Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 1 of 15
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`MARIAM DAVITASHVILI, et al.,
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`Plaintiffs,
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`v.
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`GRUBHUB INC., et al.,
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`Defendants.
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`Case No. 1:20-cv-03000 (LAK)
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`ECF Case
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`Electronically filed
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`REPLY MEMORANDUM OF LAW
`IN SUPPORT OF DEFENDANTS’ JOINT MOTION TO
`DISMISS PLAINTIFFS’ AMENDED CONSOLIDATED CLASS ACTION COMPLAINT
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 2 of 15
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`TABLE OF CONTENTS
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`TABLE OF AUTHORITIES .......................................................................................................... ii
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`I.
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`PLAINTIFFS FAIL TO PLAUSIBLY ALLEGE COGNIZABLE
`ANTICOMPETITIVE EFFECTS IN THE “DIRECT” MARKETS (COUNT I). ..............2
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`A.
`
`B.
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`As a Matter of Law, Alleged Harm in the “Direct” Markets Is Insufficient
`Without Harm to Competition Among Meal-Ordering Platforms. ..........................2
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`Plaintiffs Fail to Directly or Indirectly Allege Anticompetitive Effects in
`the “Direct” Markets. ...............................................................................................3
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`II.
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`PLAINTIFFS FAIL TO PLAUSIBLY ALLEGE ANTICOMPETITIVE
`EFFECTS IN THE PURPORTED PLATFORM MARKET (COUNT II). ........................4
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`A.
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`B.
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`Plaintiffs Fail to Allege That the Inter-Platform NDPs Cause Actual
`Anticompetitive Effects in the Purported Platform Market. ....................................4
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`Plaintiffs Fail to Allege Durable Market Power or Other Indirect Indicia of
`Anticompetitive Effects in the Purported Platform Market. ....................................6
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`III.
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`PLAINTIFFS FAIL TO ALLEGE A PLAUSIBLE RELEVANT MARKET
`(COUNTS I AND II). ..........................................................................................................7
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`A.
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`B.
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`Plaintiffs Fail to Allege a Plausible Product Market. ..............................................7
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`Plaintiffs Fail to Allege a Plausible National Platform Market. ..............................9
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`IV.
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`PLAINTIFFS’ DERIVATIVE STATE LAW CLAIMS SHOULD BE
`DISMISSED (COUNTS III AND IV). ..............................................................................10
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`CONCLUSION ............................................................................................................................. 10
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`i
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 3 of 15
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`TABLE OF AUTHORITIES
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`CASES
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`Page(s)
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`In re Aluminum Warehousing Antitrust Litigation,
`833 F.3d 151 (2d Cir. 2016).............................................................................................2, 3
`
`Bookhouse of Stuyvesant Plaza, Inc. v. Amazon.com, Inc.,
`985 F. Supp. 2d 612 (S.D.N.Y. 2013)..................................................................................8
`
`Commercial Data Servers, Inc. v. International Business Machines Corp.,
`262 F. Supp. 2d 50 (S.D.N.Y. 2003)....................................................................................7
`
`Electronics Communications Corp. v. Toshiba America Consumer Products, Inc.,
`129 F.3d 240 (2d Cir. 1997).................................................................................................9
`
`Heerwagen v. Clear Channel Communications,
`435 F.3d 219 (2d Cir. 2006)...........................................................................................9, 10
`
`In re Keurig Green Mountain Single-Serve Coffee Antitrust Litigation,
`383 F. Supp. 3d 187 (S.D.N.Y. 2019)..................................................................................8
`
`Leegin Creative Leather Products, Inc. v. PSKS, Inc.,
`551 U.S. 877 (2007) .............................................................................................................4
`
`Mathias v. Daily News, L.P.,
`152 F. Supp. 2d 465 (S.D.N.Y. 2001)..................................................................................8
`
`Meyer v. Kalanick,
`174 F. Supp. 3d 817 (S.D.N.Y. 2016)..................................................................................8
`
`New York v. Deutsche Telekom AG,
`439 F. Supp. 3d 179 (S.D.N.Y. 2020)................................................................................10
`
`Ohio v. American Express Co.,
`138 S. Ct. 2274 (2018) .....................................................................................................6, 9
`
`People v. Tempur-Pedic International, Inc.,
`944 N.Y.S.2d 518 (1st Dep’t 2012) ...................................................................................10
`
`Prime International Trading, Ltd. v. BP PLC,
`784 F. App’x 4 (2d Cir. 2019) .............................................................................................3
