Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 1 of 19
`
`
`
`
`
`
`John E. Schmidtlein (CA State Bar No. 163520)
`WILLIAMS & CONNOLLY LLP
`725 Twelfth Street, N.W.
`Washington, D.C. 20005
`Telephone:
`(202) 434-5000
`Facsimile:
`(202) 434-5029
`Email:
`jschmidtlein@wc.com
`
`Attorney for Defendant Google LLC
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
`
`Case No. 4:21-cv-00229-HSG
`LLC’S
`DEFENDANT
`GOOGLE
`NOTICE OF MOTION AND PARTIAL
`MOTION
`TO
`DISMISS
`FIRST
`AMENDED
`COMPLAINT
`AND
`MOTION
`TO
`STRIKE:
`MEMORANDUM OF POINTS AND
`AUTHORITIES
`IN
`SUPPORT
`THEREOF
`Hearing Date: September 9, 2021
` Time: 2:00 p.m.
` Place: Courtroom 2
` Judge: Hon. Haywood S. Gilliam, Jr.
`
`
`
`RUMBLE, INC.,
`Plaintiff,
`
`v.
`GOOGLE LLC and DOES 1-10, inclusive,
`Defendants.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`

`

`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 2 of 19
`
`
`
`WILLIAMS & CONNOLLY LLP
`By: /s/ John E. Schmidtlein
`
`John E. Schmidtlein (CA State Bar No. 163520)
`WILLIAMS & CONNOLLY LLP
`725 Twelfth Street, N.W.
`Washington, D.C. 20005
`Telephone:
`(202) 434-5000
`Facsimile:
`(202) 434-5029
`Email:
`jschmidtlein@wc.com
`
` Attorney for Defendant Google LLC
`
`
`
`NOTICE OF MOTION
`
`TO THE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF RECORD:
`
`PLEASE TAKE NOTICE that on September 9, 2021, at 2:00 p.m., or as soon thereafter as
`this matter may be heard, either in Courtroom 2 of this Court, located on the 4th Floor of the United
`States Courthouse, 1301 Clay Street, Oakland, California, or by videoconference or teleconference,
`
`Defendant Google LLC will hereby move the Court for an order dismissing the tying and search
`dominance theories of liability in Plaintiff’s First Amended Complaint and striking the allegations
`in support thereof.
`
`This Motion is made pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds
`that Plaintiff failed to adequately plead coercion and a plausible antitrust injury, which deficiencies
`are fatal to Plaintiff’s tying and search-dominance theories of liability in support of its
`monopolization claim under Section 2 of the Sherman Act. This Motion is also made pursuant to
`Federal Rule of Civil Procedure 12(f) on the grounds that the allegations in paragraphs 34, 35, and
`75 through 176 of Plaintiff’s First Amended Complaint are immaterial and impertinent, and as a
`result the Court should strike them.
`
`The Motion is based upon this Notice; the accompanying Memorandum of Points and
`Authorities; any reply memorandum; the pleadings and files in this action; and such other matters
`Defendant may present at or before the hearing.
