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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`IN RE GOOGLE DIGITAL
`ADVERTISING ANTITRUST
`LITIGATION
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`Case No. 20-cv-03556-BLF
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`ORDER GRANTING MOTION TO
`DISMISS WITH LEAVE TO AMEND
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`This is a putative class action antitrust lawsuit brought by Plaintiffs Hanson Law Firm, PC,
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`Surefreight Global LLC d/b/a Prana Pets, and Vitor Lindo (collectively, “Plaintiffs”) against
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`Defendants Google LLC and Alphabet Inc. (collectively, “Defendants” or “Google”). First
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`Amended Consolidated Complaint (“FAC”), ECF 52. Before the Court is Google’s motion to
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`dismiss pursuant to Fed. R. Civ. P. 12(b)(1) & (6) on the grounds that Plaintiffs fail to plead
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`claims under the Sherman Act and California’s Unfair Competition Law and that some of the
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`Plaintiffs are bound to arbitration. Mot. to Dismiss (“Mot.”) 1, ECF 66. Plaintiffs oppose. Opp. to
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`Mot. (“Opp.”), ECF 93. The Court heard oral argument on this motion on April 8, 2021. For the
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`reasons stated on the record and detailed below, the Court GRANTS Google’s motion and
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`DISMISSES WITH LEAVE TO AMEND.
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`I.
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`BACKGROUND1
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`Digital advertising consists of search advertising and display advertising. FAC ¶ 30. Search
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`advertising is the placement of advertisements above or alongside the results generated by a search
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`engine. Id. ¶ 31. A search advertisement appears when a consumer performs a search that has a
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`1 Plaintiffs' well-pled factual allegations are accepted as true for purposes of the motion to dismiss.
`See Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011).
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 2 of 12
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`connection to a product or service offered by a company sponsoring the advertisement. Id. When a
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`consumer clicks on the advertisement, the advertiser pays based on a cost-per-click rate. Id. Display
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`advertising, on the other hand, appears next to website content. Id. ¶ 34. Unlike search advertising,
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`which generally appears in a text-only format, display advertising comes in many forms, such as
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`banners, images, and videos. Id. Display advertisers place their advertisements on websites likely to
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`be viewed by their target audience. Id. ¶ 35. Suppliers of display advertising space are website
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`operators and are referred to as publishers. Id. ¶ 36. Publishers rely on third-party tools to find
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`advertisers willing to purchase available ad space. Id. In 2019, $69.9 billion was spent on digital
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`display advertising in the United States, which accounted for about half of the digital advertising
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`market. Id. ¶¶ 37-38. Many publishers rely on display advertising as a major source of revenue. Id.
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`¶ 38.
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`Google is a technology company that provides internet services and products, including
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`online advertising technologies and a search engine. FAC ¶ 24. According to Plaintiffs, “Google is
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`the dominant supplier in the search advertising market and has moved rapidly to control all stages
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`of the display advertising market, as well.” Id. ¶ 40. In 2019, Google earned $135 billion from search
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`and display advertising. Id. Because Google owns the dominant internet search engine, it is “by far
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`the largest supplier of digital search advertising in the United States. Over the last ten years,
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`Google’s share of the digital search advertising supply has ranged between 89% and 93%.” Id. ¶ 45.
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`Google makes space on its search results pages available through an auction process that occurs
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`each time a user runs a search. Id. ¶ 46. According to Plaintiffs, “Google controls (and frequently
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`raises) the price of its search advertising by setting a high reserve price. Doing so enables Google
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`to directly set the price of its search advertisements because an ad will not sell unless its price meets
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`or exceeds the reserve price.” Id. ¶ 47.