`
`R.J. Reynolds Tobacco Co. v. Cigarettes Cheaper!,
`462 F.3d 690 (7th Cir. 2006) ...............................................................................................7
`
`ii
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 4 of 15
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`Sentry Data Systems, Inc. v. CVS Health,
`379 F. Supp. 3d 1320 (S.D. Fla. 2019) ..............................................................................10
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`Spinelli v. NFL,
`903 F.3d 185 (2d Cir. 2018).................................................................................................3
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`Tops Markets, Inc. v. Quality Markets, Inc.,
`142 F.3d 90 (2d Cir. 1998)...................................................................................................7
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`Toys "R" Us, Inc. v. FTC,
`221 F.3d 928 (7th Cir. 2000) ...............................................................................................7
`
`TSI Products, Inc. v. Armor All/STP Products Co.,
`No. 3:18-cv-1682 (MPS), 2019 WL 4600310 (D. Conn. Sept. 23, 2019) ...........................8
`
`United States v. Visa U.S.A., Inc.,
`344 F.3d 229 (2d Cir. 2003).................................................................................................7
`
`WorldHomeCenter.com, Inc. v. PLC Lighting, Inc.,
`851 F. Supp. 2d 494 (S.D.N.Y. 2011)................................................................................10
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`Wright v. Ernst & Young LLP,
`152 F.3d 169 (2d Cir. 1998)...............................................................................................10
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`In re Zinc Antitrust Litigation,
`155 F. Supp. 3d 337 (S.D.N.Y. 2016)..................................................................................3
`
`OTHER AUTHORITIES
`
`Rani Molla, Grubhub sale rumors highlight the state of the struggling food-delivery
`industry, Vox (Jan. 9, 2020),
`https://www.vox.com/recode/2020/1/9/21058674/grubhub-sale-food-delivery-
`struggling-industry ...............................................................................................................6
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`iii
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 5 of 15
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`Plaintiffs’ opposition brief does not salvage their claims. Plaintiffs fail to overcome that
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`they are challenging contractual provisions that prevent restaurants from charging higher menu
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`prices to consumers on Defendants’ platforms. Plaintiffs also ignore their factual allegations
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`suggesting Defendants compete in a growing and competitive marketplace for food delivery
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`services where neither consumers nor restaurants are forced to use any Defendant’s platform.
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`And Plaintiffs provide no answer to the obvious flaw in their theory of harm: DoorDash, the
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`largest platform, does not use the challenged provisions, and restaurants and consumers are free
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`to switch to that platform.
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`As the opposition confirms, Counts I and III allege that the restrictions on restaurants
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`charging higher menu prices on Defendants’ platforms than they do for items sold directly cause
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`anticompetitive effects in the direct channels, where Defendants do not compete. Plaintiffs’ own
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`precedent shows, however, that they must allege harm to a market in which Defendants do
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`compete, and Plaintiffs do not—and cannot—allege that these restrictions reduce competition in
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`the purportedly separate platform market. Plaintiffs’ arguments reveal their Catch-22 problem:
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`the restrictions on higher restaurant pricing in the direct channels could harm competition only if
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`meal-ordering platforms and restaurants’ direct channels were part of the same product market.
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`But Plaintiffs have not pled such a market because Defendants would have a minuscule market
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`share and their restrictions could not conceivably cause market-wide harm.
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`Opposing dismissal of Counts II and IV, Plaintiffs repeat only conclusory allegations of
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`anticompetitive effects in the platform channel from inter-platform NDPs that are allegedly in
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`Uber Eats and Grubhub’s contracts. They do not address the disconnect between their assertion
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`that Uber Eats and Grubhub force restaurants to accept inter-platform NDPs and their factual
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`allegations suggesting that customers use multiple platforms interchangeably and that Uber Eats
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`1
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 6 of 15
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`and Grubhub compete with Postmates, DoorDash, and other platforms that do not use inter-
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`platform NDPs.
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`Plaintiffs’ claims should be dismissed with prejudice.
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`I.
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`PLAINTIFFS FAIL TO PLAUSIBLY ALLEGE COGNIZABLE
`ANTICOMPETITIVE EFFECTS IN THE “DIRECT” MARKETS (COUNT I).
`
`A.