`
`DATED: June 16, 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`- i -
`DEFENDANT’S NOTICE OF MOTION
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`
`TABLE OF CONTENTS
`
`
`INTRODUCTION ............................................................................................................................... 1
`
`BACKGROUND ................................................................................................................................. 2
`
`LEGAL STANDARD .......................................................................................................................... 3
`
`ARGUMENT ....................................................................................................................................... 4
`
`
`I. THE COURT SHOULD DISMISS PLAINTIFF’S TYING AND SEARCH-DOMINANCE
`THEORIES AS INADEQUATELY PLEADED ......................................................................... 4
`
` A. Plaintiff has not pleaded facts establishing coercion in support of its tying theory ................... 4
`
`1. Plaintiff has not pleaded that Google coerced device manufacturers into preinstalling
`the YouTube app instead of a possibly desirable substitute ................................................. 5
`2. Plaintiff has not pleaded that its product is a desirable substitute for the YouTube app
` .............................................................................................................................................. 7
`3. Plaintiff's tying allegations address only a subset of the greater alleged video-sharing
`platform market..................................................................................................................... 8
`
` B. Plaintiff failed to plead an antitrust injury as part of its search-dominance allegations ............. 8
`
`II. THE COURT SHOULD STRIKE THE ALLEGATIONS SUPPORTING PLAINTIFF’S
`TYING AND SEARCH-DOMINANCE THEORIES AS
`IMMATERIAL AND
`IMPERTINENT ......................................................................................................................... 11
`
`CONCLUSION .................................................................................................................................. 14
`
`
`
`
`
`
`
`
`
`
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 3 of 19
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`- ii -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 4 of 19
`
`
`TABLE OF AUTHORITIES
`
`
`
`
`
`Page(s)
`
`Cases
`Am. Ad Mgmt., Inc. v. Gen. Tele. Co. of Calif.,
`190 F.3d 1051 (9th Cir. 1999) ............................................................................................... 10, 11
`Ashcroft v. Iqbal,
`
`556 U.S. 662 (2009) ................................................................................................................... 3, 4
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ....................................................................................................................... 3
`Brantley v. NBC Universal, Inc.,
`675 F.3d 1192 (9th Cir. 2012) ............................................................................................... 5, 6, 7
`Cal. Dep't of Toxic Substances Control v. Alco Pac., Inc.,
`217 F. Supp. 2d 1028 (C.D. Cal. 2002) ....................................................................................... 14
`In re DRAM Antitrust Litig.,
`536 F. Supp. 2d 1129 (N.D. Cal. 2008) ................................................................................. 11, 14
`Fantasy, Inc. v. Fogarty,
`984 F.2d 1524 (9th Cir. 1993) ......................................................................................... 12, 13, 14
`Feitelson v. Google Inc.,
`80 F. Supp. 3d 1019 (N.D. Cal. 2015) ..................................................................................... 8, 10
`FTC v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) ....................................................................................................... 10
`In re Google Digit. Advert. Antitrust Litig.,
`No. 20-cv-03556, 2021 WL 2021990 (N.D. Cal. May 13, 2021) .................................................. 5
`Hu Honua Bioenergy, LLC v. Haw. Elec. Indus., Inc.,
`No. 16-cv-00634, 2018 WL 491780 (D. Haw. Jan. 19, 2018) ..................................................... 10
`Lee v. Hertz Corp.,
`330 F.R.D. 557 (N.D. Cal 2019) .............................................................................................. 4, 14
`Lorenzo v. Qualcomm, Inc.,
`603 F. Supp. 2d 1291 (S.D. Cal. 2009) ........................................................................................ 10
`Moore v. James H. Matthews & Co.,
`550 F.2d 1207 (9th Cir. 1977) ............................................................................................... 5, 6, 7
`NetApp, Inc. v. Nimble Storage, Inc.,
`No. 13-cv-05058, 2015 WL 400251 (N.D. Cal. Jan. 29, 2015) ............................................. 11, 12
`Overhead Door Corp. v. Nordpal Corp.,
`No. 4-75-Civ. 523, 1978 WL 1479 (D. Minn. Sept. 1, 1978) ...................................................... 14