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`With respect to online display advertising, 86% of ad space in the United States is bought
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`and sold in real time on electronic trading venues, referred to as advertising exchanges or
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`programmatic real-time bidding. FAC ¶ 50. On the supply side of exchanges, publishers employ
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`publisher ad servers (PAS) to accept, store, and manage ads, choose where and when ads appear,
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`and track the effectiveness of ad campaigns. Id. ¶ 55. Publishers rely on supply-side platforms
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 3 of 12
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`(SSPs) to run auctions, interface directly with their demand-side equivalents (i.e., advertisers), and
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`optimize available inventory. Id. The demand side of exchanges are comprised of advertisers and
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`media agencies. Advertisers and media agencies rely on advertiser ad servers (AAS) to store ads,
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`deliver them to publishers, and record transactions. Id. ¶ 56. Advertisers and media agencies employ
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`demand-side platforms (DSPs) to purchase digital advertising space by bidding in auctions and to
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`manage their bids. Id. The DSP connects to an exchange, which combines inventory from ad
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`networks and SSPs with third-party data from a data management platform or data broker. When an
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`ad space on a publisher’s site becomes available, the ad exchange holds an auction in which the DSP
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`bids on the impression submitted by the ad network or SSP. According to Plaintiffs, Google owns
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`and operates the dominant ad exchanges. Id. ¶¶ 48-50.
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`The PAS, SSPs, AAS, and DSPs—the set of intermediary exchanges and platforms that
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`advertisers and publishers use to buy, sell, and place display ads—make up the ad tech stack:
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`FAC ¶ 48, 58. Google “captures well over 50% of the market across the ad tech stack.” Id. ¶ 48. In
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`the past, different entities provided the various functions across the stack, and intermediaries in the
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`stack did not own publishers or advertisers. Id. ¶ 59. This is no longer the case because, after a series
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`of acquisitions, “Google now dominates and controls the ad stack as a whole.” Id. ¶ 59.
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`According to Plaintiffs, Google’s acquisitions in the ad tech stack over the past fifteen years
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`have “[given] it access to and made it a major player at every level of the display advertising service
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`industry, and have enabled Google to exclude competition through a variety of anticompetitive
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`policies and activities.” FAC ¶ 60; see, e.g., id. ¶¶ 61-76 (detailing acquisitions). Plaintiffs further
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`contend that Google has leveraged its dominance in search and search advertising and its control of
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`user data to gain a monopoly in the brokerage of display advertising. Id. ¶¶ 77-99. Google also
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`allegedly harms purchasers and sellers within the online advertisement ecosystem by tying its
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 4 of 12
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`display advertising services to its search advertising services. Id. ¶¶ 100-133. Finally, Google
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`purportedly exploits user data and forecloses technological compatibility. Id. ¶¶ 134-136. Google’s
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`conduct allegedly restrains competition in the market for online display advertising services, which
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`encompasses the overall system that connects display advertisers and publishers. Id. ¶ 183; see also
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`id. ¶¶ 183-206 (describing “Relevant Market”).
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`Based on the above allegations, Plaintiffs filed their class action complaint on May 27, 2020.
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`ECF 1. The operative complaint asserts two causes of action for (1) monopolization in violation of
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`Section 2 of the Sherman Antitrust Act (the “Sherman Act”), 15 U.S.C. § 2, for acquiring and
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`maintaining a monopoly in the relevant market of programmatic display advertising services; and
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`(2) violations of California’ Unfair Competition Law (“UCL”), Cal. Bus. Prof. Code § 17200 et seq.
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`FAC. ¶¶ 236-251. Plaintiffs further request injunctive relief “to restore competition in the relevant
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`market and its constituent submarkets.” Id. at § XI.
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`II.
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`LEGAL STANDARD
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`“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
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`claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation
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`Force v. Salazar, 646 F.3d 1240, 1241-42 (9thCir. 2011) (quoting Navarro v. Block, 250 F.3d729,
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`732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true
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`all well-pled factual allegations and construes them in the light most favorable to the plaintiff.