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`As a Matter of Law, Alleged Harm in the “Direct” Markets Is Insufficient
`Without Harm to Competition Among Meal-Ordering Platforms.
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`Plaintiffs do not allege that Defendants compete in the “direct” markets. See Mem. 10-
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`11. Nevertheless, in Count I, Plaintiffs allege that the contractual restrictions on restaurants
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`charging higher menu prices on Defendants’ platforms than in the direct channels are unlawful
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`because they harm competition in the direct channels. See Compl. ¶ 192. Count I should be
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`dismissed because Plaintiffs do not—and cannot—plausibly allege that these restrictions reduce
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`competition among meal-ordering platforms in the purported platform market. See Mem. 10-11.
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`Plaintiffs cannot fix this fatal deficiency through their inapposite argument that they have
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`antitrust standing because their alleged injury in the direct markets “was inextricably intertwined
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`with the injury the conspirators sought to inflict.” Opp. 16-18.1
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`The “inextricably intertwined” exception to the general rule that an antitrust plaintiff
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`must be a “participant[] in the defendants’ market” addresses only “[t]he universe of potential
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`plaintiffs.” In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151, 158 (2d Cir. 2016). It
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`does not address the substantive element of competitive harm, and thus does not absolve
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`Plaintiffs of their obligation to plausibly allege that the NDPs reduce competition among meal-
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`ordering platforms. Plaintiffs fail to cite a single case that survived a motion to dismiss where
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`1 Count I—against all Defendants—does not challenge the inter-platform NDPs that are allegedly used
`only by Grubhub and Uber Eats, and not by Postmates.
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`2
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 7 of 15
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`the challenged agreement did not allegedly reduce competition among competitors in the
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`defendants’ market, and they fail to distinguish the controlling caselaw (discussed in the moving
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`brief) that Section 1 requires such harm. See Opp. 18 n.3.2 Rather, the cases Plaintiffs cite are
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`consistent with this requirement because the conduct at issue in those cases was the “necessary”
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`and “essential” “‘means’ to inflict injury on participants in the defendants’ market.” Aluminum,
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`833 F.3d at 161-63 (emphasis added) (citation omitted); see id. at 159-63 (distinguishing Blue
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`Shield of Virginia v. McCready, 457 U.S. 465 (1982), where the psychiatrists “accomplished
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`their purported goal of harming the psychologists [competitors in the psychotherapy market] by
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`inflicting direct harm on health insurance subscribers”).
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`Plaintiffs’ allegation that the restrictions on menu pricing in the direct channels inhibit
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`competition between each Defendant and its in-network restaurants, see Mem. 11; Opp. 16,
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`could thus support a Section 1 claim only if restaurants and platforms competed in the same
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`market, which Plaintiffs insist is not the case. Count I should be dismissed for this reason alone.
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`B.
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`Plaintiffs Fail to Directly or Indirectly Allege Anticompetitive Effects in the
`“Direct” Markets.
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`Even if Plaintiffs could base Count I on harm to the direct channels, Plaintiffs do not
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`point to any factual allegations of actual (direct) anticompetitive effects in the form of market-
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`wide supracompetitive pricing in those channels. Repetition of narrow allegations about a study
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`of New York restaurants that use GrubHub, see Opp. 22, does not suffice. See Mem. 12-13.
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`2 Plaintiffs ignore that in Spinelli, the Second Circuit held that allegations of competitive harm in the
`market for “stock photography” were irrelevant because they “say nothing” about the market for
`“commercial licenses” in which defendants competed. See Spinelli v. NFL, 903 F.3d 185, 212 (2d Cir.
`2018); see also In re Zinc Antitrust Litig., 155 F. Supp. 3d 337, 365-77 (S.D.N.Y. 2016) (dismissing
`Section 1 claim for lack of plausible allegations of “anticompetitive agreement” in markets in which
`defendants competed). Plaintiffs also do not address the Ninth Circuit’s Qualcomm decision, see Mem.
`11, and in the case Plaintiffs cite involving multiple “relevant markets,” the defendants allegedly
`competed in each of those markets. See Prime Int’l Trading, Ltd. v. BP PLC, 784 F. App’x 4, 7 (2d Cir.
`2019) (defendants competed in both “relevant markets” for physical commodity and linked derivatives).
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`3
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 8 of 15
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`Plaintiffs also cannot plead anticompetitive effects indirectly because Defendants do not
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`set any restaurant’s prices, have no market share, and have no market power in the direct
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`channels. See Mem. 14-16. Plaintiffs do not argue to the contrary. See Opp. 16-24.