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`- iii -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 5 of 19
`
`
`Paladin Assocs. Inc. v. Mont. Power Co.,
`
`328 F.3d 1145 (9th Cir. 2003) ....................................................................................................... 5
`Pixels.com, LLC v. Instagram, LLC,
`No. 15-cv-03610, 2015 WL 10943591 (N.D. Cal. Dec. 21, 2015) ........................................ 11, 14
`Reveal Chat Holdco, LLC v. Facebook, Inc.,
`471 F. Supp. 3d 981 (N.D. Cal. 2020) ......................................................................................... 10
`Sahagian v. Genera Corp.,
`
`No. 08-cv-07613, 2009 WL 9504039 (C.D. Cal. July 6, 2009)................................................... 10
`Saroya v. Univ. of the Pac.,
`--- F. Supp. 3d ----, 2020 WL 7013598 (N.D. Cal. Nov. 27, 2020) ....................................... 13, 14
`In re Sensipar (Cinacalcet Hydrochloride Tablets) Antitrust Litig.,
`No. 19-cv-01461, 2020 WL 7022364 (D. Del. Nov. 30, 2020) ..................................................... 3
`Sidibe v. Sutter Health,
`4 F. Supp. 3d. 1160 (N.D. Cal. 2013) ............................................................................................ 7
`Sidney-Vinstein v. A.H. Robins Co.,
`697 F.2d 880 (9th Cir. 1983) ......................................................................................................... 4
`Smith v. eBay Corp.,
`No. 10-cv-03825, 2012 WL 1951971 (N.D. Cal. May 29, 2012) .................................................. 6
`Somers v. Apple, Inc.,
`729 F.3d 953 (9th Cir. 2013) ................................................................................................... 9, 10
`Staley v. Gilead Scis., Inc.,
`No. 19-cv-02573, 2020 WL 5507555 (N.D. Cal. July 29, 2020) .............................................. 3, 4
`Synopsys, Inc. v. ATopTech, Inc.,
`No. 13-cv-02965, 2015 WL 4719048 (N.D. Cal. Aug. 7, 2015) ........................................... 11, 14
`Teradata Corp. v. SAP SE,
`No. 18-cv-03670, 2018 WL 6528009 (N.D. Cal. Dec. 12, 2018) .............................................. 6, 7
`United States v. Google LLC,
`No. 20-cv-03010 (D.D.C. Jan. 15, 2021) ........................................................................... 1, 2, 8, 9
`Whittlestone, Inc. v. Handi-Craft Co.,
`618 F.3d 970 (9th Cir. 2010) ......................................................................................................... 3
`Federal Rules of Civil Procedure
`Fed. R. Civ. P. 12(b)(6).............................................................................................................. 1, 3, 12
`Fed. R. Civ. P. 12(f) ............................................................................................................. 3, 4, 12, 14
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`- iv -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 6 of 19
`
`
`
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`
`INTRODUCTION
`Plaintiff filed this case on January 11, 2021, asserting two claims: (1) that Google allegedly
`
`maintained a monopoly in a United States online video-sharing platform services market in violation
`of Section 2 of the Sherman Act, and (2) that Google allegedly tied its YouTube app to a license for
`
`its Android mobile operating system, in violation of Section 1 of the Sherman Act. (Dkt. 1.) The
`original complaint was based on conjecture, speculation, and uninformed media reports about how
`Google displays and ranks videos on its search engine results pages and how mobile device
`manufacturers license the YouTube app for preinstallation on Android devices. Google filed a Rule
`12(b)(6) motion seeking dismissal of Plaintiff’s Section 1 tying claim. (Dkt. 16.) Rather than defend
`against the motion, Plaintiff filed a First Amended Complaint (“FAC”).
`The FAC jettisons the Section 1 tying claim and asserts only a single Section 2 claim, which
`is based on three distinct theories of liability. Like Plaintiff’s original complaint, the FAC again
`alleges so-called “self-preferencing,” namely, that Google “willfully maintained and abused its
`monopoly power in the U.S. video platform market by . . . rigging its search engine algorithms so
`that YouTube videos will always be listed first and requiring pre-installation and prominent
`placement of Google’s YouTube apps on all Android smartphones in the United States.” (Dkt. 21,
`FAC ¶ 194.)1 The other two theories—spanning over 100 paragraphs newly added to the FAC—
`are based on allegations largely copied from a complaint filed last year by the United States
`Department of Justice (“DOJ”) and certain State Attorneys General. Compare FAC ¶¶ 75-176 with
`Am. Compl., United States v. Google LLC, No. 20-cv-03010 (D.D.C. Jan. 15, 2021), ECF No. 94.
`These theories, which Plaintiff alleges for the first time in its FAC, allege (1) that Google tied its
`YouTube app to other Google apps licensed to Android device manufacturers, see FAC ¶¶ 150-51,
`and (2) that Google unlawfully dominates the search market with agreements involving the
`distribution of its Search product, see FAC ¶¶ 75-176.
