicit linkage
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`between [the] antitrust violation and the litigation” – i.e., a causal connection. Id.
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`at 1095.
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 7 of 21
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`Judge Whyte endorsed the third approach.
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`[T]he court believes that the Federal Circuit and the Supreme Court
`would recognize some “scheme” antitrust allegations that include
`constitutionally protected litigation within the “overall course of
`conduct,” but only those in which the patent litigation is “causally
`connected” to anticompetitive harms. . . . The court concludes that
`before otherwise protected litigation can be a part of an
`“anticompetitive scheme” claim, the court must first find that the
`other aspects of the scheme independently produce anticompetitive
`harms. Once this step has been established, the court should ask
`whether the accused patent litigation was causally connected to
`these anticompetitive harms. If yes, an antitrust plaintiff may then
`include good faith patent litigation as part of the anticompetitive
`scheme.
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`Id. at 1096-97.1 He added: “[W]here the patent litigation is used to further the harm caused under
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`a ‘more traditional antitrust theory,’ a plaintiff should be allowed a full recovery.” Id. at 1097
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`(emphasis added); see also Arista Networks, Inc. v. Cisco Sys. Inc., No. C-16-0923 BLF (N.D.
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`Cal.) (Docket No. 281) (Order at 16) (taking note of plaintiff’s argument that defendant’s
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`intellectual property “lawsuit was the ‘enforcement mechanism’ of the purported ‘open early,
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`closed late’ anticompetitive scheme” – i.e., defendant used the litigation and conduct incidental to
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`that litigation “as tools to further the ‘closing’ step of the ‘open early, closed late’ scheme”)
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`(emphasis added).
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`According to LinkedIn, the Court should reject the application of Hynix to the instant case
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`because the facts in Hynix and the facts in the instant case are not sufficiently similar. LinkedIn
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`maintains that Hynix-type cases all involve “a bait-and-switch, where a defendant affirmatively
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`1 In its papers, LinkedIn argues that the anticompetitive nonpetitioning activity must be
`“ineffective” without the petitioning activity in order to avoid the Noerr-Pennington doctrine. See
`Reply at 6-7. LinkedIn comes up with this requirement because Judge Whyte stated in Hynix as
`follows:
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`Because Rambus’ alleged conduct at JEDEC can independently
`qualify as an anticompetitive harm under section 2, the court finds
`that Rambus’ current patent litigation is “causally connected” to
`that behavior and therefore properly included in an “anticompetitive
`scheme” allegation. To be clear, the causal connection is that a
`patent “ambush” or “hold-up” is ineffective without the threat of
`litigation.
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`Hynix, 527 F. Supp. 2d at 1098. But as should be clear from the above, although Judge Whyte did
`use the term “ineffective,” he was not imposing some kind of ineffectiveness requirement. Rather,
`he simply imposed a requirement of causal connection.
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`misled competitors into using its technology and intellectual property on the understanding that no
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`legal action would result from doing so.” Reply at 5. LinkedIn’s argument is not persuasive. It
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`provides no rationale as to why Hynix should be narrowly construed to these facts. Hynix clearly
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`made a broader point: it asks whether the petitioning activity furthered an anticompetitive scheme
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`involving nonpetitioning activity; if the gravamen of the action centers on nonpetitioning activity,
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`the fact that petitioning activity is employed to further that conduct is not sufficient to implicate
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`the Noerr-Pennington doctrine.
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`LinkedIn argues that even if Hynix has broader application, its cease-and-desist letters
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`(petitioning activity) did not further the anticompetitive scheme that involved the blocking of
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`access to its website (nonpetitioning activity). LinkedIn points out that its first cease-and-desist
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`letter was issued before it blocked hiQ’s access to the website. See Reply at 7 (“The [first] letter
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`preceded any technical cut-off by a full month.”). But LinkedIn’s position is problematic for two
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`reasons.
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`• First, LinkedIn’s second cease-and-desist letter was issued on the same day that
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`LinkedIn blocked access. See Mot. at 5 (“LinkedIn implemented IP address blocks
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`on June 24, the same day it sent the second letter.”). Therefore, arguably, the
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`second letter was used to further the anticompetitive scheme involving the
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`blocking.
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`• Second, it is not clear that the causal connection requirement always demands that
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`the anticompetitive petitioning activity come after the anticompetitive
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`nonpetitioning activity; a cease-and-desist letter that comes before the actual
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`blocking still reinforces the overall anticompetitive scheme.
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`At bottom, LinkedIn’s argument defies the fundamental logic of Hynix.