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`Plaintiffs’ reliance on Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877
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`(2007) to support their claims of anticompetitive effects, see Opp. 20-23, is misplaced. First, the
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`NDPs are not resale price maintenance agreements; Defendants are platforms, not retailers, and
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`the restaurants’ direct sales to consumers have no intermediary. Second, unlike the resale price
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`maintenance agreements in Leegin, see id. at 21-22, the Complaint makes clear that NDPs set
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`maximum prices, not minimum prices. Third, Plaintiffs’ allegations do not invoke either concern
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`about retailer-led price restraints noted in Leegin—Plaintiffs do not allege a retailer cartel, and
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`they do not allege that any Defendant is “dominant” (nor could they, given DoorDash’s position
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`and all the new entrants to the marketplace). See 551 U.S. at 893, 897-98.
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`Finally, even under Plaintiffs’ strained reading of Leegin, this case does not present the
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`circumstances the Court identified in which vertical agreements might cause concern. Plaintiffs
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`have not alleged facts sufficient to show that: (i) NDPs drive restaurants to charge uniform
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`prices, see Mem. 12-14, 17-18; (ii) restaurants cannot forgo contracting with any individual
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`Defendant, see id. at 14-16, 21-23; (iii) NDPs force the restaurants to charge supracompetitive
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`prices to consumers, see id. at 12-14, 17-18; or (iv) that any Defendant possesses power in any
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`market on the correct, transaction-share basis, see id. at 21; infra pp. 6-7.
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`II.
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`PLAINTIFFS FAIL TO PLAUSIBLY ALLEGE ANTICOMPETITIVE EFFECTS
`IN THE PURPORTED PLATFORM MARKET (COUNT II).
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`A.
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`Plaintiffs Fail to Allege That the Inter-Platform NDPs Cause Actual
`Anticompetitive Effects in the Purported Platform Market.
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`In Count II, Plaintiffs challenge Grubhub and Uber’s inter-platform NDPs. They argue
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`that without these restrictions, “restaurants could—and would—offer lower Restaurant List
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`4
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 9 of 15
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`Prices through Restaurant Platforms that offered lower Restaurant Commission Rates.” Opp. 25.
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`They do not, however, make factual allegations that restaurants would switch to other platforms,
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`or that menu prices would decrease, but for the inter-platform NDPs. See Mem. 17-18.
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`Instead, Plaintiffs point to conclusory assertions and allegations that are insufficient to
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`suggest market-wide anticompetitive effects. See Opp. 25 (citing Compl. ¶¶ 125-33). Plaintiffs
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`treat their allegations regarding commissions and fees charged to customers as a proxy for
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`elevated menu prices, see id. at 26 & n.7, but fees charged by platforms to consumers do not
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`suggest that inter-platform NDPs in restaurant contracts caused restaurants to charge higher
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`menu prices, see Compl. ¶¶ 43-45, 117. Tellingly, Plaintiffs fail to confront that in their main
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`example of alleged higher menu prices, less than a quarter of New York restaurants raised prices
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`at all. See Mem. 13. And even if Grubhub’s net prices allegedly increased over time and Uber
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`and Grubhub have allegedly high profit margins, see Opp. 26, that does not suggest that
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`restaurant menu prices have increased.
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`The Complaint also does not support Plaintiffs’ argument that inter-platform NDPs cause
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`market-wide anticompetitive effects because “a significant share of restaurants are bound” by
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`those provisions. Id. at 26. As an initial matter, Plaintiffs have not plausibly pled the existence
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`of supracompetitive prices. Further, Plaintiffs’ factual allegation about consumers multi-homing,
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`see Mem. 22-23, belies their claim that restaurants must contract with Grubhub and Uber Eats
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`(as opposed to DoorDash) to reach consumers. And even if Plaintiffs’ allegations about
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`consumer use of platforms is correct, Compl. ¶ 86, that confirms only that at least a majority—
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`and possibly up to 80%—of users on each platform do not use that platform exclusively.
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`Plaintiffs’ assertion that inter-platform NDPs have “caused supracompetitive pricing in
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`the form of inflated Restaurant Commission Rates,” Opp. 27-28, likewise fails. These
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`5
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 10 of 15
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`commissions are charged to restaurants, rather than to Plaintiff consumers. To the extent
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`Plaintiffs assert that restaurants pass these higher rates on to consumers, the alleged restrictions
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`on restaurants charging higher prices on Defendants’ platforms would prevent such pass-through.