`
`The Court should not countenance Plaintiff’s attempt to smuggle the United States v. Google
`allegations into this case. The newly added tying allegations fail to plead coercion—and thus cannot
`
`1 All references to “FAC” below refer to docket entry 21.
`
`
`- 1 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`support a Section 2 monopolization claim. And the search-dominance allegations that Plaintiff
`
`repackages from the United States v. Google complaint are likewise insufficient, as they allege
`monopolization of a general search or search advertising market and therefore cannot support
`Plaintiff’s claim of monopolization of the entirely different alleged video-sharing platform market.
`So that discovery in this case remains focused on the only theory not challenged by this motion—
`
`namely, the allegation that Google “self-preferences” YouTube—Defendant respectfully asks that
`the Court dismiss Plaintiff’s tying and search-dominance liability theories and strike as impertinent
`and immaterial the newly added allegations in paragraphs 34, 35, and 75 through 176 of the FAC.
`BACKGROUND
`Plaintiff hosts a video streaming website that purportedly competes against Google’s
`
`YouTube service. The core of Plaintiff’s original Complaint consisted of allegations that Google’s
`search algorithms are rigged in favor of YouTube as part of a scheme to monopolize a video platform
`market, e.g., that Google “unfairly rigg[ed] its search algorithms such that YouTube is the first listed
`links ‘above the fold’ on its search results page . . . .” (Dkt. 1, Compl. ¶ 3.) These “self-preferencing”
`allegations, which Plaintiff retains in the FAC, include experiments purportedly showing that in
`response to three search queries, Google Search ranked a video on YouTube higher than the same
`video that appeared on other platforms like Plaintiff’s. See, e.g., FAC ¶¶ 9-13, 69-74. Google does
`not seek dismissal of these allegations at the pleading stage; rather, Google will disprove this patently
`erroneous theory on summary judgment. As discovery will show, rival search engines like Microsoft
`Bing, Yahoo Search, and DuckDuckGo each return results similar to Google—they too rank
`YouTube’s videos ahead of Rumble’s. This, along with other evidence, will demonstrate that
`Google attempts to return search results most likely to satisfy consumers, regardless of whether such
`results include content found on Google’s YouTube service—and Plaintiff offers no personal
`knowledge of any facts demonstrating otherwise. See FAC ¶¶ 28 (citing a newspaper article
`speculating about Google’s video-search algorithm), 29-30 (citing a congressional report relying on
`the same newspaper article).
`
`Rather than stand on the original allegations to prove its monopolization claim, Plaintiff’s
`FAC also attempts to inject into this case legally deficient and irrelevant allegations, some copied
`
`
`
`- 2 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 7 of 19
`
`
`
`
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`from a different lawsuit involving different legal claims and markets. In particular, Plaintiff now
`
`claims that Google’s Mobile Application Distribution Agreements (MADAs) are unlawful tying
`agreements. FAC ¶¶ 150-51, 155. Plaintiff also claims that Google’s search distribution agreements
`with smartphone, tablet, and browser manufacturers amount to monopolization of the general search
`market. FAC ¶¶ 75-176. These allegations are all derived from complaints filed by DOJ and various
`
`State Attorneys General in the United States District Court for the District of Columbia. As
`explained below, Plaintiff’s new allegations are fatally flawed and irrelevant to its core “self-
`preferencing” theory, and thus should be dismissed and stricken from the FAC.
`LEGAL STANDARD
`“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
`
`as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
`(2009) (internal quotation marks omitted). Despite this liberal standard, the Supreme Court has
`warned: “it is one thing to be cautious before dismissing an antitrust complaint in advance of
`discovery, but quite another to forget that proceeding to antitrust discovery can be expensive.” Bell
`Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).