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`Finally, LinkedIn contends that, should the Court favor hiQ on the above arguments, then
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`the Court should – at the very least – restrict hiQ’s damages claims. More specifically, LinkedIn
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`maintains that, if the anticompetitive nonpetitioning activity is the blocking of hiQ’s access, then
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`damages should be limited to the timeframe when hiQ was actually blocked – a “six-day period in
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`June 2017.” Mot. at 9 (arguing that “any claim for damages for lack of access for any other
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 9 of 21
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`period is necessarily based on LinkedIn’s letters and should be dismissed”) (emphasis in original);
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`see also Reply at 6. But LinkedIn’s position is not persuasive because, even if petitioning activity
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`arguably cannot be a basis for liability under the Noerr-Pennington doctrine, that does not mean
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`that a plaintiff cannot get damages based on the petitioning activity,2 and the petitioning activity
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`can take place at a different time than the nonpetitioning activity. Furthermore, LinkedIn takes too
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`narrow a view of the impact that the nonpetitioning activity (blocking of access) could have – that
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`impact could extend beyond the time of the actual blocking. For example, even if the actual
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`blocking lasted for only six days, it seems plausible that this conduct might dissuade hiQ
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`customers from subsequently signing up for hiQ’s people analytics services. Cf. Arista (Docket
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`No. 281) (Order at 21-22) (noting that “a reasonable jury could find that [the defendant] raised the
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`specter of the . . . lawsuit to persuade customers to abandon [the defendant’s] competitors”).
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`Accordingly, the Noerr-Pennington doctrine does not bar hiQ’s antitrust and interference
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`claims.
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`2.
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`California Litigation Privilege
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`As noted above, LinkedIn argues that the state claims for intentional interference are also
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`protected by the California litigation privilege. The parties’ briefs indicate that the above analysis
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`for Noerr-Pennington applies here as well. For the reasons stated above, the California litigation
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`privilege is not a bar to hiQ’s interference claims.
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`C.
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`Antitrust Claims: Product Market
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`LinkedIn contends the antitrust claims are still deficient for independent reasons, including
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`a failure on the part of hiQ to adequately allege a product market – i.e., a people analytics market.3
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`2 See Hovenkamp, et al., IP & Antitrust § 11.04[F] (suggesting that liability should not be based
`on protected petitioning but damages are a different matter: “‘a plaintiff that can prove an antitrust
`violation without the use of protected petitioning can recover damages caused by that petitioning
`as well as damages by the conduct that proved the violation’”).
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` 3
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` Technically, hiQ makes reference to two different product markets in the FAC – (1) the market
`for people analytics services and (2) the market for professional social networking platforms. See,
`e.g., FAC ¶ 110 (alleging that “LinkedIn has willfully acquired and maintained monopoly power
`in the relevant markets for professional social networking platforms and people analytics”); FAC ¶
`159 (alleging that “LinkedIn and its members have entered into contracts or combinations that
`have the effect of unreasonably restraining trade . . . in the relevant markets for professional social
`networking platforms and people analytics services”). But LinkedIn challenges only hiQ’s
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 10 of 21
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`A product market “encompass[es] the product at issue as well as all economic substitutes
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`for the product.” Newcal Indus. v. Ikon Office Sol., 513 F.3d 1038, 1045 (9th Cir. 2008). “‘The
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`outer boundaries of a product market are determined by the reasonable interchangeability of use or
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`the cross-elasticity of demand between the product itself and substitutes for it.’”4 Id. “[W]hat
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`constitutes a relevant market is a factual determination for the jury,” Image Tech. Servs. v.
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`Eastman Kodak Co., 125 F.3d 1195, 1203 (9th Cir. 1997); see also Todd v. Exxon Corp., 275 F.3d
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`191, 199-200 (2d Cir. 2001) (stating that, “[b]ecause market definition is a deeply fact-intensive
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`inquiry, courts hesitate to grant motions to dismiss for failure to plead a relevant product market”);
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`however, the relevant market must still be plausibly alleged to make it past a 12(b)(6) challenge.
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`In the instant case, the FAC indicates that people analytics is “a new type of predictive data
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`analytics aimed at providing employers in-depth predictive insights into their workforce.” FAC ¶
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`33. The FAC also alleges that “[p]eople analytics generally work by performing computerized
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`analyses of employees’ public professional information and history.” FAC ¶ 33. Nevertheless,
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`the parameters of the people analytics market – as pled – are vague. Most notably, as the Court
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`discussed with the parties at the hearing, it is not clear what substitutes there are for people
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`analytics products such as those offered by hiQ. Should a product be considered a substitute if the
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`people analytics are based on an employer’s internally maintained data? Should a product be
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`considered a substitute if the people analytics are based on publicly available information other
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`than that available on LinkedIn’s website? Even if more established analytic techniques have
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`become dated, that does not mean there is no substitutability or cross-elasticity of demand between
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`different modes of people analytics.
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`At the hearing, hiQ asserted that a product that uses an employer’s internally maintained
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`data should not be deemed a substitute but the FAC fails to explain why. For example, the FAC
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`attempt to define the people analytics market.