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`Finally, Plaintiffs’ attempt to assert anticompetitive effects in the form of reduced choice
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`and quality, see id. at 24, is also insufficient. Their passing references to choice and quality, see
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`Compl. ¶¶ 135-39, cobble together dated news stories, internet surveys, and anecdotes, and do
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`not approach plausibly alleging that the inter-platform NDPs have caused a market-wide
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`reduction in choice or quality. These assertions are also inconsistent with the factual allegations
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`regarding the popularity and growth of meal-ordering platforms. See id. at ¶¶ 2, 52, 79.
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`B.
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`Plaintiffs Fail to Allege Durable Market Power or Other Indirect Indicia of
`Anticompetitive Effects in the Purported Platform Market.
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`Plaintiffs do not allege facts suggesting that Grubhub and Uber Eats each possess durable
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`market power in the platform market. See Mem. 19-23. Plaintiffs contend they have alleged
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`such market power based on the number of restaurants that contract with each platform. See
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`Opp. 29-30. But volume of transactions, not number of users, is the appropriate market share
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`metric for two-sided transaction platforms. See Ohio v. Am. Express Co., 138 S. Ct. 2274, 2286
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`& n.8 (2018) (because two-sided transaction platforms “cannot make a sale unless both sides of
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`the platform simultaneously agree to use their services,” they “are best understood as supplying
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`only one product—transactions”).
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`Plaintiffs likewise cannot show durable market power based on a survey reporting market
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`shares from a single month ranging from 20% to 31%. See Opp. 30. First, Plaintiffs ignore the
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`6
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 11 of 15
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`premise of the article from which they derive these shares,3 which is that Grubhub faces “tough
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`competition” from many firms and a declining market share. Second, virtually all of the market
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`shares pled are below the threshold typically required to state a Section 1 claim. See Com. Data
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`Servers, Inc. v. Int’l Bus. Machs. Corp., 262 F. Supp. 2d 50, 74 (S.D.N.Y. 2003) (“Courts have
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`consistently held that firms with market shares of less than 30% are presumptively incapable of
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`exercising market power.” (citation omitted)). Third, Plaintiffs conspicuously omit that they
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`have alleged a growing market and lots of entry, see Compl. ¶¶ 2, 15, 31, 110, belying their
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`conclusory assertion of high barriers to entry. Plaintiffs’ cases, see Opp. 30, are not to the
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`contrary because they involved higher market shares, horizontal conspiracies in addition to
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`vertical agreements, and/or independent evidence of market power.4
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`Finally, Plaintiffs’ assertion that they have pled “other evidence of Grubhub’s and Uber’s
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`market power,” id. at 32-33, is largely duplicative of their arguments that they have pled direct
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`evidence of anticompetitive effects, and they fail for the same reasons, see supra pp. 4-6.
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`III.
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`PLAINTIFFS FAIL TO ALLEGE A PLAUSIBLE RELEVANT MARKET
`(COUNTS I AND II).
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`A.
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`Plaintiffs Fail to Allege a Plausible Product Market.
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`Plaintiffs agree that the test for pleading a plausible product market turns on the
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`“interchangeability of use or the cross-elasticity of demand.” Mem. 23-24; Opp. 9. And
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`3 Rani Molla, Grubhub sale rumors highlight the state of the struggling food-delivery industry, Vox (Jan.
`9, 2020), https://www.vox.com/recode/2020/1/9/21058674/grubhub-sale-food-delivery-struggling-
`industry.
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`4 See R.J. Reynolds Tobacco Co. v. Cigarettes Cheaper!, 462 F.3d 690, 694-95 (7th Cir. 2006) (direct
`evidence of market power; 25% market share “irrelevant”); United States v. Visa U.S.A., Inc., 344 F.3d
`229, 239-40 (2d Cir. 2003) (combined 73% market share; direct evidence of market power); Toys "R" Us,
`Inc. v. FTC, 221 F.3d 928, 934, 937 (7th Cir. 2000) (concerted action; direct evidence of market power).
`Although Plaintiffs correctly note that Tops Markets, Inc. v. Quality Markets, Inc., 142 F.3d 90 (2d Cir.
`1998) concerned monopoly power, their cases do not endorse their proposed durable market share test.