`
`When a plaintiff advances multiple theories of liability in support of a single monopolization
`claim, courts may consider each theory separately and dismiss the improperly pleaded theories
`accordingly. As another court in this District recently explained in the context of a monopolization
`claim under Sections 1 and 2 of the Sherman Act, “[o]ften, a plaintiff asserts a single cause of action
`that is predicated on more than one liability theory, and a court eliminates one theory through a
`motion to dismiss.” Staley v. Gilead Scis., Inc., No. 19-cv-02573, 2020 WL 5507555, at *11 (N.D.
`Cal. July 29, 2020); see also In re Sensipar (Cinacalcet Hydrochloride Tablets) Antitrust Litig., No.
`19-CV-01461, 2020 WL 7022364, at *3-4 (D. Del. Nov. 30, 2020) (dismissing “a portion” of
`Plaintiffs’ theories in support of their single Section 2 claim, while finding that other theories
`survived the motion to dismiss).
`
`Whereas Rule 12(b)(6) motions challenge a complaint’s legal sufficiency, Rule 12(f) motions
`address questions of relevancy. Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973-75 (9th
`Cir. 2010). When a complaint contains “immaterial, impertinent, or scandalous” allegations, the
`
`
`
`- 3 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 8 of 19
`
`
`
`
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 9 of 19
`
`
`
`
`court may strike those allegations to streamline the real issues in the case and “avoid the expenditure
`
`of time and money that must arise from litigating spurious issues.” Sidney-Vinstein v. A.H. Robins
`Co., 697 F.2d 880, 885 (9th Cir. 1983). “A motion to strike should be granted if it will eliminate
`serious risks of prejudice to the moving party, delay, or confusion of issues.” Lee v. Hertz Corp.,
`330 F.R.D. 557, 560 (N.D. Cal 2019).
`
`
`
`ARGUMENT
`Plaintiff’s FAC contains three theories of liability in support of its Section 2 monopolization
`claim. The first is the “self-preferencing” theory carried over from Plaintiff’s original Complaint,
`which alleges that Google “wrongfully divert[ed] massive traffic to YouTube” “[b]y unfairly rigging
`its search algorithms.” FAC ¶ 3. The other two theories, newly introduced in the FAC, allege:
`(1) that Google unlawfully tied its YouTube app to five other Google apps, FAC ¶¶ 150-51, and
`(2) that Google unlawfully maintained a monopoly in the “general search services market,” which
`“allowed Google to unfairly and wrongfully direct massive video search traffic to its wholly-owned
`YouTube platform.” FAC ¶¶ 175, 176. Plaintiff’s new tying theory is facially deficient, as Plaintiff
`fails to plead one of the necessary elements of a tying claim—coercion. And its new search-
`dominance theory is similarly flawed, as Plaintiff fails to allege a plausible antitrust injury. Because
`Plaintiff failed to plead an essential element of both liability theories, the Court should dismiss them
`accordingly. See Iqbal, 556 U.S. at 678; Staley, 2020 WL 5507555, at *11. As a result, the
`allegations in paragraphs 34, 35, and 75 through 176—all of which purport to support these two
`flawed theories—are immaterial and impertinent to the only potentially remaining theory in the
`FAC. The Court should strike these allegations under Rule 12(f). See Lee, 330 F.R.D. at 560.
`
`I.
`
`THE COURT SHOULD DISMISS PLAINTIFF’S TYING AND SEARCH-
`DOMINANCE THEORIES AS INADEQUATELY PLEADED.
`
`Plaintiff has not pleaded facts establishing coercion in support of its tying
`A.
`theory.
`The newly added tying theory in Plaintiff’s FAC is grounded on the assertion that Google,
`through the MADA, ties the YouTube app to other preinstalled Google applications and certain
`Android application programming interfaces. FAC ¶¶ 149-51, 155. But Plaintiff alleges no facts
`plausibly suggesting that Google coerced device manufacturers into accepting the YouTube
`
`
`
`- 4 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 10 of 19
`
`
`
`
`application. At most, Plaintiff pleads that Google offers Android device manufacturers a free group
`
`license to multiple Google apps for preinstallation, including the YouTube app—which Plaintiff
`itself concedes is “genuinely useful” to Android users. See FAC ¶¶ 34, 150-51. Because Plaintiff
`does not plead coercion, which is a necessary element of a well-pleaded tying claim, the Court should
`dismiss Plaintiff’s tying theory from the FAC.