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` 4
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` “Elasticity of demand is a concept used to signify the relationship between changes in price and
`responsive changes in demand.” United States v. LSL Biotechnologies, 379 F.3d 672, 697 (9th
`Cir. 2004); see also Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 469 (1992)
`(indicating that cross-elasticity of demand refers to “the extent to which consumers will change
`their consumption of one product in response to a price change in another”).
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`does not explain why internal data such as performance reviews and resumes should be considered
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`“limited” in nature. FAC ¶ 35. The FAC also fails to explain why, even if an employer was not
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`able to use internal data successfully itself, see FAC ¶ 35 (alleging that “employers tried to
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`manage attrition risk within their organizations through a variety of ad hoc internal methods, and
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`they tried to identify employees’ full skillsets through similarly ad hoc internal means”), the
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`employer could not hire a company to put that data to good use. Indeed, hiQ suggests that that
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`was the conventional approach before hiQ came on the scene with its analytics. It is not plausible
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`to suggest without specific facts that the entire field of analytics using internal data is now
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`obsolete. In fact, it would appear that internal data which might include direct polling could yield
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`information not otherwise accessible via LinkedIn.
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`As for a product that bases its people analytics on publicly available information other than
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`LinkedIn, hiQ made a different argument at the hearing. According to hiQ, in theory, such a
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`product would be a substitute (and thus in the same market as hiQ’s products) but, hiQ
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`maintained, as a practical matter, the only place to get publicly available data is LinkedIn. But
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`similar to above, the FAC contains no specific allegations establishing such. The Court does not
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`doubt that LinkedIn is a useful source for publicly available data given its focus on professional
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`social networking and its prominence in the professional social networking space; however, that
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`does not mean that useful publicly available information cannot be gleaned from other sources
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`such as Google and Facebook or other industry directories and sources. Indeed, in this day and
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`age, it would not be surprising if a person’s digital footprint – even apart from LinkedIn – were
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`enlightening to the analytics task.
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`The Court acknowledges hiQ’s suggestion that products using employer internal data or
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`publicly available data other than LinkedIn’s are different in quality from hiQ’s products – and
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`thus it is at least a question of fact whether there is some elasticity of demand between them and
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`whether those products are in the same market as hiQ’s products. See generally Brown Shoe Co.
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`v. United States, 370 U.S. 294, 326, 82 S. Ct. 1502, 1524-25 (1962) (“agree[ing] with the District
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`Court that in this case a further division of product lines based on ‘price/quality’ differences
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`[medium-priced shoes and low-priced shoes] would be ‘unrealistic’”); see also In re Live Concert
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`Case 3:17-cv-03301-EMC Document 158 Filed 09/09/20 Page 12 of 21
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`Antitrust Litig., 247 F.R.D. 98, 129 (C.D. Cal. 2007) (indicating that consumers may differentiate
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`or distinguish among products based on performance, price, and so forth but that does not
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`necessarily mean that the products are in separate markets). The problem for hiQ is that it has not
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`yet shown that it is plausible that the relevant market should be defined as that which uses only
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`LinkedIn data.
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`Accordingly, the Court finds all of hiQ’s antitrust claims deficient for failure to adequately
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`allege a product market.5 The Court, however, shall give hiQ an opportunity to amend to correct
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`this deficiency.
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`D.
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`Antitrust Claims: Anticompetitive Conduct
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`There are additional reasons why the antitrust claims are not viable as currently pled. In
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`particular, LinkedIn persuasively argues that hiQ has failed to adequately allege anticompetitive
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`conduct.
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`For its first antitrust claim – monopolization in violation of § 2 of the Sherman Act – hiQ
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`alleges as follows:
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`LinkedIn has willfully acquired and maintained monopoly power in
`the relevant markets [i.e., the market for professional social
`networking platforms and the market for people analytics services],
`by means of predatory, exclusionary, and anticompetitive conduct,
`including but not limited to by means of lock-in, raising rivals’
`costs, tying, unilateral refusal to deal, denial of essential facilities,
`and vertically-arranged boycotts . . . .
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`FAC ¶ 112. hiQ repeats these theories for its second antitrust claim, i.e., attempted
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`monopolization). See FAC ¶ 150. For the final antitrust claim – concerted action that
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`unreasonably restrains trade – hiQ asserts the tying and vertical boycott theories only. See FAC ¶
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`162. Each of the above theories, as addressed below, is deficient.
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`1.
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`Unilateral Refusal to Deal
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`As an initial matter, the Court rejects LinkedIn’s contention that hiQ cannot raise a theory
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`of unilateral refusal to deal because, during the Ninth Circuit proceedings, hiQ stated that it was
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`5 Because the Court finds a deficiency in the allegation of a product market, it does not address
`LinkedIn’s argument that hiQ has failed to adequately allege monopoly or market power in the
`relevant market.
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