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`7
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 12 of 15
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`Plaintiffs concede that ordering a meal from a restaurant can be a substitute for ordering the same
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`meal over a meal-ordering platform. See Opp. 12. But Plaintiffs dispute that their factual
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`allegations suggest that restaurants and meal-ordering platforms compete in the same market to
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`sell takeout and delivery meals because: (i) meal-ordering platforms offer functionality that some
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`restaurants choose not to offer, see id. at 10-11; (ii) there is “some,” but not enough cross-
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`elasticity of demand between direct channels and meal-ordering platforms, id. at 11-13; and
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`(iii) meal-ordering platforms “have profitably raised prices because not enough customers have
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`switched to other products,” id. at 13. Each of these arguments is incorrect.
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`First, that meal-ordering platforms offer some functionality that some restaurants choose
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`not to offer does not justify separate markets, as “[r]easonable interchangeability fully
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`acknowledges differences in product characteristics.” Mathias v. Daily News, L.P., 152 F. Supp.
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`2d 465, 482 (S.D.N.Y. 2001). Like features that differentiate meal-ordering platforms from each
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`other—e.g., consumer packages waiving monthly service fees, see Compl. ¶¶ 72-73—these
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`differences suggest only that certain restaurants and meal-ordering platforms have chosen to
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`compete for consumers’ orders by offering different services. This same rationale explains why,
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`in Bookhouse, the court held that e-readers and physical books are part of the same product
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`market even though unlike a physical book, an e-reader allows a consumer to instantly purchase,
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`receive, and read a book electronically. See Bookhouse of Stuyvesant Plaza, Inc. v. Amazon.com,
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`Inc., 985 F. Supp. 2d 612, 621 (S.D.N.Y. 2013).5
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`5 The cases Plaintiffs cite are not to the contrary. In TSI Products, Inc. v. Armor All/STP Products Co.,
`the value-added kits had significant “uses separate from other products.” No. 3:18-cv-1682 (MPS), 2019
`WL 4600310, at *12-13 (D. Conn. Sept. 23, 2019). And in both Keurig and Meyer, the complaint at
`issue—unlike Plaintiffs’ claims here—provided factual allegations to support a narrowly-defined market.
`See 383 F. Supp. 3d 187, 226-27 (S.D.N.Y. 2019); Meyer v. Kalanick, 174 F. Supp. 3d 817, 827-28
`(S.D.N.Y. 2016).
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`8
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 13 of 15
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`Second, Plaintiffs fail to identify any factual allegation that contradicts the substantial
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`alleged competition between the direct and platform channels, see Mem. 25, and that supports
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`their assertion that cross-elasticity between the direct channels and platforms is “low.” Opp. 12.
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`Third, as Plaintiffs acknowledge, an increase in meal-ordering platforms’ fees without
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`substantial switching to direct channels does not suggest separate markets unless those fees were
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`already supracompetitive and Defendants had substantial market power. See id. at 13. Plaintiffs
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`have failed to plausibly allege either prerequisite. See supra pp. 4-7.
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`Finally, Plaintiffs misinterpret the Supreme Court’s statement in American Express that
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`“[o]nly other two-sided platforms can compete with a two-sided platform.” 138 S. Ct. at 2287.
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`That might arguably be true with respect to the full complement of transactional services offered
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`by a two-sided platform, but it does not change the fact that consumers seeking a meal choose
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`interchangeably between options provided through the platforms and the options provided by the
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`restaurants themselves. And Plaintiffs are incorrect that NDPs would be per se unlawful if meal-
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`ordering platforms and direct channels comprise the same market, see Opp. 9, as the rule of
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`reason applies to restraints in analogous dual-distribution arrangements. See Elecs. Commc’ns
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`Corp. v. Toshiba Am. Consumer Prods., Inc., 129 F.3d 240, 243 (2d Cir. 1997).
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`B.
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` Plaintiffs Fail to Allege a Plausible National Platform Market.
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` Plaintiffs argue that their proposed nationwide market is plausible because platforms
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`allegedly have a few nationwide agreements with restaurant chains, and operate, advertise,
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`provide similar user experiences, and charge the same fees nationwide. See Opp. 15. However,
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`Plaintiffs fail to acknowledge that a relevant geographic market must consider “both the ‘area in
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`which the seller operates, and to which the purchaser can practicably turn for supplies.’”