`
`To prevail on an illegal tying claim, a plaintiff must prove three elements: “(1) that there
`exist two distinct products or services in different markets whose sales are tied together; (2) that the
`seller possesses appreciable economic power in the tying product market sufficient to coerce
`acceptance of the tied product; and (3) that the tying arrangement affects a not insubstantial volume
`of commerce in the tied product market.” Paladin Assocs. Inc. v. Mont. Power Co., 328 F.3d 1145,
`1159 (9th Cir. 2003) (internal quotation marks omitted). “Essential to the second element of a tying
`claim is proof that the seller coerced a buyer to purchase the tied product. A plaintiff must present
`evidence that the defendant went beyond persuasion and coerced or forced its customer to buy the
`tied product in order to obtain the tying product.” Id.; see also In re Google Digit. Advert. Antitrust
`Litig., No. 20-cv-03556, 2021 WL 2021990, at *4 (N.D. Cal. May 13, 2021) (explaining that a
`plaintiff must plead facts demonstrating that a defendant’s “conduct was coercive, as opposed to
`merely persuasive”).
`Plaintiff fails to plead coercion for three reasons. As explained below, the FAC does not
`include allegations that: (1) Google coerced device manufacturers into preloading the YouTube app
`instead of a possibly desirable substitute, (2) Plaintiff’s product is a desirable substitute for the
`YouTube app, or (3) Google’s alleged coercion broadly extends across the many types of devices
`used for accessing the alleged video-sharing platform market.
`
`
`1.
`
`Plaintiff has not pleaded that Google coerced device manufacturers into
`preinstalling the YouTube app instead of a possibly desirable substitute.
`“Coercion occurs when the buyer must accept the tied item and forego possibly desirable
`substitutes.” Moore v. James H. Matthews & Co., 550 F.2d 1207, 1217 (9th Cir. 1977) (emphasis
`added); see also Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1199 (9th Cir. 2012) (listing one
`“potential injury to competition threatened by . . . [a] tying arrangement” as “forc[ing] buyers into
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`- 5 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`giving up the purchase of substitutes for the tied product.”). Absent from the FAC are any
`
`allegations that Google forced Android device manufacturers to take the YouTube app over a
`possibly desirable substitute. Plaintiff does not plead, for example, that it attempted to seek
`preinstallation of the Rumble app on even one Android device and was denied for any reason, let
`alone because of YouTube’s preinstallation. Plaintiff also has pleaded no facts suggesting that an
`
`Android device manufacturer ever contacted Plaintiff about preinstalling the Rumble app (assuming
`it qualifies as a “desirable substitute”), or further that a manufacturer did so but ultimately decided
`against such preinstallation because it had already agreed to preinstall the YouTube app. Thus,
`Plaintiff has not alleged that any manufacturer had to “forego” or was “forced” into giving up an
`allegedly desirable substitute product in favor of the YouTube app. See Moore, 550 F.2d at 1217;
`Brantley, 675 F.3d at 1199.
`At most, Plaintiff speculates that “[o]nce the manufacturer is forced to preinstall the
`YouTube app and give it a prime-real-estate location, the manufacturer has no incentive to waste
`space on another video platform app.” FAC ¶ 155. But the FAC fails to explain what “prime-real-
`estate” is given to YouTube, how adding a single additional app “waste[s] space” on the device, or
`why no incentives exist to preinstall the Rumble app. The FAC likewise contains no allegation that
`the MADA requires displaying the YouTube app directly on a device’s default home screen; nor
`could it, as the YouTube app is placed in a folder of Google apps on the default home screen, leaving
`ample room for other apps to be preloaded on the default home screen and other screens on a
`device.2 In addition, Plaintiff does not allege that Google prohibits end users from freely and easily
`downloading the Rumble app, or any other video-sharing platform’s app, onto their Android devices.