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`Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court
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`need not “accept as true allegations that contradict matters properly subject to judicial notice” or
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`“allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable
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`inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation
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`marks and citations omitted). While a complaint need not contain detailed factual allegations, it
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`“must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
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`on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
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`U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the court to draw the
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`reasonable inference that the defendant is liable for the misconduct alleged.” Id. On a motion to
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`dismiss, the Court’s review is limited to the face of the complaint and matters judicially
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`noticeable. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star Int’l v.
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`Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983).
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`In deciding whether to grant leave to amend, the Court must consider the factors set forth
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`by the Supreme Court in Foman v. Davis, 371U.S. 178 (1962), and discussed at length by the
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`Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2009). A district
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`court ordinarily must grant leave to amend unless one or more of the Foman factors is present:
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`(1)undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by
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`amendment, (4) undue prejudice to the opposing party, or (5) futility of amendment. Eminence
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`Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the opposing party that carries
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`the greatest weight.” Id. However, a strong showing with respect to one of the other factors may
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`warrant denial of leave to amend. Id.
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`III. ANALYSIS
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`A. Failure to State a Claim: Sherman Act
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`Defendants first argue that Plaintiffs have failed to adequately plead a Sherman Act claim
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`because they have not alleged a plausible relevant market, Mot. at 4-9, or actionable
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`anticompetitive conduct, id. at 9-18. They also contend that Plaintiffs have failed to plead antitrust
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`standing. Id. at 19-20. The Court addresses each concern in turn.
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`1. Relevant Market
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`To state an antitrust claim under the Sherman Act, “plaintiffs must plead a relevant
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`market.” Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1120 (9th Cir. 2018). “While plaintiffs need not
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`plead a relevant market with specificity, ‘there are some legal principles that govern the definition
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`of an antitrust “relevant market,” and a complaint may be dismissed under Rule 12(b)(6) if the
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`complaint's “relevant market” definition is facially unsustainable.’” Id. (brackets and alterations
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`omitted) (quoting Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1045 (9th Cir. 2008)).
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`The relevant market must include a product market, and the product market “must encompass the
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`product at issue as well as all economic substitutes for the product.” Id. (internal quotation marks
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`omitted). “Economic substitutes have a reasonable interchangeability of use or sufficient cross-
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`elasticity of demand with the relevant product.” Id. (internal quotation marks omitted).
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`Defendants raise two main flaws with Plaintiffs’ alleged market. First, they contend that
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`Plaintiffs’ proposed market improperly includes services for both advertisers and publishers. Mot.
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`at 5-6 (“Plaintiffs fail to adequately plead a single relevant product market—because their purported
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`market includes products and services that Plaintiffs and other advertisers admittedly do not
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`purchase or use.” (emphasis added)). Second, they contend that Plaintiffs’ proposed relevant market
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`improperly excludes alternative means of accessing online display advertising. Mot. at 6-7.
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`The Court agrees with Defendants. While Plaintiffs filed a class action complaint against
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`Google for monopolizing the intermediary services that connect advertisers and publishers of
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`display advertisements, see generally FAC, Plaintiffs do not dispute that any future amended
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`complaint will be narrowed to address only the claims of digital advertisers, not digital publishers,
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`see Opp. at 3, 8; ECF 84 at 20:25-21:1. Second, the Court agrees with Defendants that “the alleged
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`market for ‘online display advertising services’ on the ‘open web’ improperly excludes other ways
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`for advertisers to reach publishers without using Google’s services.” Mot. at 6 (quoting FAC ¶ 189).
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`The Court is particularly concerned that Plaintiffs’ market excludes social-media display advertising
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`and direct negotiations. See id. at 6-7. Plaintiffs must allege additional facts that indicate that the
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`categories excepted from the identified market are not economic substitutes to “[d]isplay advertising
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`brokering services.” FAC ¶ 190; see Hicks, 897 F.3d at 112 (relevant market must include “the
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`group or groups of sellers or producers who have actual or potential ability to deprive each other of
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`significant levels of business.”). It is not sufficient for Plaintiffs to allege, for example, that “[t]he
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`close-ended advertising services offered by Facebook, Amazon, Twitter, and Snapchat (among other
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`web businesses) are not . . . reasonable substitutes for the open-ended system Google offers and do
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`not compete for the same business.” FAC ¶ 206. Although recognizing that market definition can be
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`largely factual in nature, see Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 482
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`(1992), the Court nonetheless finds pleading amendments are necessary here and will serve to
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`crystalize Plaintiffs’ theory of the liability and the relevant market definition.