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`Heerwagen v. Clear Channel Commc’ns, 435 F.3d 219, 230 (2d Cir. 2006) (citation omitted).
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`Heerwagen rejected a substantively identical argument as the one Plaintiffs offer, and is
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 14 of 15
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`controlling. See id. at 230 (even though the defendant purportedly “conduct[ed] business and
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`set[] prices at a national level,” the market for concert tickets was local, not national, because
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`“only those people in a particular region are likely to buy tickets to concerts in that region”).6
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`IV.
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`PLAINTIFFS’ DERIVATIVE STATE LAW CLAIMS SHOULD BE DISMISSED
`(COUNTS III AND IV).
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`Plaintiffs do not dispute that, if the Complaint fails to state a plausible Section 1 claim,
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`then it also fails to state parallel claims under New York (or any state’s) antitrust law. See Opp.
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`33-34. Rather, Plaintiffs contend that the NDPs are “minimum vertical price-fixing” agreements
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`that “remain[] per se unlawful” under certain state laws. Id. But Counts III and IV do not even
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`purport to allege per se claims—the phrase per se appears nowhere in the Complaint—and
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`Plaintiffs cannot use their brief to amend the Complaint. See Wright v. Ernst & Young LLP, 152
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`F.3d 169, 178 (2d Cir. 1998). In any event, this argument fails to salvage the state law claims
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`because the NDPs do not set minimum resale prices. See supra p. 4. It also fails because the
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`sole state in which Plaintiffs assert they have individual standing to bring a claim, New York,
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`does not condemn such agreements as per se unlawful. See WorldHomeCenter.com, Inc. v. PLC
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`Lighting, Inc., 851 F. Supp. 2d 494, 501-02 (S.D.N.Y. 2011); People v. Tempur-Pedic Int’l, Inc.,
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`944 N.Y.S.2d 518, 519 (1st Dep’t 2012). Lacking plausible individual claims, Plaintiffs cannot
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`assert claims based on other states’ laws. See Mem. 28-29.
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`CONCLUSION
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`For the foregoing reasons, each of Plaintiffs’ claims should be dismissed with prejudice.
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`6 Each case Plaintiffs cite where courts found a nationwide market over the defendants’ objections
`involved contracts with consumers for sales on a nationwide basis. See, e.g., Heerwagen, 435 F.3d at 230
`(stating United States v. Grinnell Corp., 384 U.S. 563 (1966) involved “nationwide contracts with
`customers”); Sentry Data Sys., Inc. v. CVS Health, 379 F. Supp. 3d 1320, 1328 (S.D. Fla. 2019) (CVS
`“contracts with covered entities for provision of 340B contract pharmacy services nationally”); see also
`New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 203 (S.D.N.Y. 2020) (no dispute over
`nationwide geographic market).
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`Case 1:20-cv-03000-LAK Document 42 Filed 01/19/21 Page 15 of 15
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`Dated: Washington, DC
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`January 19, 2021
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`/s/ Steven C. Sunshine
`Steven C. Sunshine
`SKADDEN, ARPS, SLATE,
` MEAGHER, & FLOM, LLP
`1400 New York Avenue N.W.
`Washington, D.C. 20005
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`steve.sunshine@skadden.com
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`Respectfully submitted,
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`/s/ Derek Ludwin (with permission)
`Derek Ludwin
`Stacey K. Grigsby
`COVINGTON & BURLING LLP
`One CityCenter
`850 Tenth Street, N.W.
`Washington, D.C. 20001
`dludwin@cov.com
`sgrigsby@cov.com
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`Andrew A. Ruffino
`COVINGTON & BURLING LLP
`620 Eighth Avenue
`New York, NY 10018
`aruffino@cov.com
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`Counsel for Defendant Uber
`Technologies, Inc.
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`/s/ David J. Lender (with permission)
`David J. Lender
`Eric S. Hochstadt
`WEIL, GOTSHAL & MANGES LLP
`767 Fifth Avenue
`New York, NY 10153
`david.lender@weil.com
`eric.hochstadt@weil.com
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`Counsel for Defendant Grubhub Inc.
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`Karen M. Lent
`Evan Kreiner
`SKADDEN, ARPS, SLATE,
` MEAGHER, & FLOM, LLP
`One Manhattan West
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`New York, NY 10001
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`karen.lent@skadden.com
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`evan.kreiner@skadden.com
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`Counsel for Defendant Postmates Inc.
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`11
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