`This is not a case of a plaintiff alleging “that they have been precluded from offering [their product]
`as an alternative to [the alleged monopolist].” Smith v. eBay Corp., No. 10-cv-03825, 2012 WL
`1951971, at *4 (N.D. Cal. May 29, 2012) (emphasis added).
`The allegations in the FAC thus fall far below what other courts in this District have found
`“enough to plead an anticompetitive injury.” See Teradata Corp. v. SAP SE, No. 18-cv-03670, 2018
`
`2 If Plaintiff’s reference to “space” is meant to refer to disk space, then the FAC alleges no facts
`plausibly suggesting that the disk space required for the YouTube and Rumble apps poses any
`impediment to a device manufacturer’s preinstallation of both apps.
`
`
`
`- 6 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 11 of 19
`
`
`
`
`
`

`

`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 12 of 19
`
`
`WL 6528009, at *18 (N.D. Cal. Dec. 12, 2018) (finding a tying theory sufficiently pleaded when the
`
`plaintiff alleged “prohibitive costs of switching” from the defendant’s product to the plaintiff’s and
`that the defendant’s conduct “prevent[ed Plaintiff’s] product offerings . . . from entering the
`market”). A buyer with no interest in a substitute is not the same as a buyer who “must . . . forego
`possibly desirable substitutes,” see Moore, 550 F.2d at 1217, or is “force[d] . . . into giving up the
`
`purchase of substitutes for the tied product.” See Brantley, 675 F.3d at 1199. Because the FAC fails
`to allege that any OEM had any interest in installing the Rumble app, the FAC thus fails to allege
`that Google precluded Plaintiff from offering its product as a competitor to YouTube.
`
`Plaintiff has not pleaded that its product is a desirable substitute for the
`YouTube app.
`The FAC contains no plausible allegation that Plaintiff’s Rumble app is a desirable substitute
`that device manufacturers would prefer to preinstall instead of the YouTube app. As explained
`above, Plaintiff alleges nothing that suggests any Android device manufacturer has shown any
`interest in pre-installing the Rumble app. The lack of any allegation concerning device
`manufacturers outside the Android context underscores the point. Even though Plaintiff
`acknowledges that there are devices on other platforms outside the scope of Google’s app
`distribution agreements and thus without YouTube preinstalled (such as devices on Apple’s iOS
`platform, Microsoft’s Windows platform, and Amazon’s Fire OS platforms), see FAC ¶¶ 125, 145,
`Plaintiff cannot allege that Rumble has been preinstalled on any of these devices. In short, the FAC
`fails to allege that any device manufacturer views the Rumble app as a “desirable substitute” to
`preload instead of the YouTube app. See Moore, 550 F.2d at 1217. Thus, Plaintiff has not alleged
`a “significant negative impact on competition in the tied product market” because Plaintiff has not
`alleged that it was hindered from competing in the alleged video-sharing platform market. See
`Sidibe v. Sutter Health, 4 F. Supp. 3d. 1160, 1178 (N.D. Cal. 2013) (“[A] plaintiff must allege and
`ultimately prove facts showing a significant negative impact on competition in the tied product
`market.”).
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`2.
`
`
`
`
`
`
`
`
`
`
`- 7 -
`DEFENDANT’S MEMORANDUM IN SUPPORT OF PARTIAL MOTION TO DISMISS AND MOTION TO STRIKE
`Case No. 4:21-cv-00229-HSG
`
`
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`Case 4:21-cv-00229-HSG Document 32 Filed 06/16/21 Page 13 of 19
`
`
`
`3.
`
`
`Plaintiff’s tying allegations address only a subset of the greater alleged
`
`video-sharing platform market.
`Plaintiff’s tying allegations pertaining to YouTube’s preinstallation on Android devices also
`cannot support a claim of monopolization because Plaintiff has not (and cannot) allege that Android
`has sufficient share in any market that could result in monopolization by YouTube of a video-sharing
`platform market. As Plaintiff admits, Android devices make up a minority of the mobile devices in
`
`the United States, trailing the leading Apple iOS mobile platform that runs on a majority of