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`2. Anticompetitive Conduct
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`Defendants next argue that Plaintiffs have failed to adequately plead a Sherman Act claim
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`as they have not alleged actionable anticompetitive conduct. Mot. at 9-18. Under Section 2 of the
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`Sherman Act, it is unlawful to “monopolize, or attempt to monopolize, or combine or conspire
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`with any other person or persons, to monopolize any part of the trade or commerce among the
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`several States, or with foreign nations.” 15 U.S.C. § 2. “To plausibly plead a monopolization
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`claim, plaintiffs must allege: (a) the possession of monopoly power in the relevant market; (b) the
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`willful acquisition or maintenance of that power; and (c) causal antitrust injury.” In re Nat'l
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`Football League's Sunday Ticket Antitrust Litig., 933 F.3d 1136, 1159 (9th Cir. 2019) (internal
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`quotation marks omitted). To plead “the willful acquisition or maintenance of monopoly power,”
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`Plaintiffs must plead facts sufficient to show that Google engaged in anticompetitive acts; “mere
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`possession of monopoly power will not be found unlawful unless it is accompanied by an element
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`of anticompetitive conduct.” PNY Techs. v. SanDisk Corp., 2012 WL 1380271, at *10 (N.D. Cal.
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`Apr. 20, 2012).
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`The FAC identifies five areas of alleged anticompetitive conduct: monopoly leveraging,
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`tying, denial of interoperability, the acquisition of rivals, and restricting competitors’ access to
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`information. FAC ¶¶ 126, 238. Defendants argue that (1) Plaintiffs’ monopoly leveraging
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`allegations fail to detail anticompetitive conduct in either the search and digital advertising market,
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`(2) Plaintiffs’ tying allegations fail to plead relevant markets and fail to detail coercive,
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`anticompetitive conduct, (3) Plaintiffs’ denial of interoperability allegations fail to establish that
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`Google has a duty to aid competitors, (4) Plaintiffs’ acquisition of rival allegations fail to establish
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`conduct in violation of Section 2 or within the four-year statute of limitations, and (5) Plaintiffs’
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`restriction of information access allegations lack detail and fail to detail anticompetitive conduct.
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`Mot. at 9-18.
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`The Court has reviewed Plaintiffs’ allegations and the relevant case law and generally credits
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`Defendants’ arguments. As an initial matter, the Court rejects Plaintiffs’ suggestion that their theory
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`may rest on pleadings of the anticompetitive effects of Google’s conduct. See Opp. at 14 (“Plaintiffs
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`plausibly allege that Google’s practices had the ‘overall combined effect’ of entrenching its
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`monopoly power.”). Not so. “[M]ere possession of monopoly power will not be found unlawful
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`unless it is accompanied by an element of anticompetitive conduct.” PNY Techs., 2012 WL
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`1380271, at *10 (emphasis added). Thus, as to each category of conduct Plaintiffs identifies, they
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`must identify facts illustrating the anticompetitive acts Google took to obtain and maintain a
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`monopoly over the digital advertising intermediary services market. For example, with respect to
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`Plaintiffs’ tying allegations, Plaintiffs must allege facts that illustrate what exclusionary agreements
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`or tying arrangements Google used. They must further allege facts that establish why Google’s
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`conduct was coercive, as opposed to merely persuasive.
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`The Court further finds that the statute of limitations poses a significant problem to
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`Plaintiffs’ acquisition-based allegations. See 15 U.S.C. § 15b (four-year limitations period).
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`Plaintiffs explain that the four-year limit does not bar their claim because (1) “Plaintiffs bring a
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`single Section 2 count, encompassing all of Google’s conduct” and (2) “Google’s fraudulent
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`concealment tolls the statute of limitations.” Opp. at 16-17. But for Plaintiffs first theory to survive,
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`they must plead factual allegations that Google’s acquisitions were made in concert with the
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`company’s other anticompetitive conduct. And for Plaintiffs’ fraudulent concealment theory to
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`survive, they must meet the lofty pleading standards set forth in Fed. R. Civ. P. 9(b) and plead with
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`specificity that Google took deliberate, affirmative acts to mislead Plaintiffs and that Plaintiffs acted
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`diligently to uncover the facts giving rise to their claims. Ryan v. Microsoft Corp., 147 F. Supp. 3d
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`868, 886 (N.D. Cal. 2015). Plaintiffs have failed to do either in the operative complaint.
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`Finally, the Court has serious concerns that some of Plaintiffs’ allegations rely on a “duty to
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`deal” theory of antitrust. In particular, the Court highlights Plaintiffs’ allegations regarding Google’s
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`alleged denial of interoperability. For example, Plaintiffs allege that “a user of Google’s
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`DoubleClick ad server has “a much harder time using . . . non-Google buying tool[s]” compared to
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`using Google’s buying tools. FAC ¶¶ 140-141. Plaintiffs insist that these allegations are based on a
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`theory that “Google protected its monopoly by taking affirmative acts to negate the interoperability
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`of systems that previously were interoperable.” Opp. at 20. But “a monopolist has no duty to help
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`its competitors survive or expand when introducing an improved product design.” Allied Orthopedic
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`Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991, 1002 (9th Cir. 2010). And the Court is
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`unlikely to entertain any allegations based solely on the Supreme Court’s reasoning in Aspen Skiing
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`Co. v. Aspen Highlands Skiing Corp, 472 U.S. 585 (1985). See Verizon Commc'ns Inc. v. Law
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`Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 411 (2004) (“we do not believe that traditional
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`antitrust principles justify adding the present case to the few existing exceptions from the
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`proposition that there is no duty to aid competitors”); see also Reveal Chat, 471 F. Supp. 3d at 1002
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`(applying Aspen Skiing). The Court thus encourages Plaintiffs to plead additional facts to establish
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`that Google’s denial of interoperability conduct falls under the ambit of Section 2. See, e.g., Allied
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`Orthopedic, 592 F.3d at 1002 (“A monopolist's discontinuation of its old technology may violate
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`Section 2 if it effectively forces consumers to adopt its new technology.”); In re IBM Peripheral
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`EDP Devices Antitrust Litig., 481 F. Supp. 965, 1003 (N.D. Cal. 1979) (“if a monopolist frequently
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`changed the teleprocessing interface by which its computers communicate with remote terminals in
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`such a way that its terminals would continue to function while others would fail, and, if the only
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`purpose and effect of the change was to gain a competitive advantage in the terminal market (where
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`the monopolist lacked monopoly power), that use of monopoly power would be condemned.”
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`(emphasis added)).
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`3. Antitrust Standing
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`Finally, Defendants contend that Plaintiffs have failed to plead antitrust standing. The Ninth
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`Circuit has held that an antitrust injury consists of five elements: “(1) unlawful conduct, (2) causing
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`an injury to the plaintiff, (3) that flows from that which makes the conduct unlawful, ... (4) that is
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`of the type the antitrust laws were intended to prevent,” and (5) “the injured party [is] a participant
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`in the same market as the alleged malefactors.” Somers v. Apple, Inc., 729 F.3d 953, 963 (9th Cir.
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`2013) (internal quotation marks omitted). In particular, Defendants argue that (1) “Plaintiffs still do
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`not identify what particular ‘intermediation services’ they purchased from Google, and thus fail to
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`trace a link between the unlawful conduct and any injury to them” and (2) “the only form of
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`advertiser injury alleged by the FAC is that ‘advertisers have paid more than they otherwise would
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`have paid.’” Mot. at 19-20.
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`Plaintiffs have sufficiently pled antitrust standing. The FAC alleges that each Plaintiff
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`“sustained antitrust injury by paying supra-competitive prices to Google to broker the placement of
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`its display advertisements on third-party websites. These anticompetitive overcharges directly and
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`proximately resulted from Google’s monopolization of the relevant market.” FAC ¶¶ 13, 18, 23.
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`Plaintiffs further allege that Google’s conduct gave it control over the entire market for digital
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 10 of 12
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`advertising intermediary services, and that each segment of the market experienced price increases.
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`Id. ¶¶ 59-62 (discussing Google’s acquisitions within ad tech stack), 123-27 (discussing price
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`increases), 136 (identifying anticompetitive conduct), 186-88 (discussing Google’s control over
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`submarkets within the ad tech stack). While Defendants believe Plaintiffs must plead additional
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`details regarding the particular tools Plaintiffs used, such granularity is not required in light of
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`Plaintiffs’ overreaching theory. Indeed, Plaintiffs plead that Google controlled the entire
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`intermediary market—not just a particular tool within the market. Defendants second objection, that
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`Plaintiffs must plead additional facts regarding their advertising purchases, fails for similar reasons.
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`In the context of the FAC and Plaintiffs’ holistic theory of liability, the Court is satisfied that
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`Plaintiffs have pled facts tracing their injury, see id. ¶¶ 8-23 (detailing Plaintiffs’ advertising
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`expenditures), to Google’s alleged unlawful conduct, see id. ¶ 136 (summarizing anticompetitive
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`conduct). See Reveal Chat Holdco, LLC v. Facebook, Inc., 471 F. Supp. 3d 981, 997 (N.D. Cal.
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`2020) (plaintiffs must allege an injury “flow[ing] from that which makes the conduct unlawful”).
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`***
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`The Court DISMISSES Plaintiffs’ Sherman Act claim WITH LEAVE TO AMEND.
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`B. Failure to State a Claim: UCL
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`Defendants next argue that Plaintiffs fail to plausibly plead a violation of the UCL. Mot. at
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`20. Both parties agree that Plaintiffs’ UCL claim rises and falls with Plaintiffs’ Sherman Act claim.
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`See id. at 20 (“Plaintiffs’ UCL claim should be dismissed for the same reasons as their Sherman Act
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`claim”); Opp. at 24 (“For all the reasons Plaintiffs state a Sherman Act claim, they adequately plead
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`a UCL claim.”). Because the Court has dismissed Plaintiffs’ Sherman Act claim, the Court
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`DISMISSES Plaintiffs’ UCL claim WITH LEAVE TO AMEND.
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`C. Arbitration
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`Finally, Defendants argue that Plaintiffs Surefreight Global LLC and Lindo are bound to
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`arbitrate their claims, and that their claims should therefore be dismissed pursuant to Fed. R. Civ. P.
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`12(b)(1)&(6). Mot. at 20-24. Plaintiffs respond that Google’s arbitration clause improperly bars
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`injunctions for public relief in violation of McGill v. Citibank, N.A., 2 Cal. 5th 945 (2017).
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` “[P]ublic injunctive relief under the UCL, the CLRA, and the false advertising law is relief
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 11 of 12
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`that has ‘the primary purpose and effect of’ prohibiting unlawful acts that threaten future injury to
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`the general public.” McGill, 2 Cal. 5th at 955 (2017) (quoting Broughton v. Cigna Healthplans of
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`Cal., 21 Cal. 4th 1066, 1077 (1999)). In McGill, the California Supreme Court held that an
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`arbitration provision that waives the right to seek public injunctive relief in any forum is “contrary
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`to California public policy and is thus unenforceable under California law.” Id. at 952, 961; see also
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`Blair v. Rent-A-Ctr., Inc., 928 F.3d 819, 830-31 (9th Cir. 2019) (holding that “the FAA does not
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`preempt the McGill rule”).
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`Pursuant to their UCL claim, Plaintiffs seek injunctive relief “to benefit the public from the
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`lower prices and greater innovation that will prevail in competitive digital advertising markets in
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`the absence of Google’s monopoly.” FAC ¶ 251. They also request “equitable relief as appropriate
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`to halt Google’s monopoly conduct and restore competition in the relevant market.” FAC ¶¶ 243,
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`245. Defendants argue that Plaintiffs’ injunction is vague and benefits only class member publishers
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`and advertisers—not the public as a whole. Mot. at 23-24. They further contend that Surefreight
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`Global LLC and Lindo may not seek any public injunctive relief under the Sherman Act. Mot. at
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`23. Plaintiffs respond that “[f]urther details [of the injunction] will be ‘crystallized at later stages of
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`the proceedings, such as summary judgment and trial.’” Opp. at 25 (quoting Mahroom v. Best W.
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`Int’l, Inc., 2009 WL 248262, at *2 (N.D. Cal. Feb. 2, 2009)).
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`Plaintiffs’ requested injunctive relief is focused on “prohibiting unlawful acts that threaten
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`future injury to the general public.” McGill, 2 Cal. 5th at 951. The purpose of antitrust is to protect
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`and promote competition to properly allocate economic resources. See City of Lafayette, La. v.
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`Louisiana Power & Light Co., 435 U.S. 389, 398, 98 S. Ct. 1123, 1129, 55 L. Ed. 2d 364 (1978)
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`(explaining that Congress “sought to establish a regime of competition as the fundamental principle
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`governing commerce in this country” in passing the Sherman Act”); Reiffin v. Microsoft Corp., 158
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`F. Supp. 2d 1016, 1034 (N.D. Cal. 2001) (“The Sherman Act was enacted ‘to preserve the health of
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`the competitive process’”). The Court is unpersuaded that the injunctive relief Plaintiffs request
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`pursuant to their UCL claim—which is derivative of Plaintiffs’ Sherman Act claim—falls outside
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`the scope of conduct prescribed by McGill. See, e.g., Snarr v. HRB Tax Grp., Inc., 839 F. App'x 53,
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`55 (9th Cir. 2020) (public relief includes relief that enjoins “deceptive practices directed at the
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`Case 5:20-cv-03556-BLF Document 143 Filed 05/13/21 Page 12 of 12
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`public” or “future violations of the UCL and CLRA related to pricing”).
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`The Court credits Defendants’ concern that Surefreight Global LLC and Lindo may not seek
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`public injunctive relief under the Sherman Act. See Rogers v. Lyft, Inc., 452 F. Supp. 3d 904, 919
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`(N.D. Cal. 2020) (“The public injunction is a creature of California law . . . .”). Plaintiffs’ brief
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`overture to the contrary, Opp. at 25, fails to convince the Court that Surefreight Global LLC and
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`Lindo’s Sherman Act claim survives. Nonetheless, the Court is not prepared to bind Surefreight
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`Global LLC and Lindo to arbitration on the claim at this juncture in light of the amendments
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`discussed above and (2) the fact that Hanson Law Firm, PC’s Sherman Act claim is not subject to
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`arbitration. This conclusion is buttressed by the fact that the Court has not yet had an opportunity to
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`fully analyze Plaintiffs’ UCL claim and its interplay with Plaintiffs’ requested relief under the
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`Sherman Act. The Court will analyze this issue further in light of Plaintiffs’ best pleadings. The
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`Court also invites the parties to further consider the implications of Rogers v. Lyft in future motion
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`practice. See 452 F. Supp. 3d at 918-921.
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`IV. ORDER
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`The Court GRANTS Defendants’ Motion to Dismiss WITH LEAVE TO AMEND.
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`Plaintiffs SHALL file an amended complaint no later than June 14, 2021.
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`IT IS SO ORDERED.
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`Dated: May 13, 2021
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`______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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