{ "attribution": { "source": "legal.exploreworldai.com", "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-7017-2026-07-24", "cite_as": "NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-7017-2026-07-24)", "license": "https://legal.exploreworldai.com/revision", "version": "legal-2026-10-11", "fingerprint": "ewai:us:e0b409", "proof": "sha256:d5b6a0c33e46acba25328023f960b46cbe5184377433499970af495cc6d77596", "jurisdiction": "us", "lang": "en", "publisher": "NovaCopilot by ExploreWorld Legal", "terms": "https://legal.exploreworldai.com/om" }, "brand_source": "Source: NovaCopilot", "item": { "schema_version": "1.0.0", "id": "us:cadc-25-7017-2026-07-24", "jurisdiction": "us", "lang": "en", "brand_source": "Source: NovaCopilot", "brand": { "product": "NovaCopilot", "platform": "ExploreWorldAI", "infrastructure": "ExploreWorld Legal", "infrastructure_url": "legal.exploreworldai.com", "legal_entity": "Valkiv Ventures AB", "permanent_url": "https://legal.exploreworldai.com/novacopilot", "source": "Source: NovaCopilot", "powered_by": "Powered by NovaCopilot", "license": "https://legal.exploreworldai.com/licensvillkor" }, "sections": [ { "title": "United States Court of Appeals", "paragraphs": [] }, { "title": "FOR THE DISTRICT OF COLUMBIA CIRCUIT", "paragraphs": [] }, { "title": "Argued December 11, 2025 Decided July 24, 2026", "paragraphs": [] }, { "title": "No. 25-7017", "paragraphs": [ "para_5" ] }, { "title": "APPELLANT", "paragraphs": [ "para_7", "para_8" ] }, { "title": "APPELLEE", "paragraphs": [] }, { "title": "Appeal from the United States District Court", "paragraphs": [ "para_11" ] }, { "title": "(No. 1:24-cv-00786)", "paragraphs": [] }, { "title": "Matthew I. Summers argued the cause for appellant. With", "paragraphs": [ "para_14" ] }, { "title": "Deborah Elman and Bruce E. Gerstein were on the brief", "paragraphs": [ "para_16", "para_17" ] }, { "title": "Julian Kleinbrodt argued the cause for appellee. With him", "paragraphs": [ "para_19", "para_20", "para_21" ] }, { "title": "2", "paragraphs": [] }, { "title": "PILLARD, Circuit Judge: When the Covid-19 pandemic", "paragraphs": [ "para_24", "para_25", "para_26", "para_27", "para_28", "para_29", "para_30", "para_31", "para_32", "para_33", "para_34" ] }, { "title": "When plaintiff did not submit a brief in opposition to Apple’s", "paragraphs": [ "para_36", "para_37" ] }, { "title": "PhantomALERT’s original complaint without prejudice and", "paragraphs": [ "para_39", "para_40", "para_41" ] }, { "title": "We conclude that the district court’s dismissal order was", "paragraphs": [ "para_43", "para_44", "para_45" ] }, { "title": "PhantomALERT does not dispute that its remaining state-law", "paragraphs": [ "para_47", "para_48", "para_49" ] }, { "title": "The Sherman Antitrust Act of 1890 makes a “basic", "paragraphs": [ "para_51" ] }, { "title": "Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 767", "paragraphs": [] }, { "title": "(1984) (citation omitted), embodied in its two primary", "paragraphs": [ "para_54" ] }, { "title": "3", "paragraphs": [] }, { "title": "Section 1, regarding concerted action (such as by", "paragraphs": [ "para_57", "para_58", "para_59", "para_60", "para_61", "para_62" ] }, { "title": "Inc. v. Indep. Ink, Inc., 547 U.S. 28, 34 (2006). To show that a", "paragraphs": [ "para_64", "para_65", "para_66", "para_67", "para_68", "para_69" ] }, { "title": "Absent that showing of per se illegality, a plaintiff may", "paragraphs": [ "para_71", "para_72" ] }, { "title": "Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49", "paragraphs": [] }, { "title": "(1977). At its core, the purpose of the rule of reason is to", "paragraphs": [ "para_75", "para_76" ] }, { "title": "Nat’l Soc’y of Pro. Engr’s v. United States, 435 U.S. 679, 691", "paragraphs": [] }, { "title": "(1978). Under the rule of reason’s “burden-shifting", "paragraphs": [ "para_79", "para_80", "para_81" ] }, { "title": "(2018); see Microsoft, 253 F.3d at 95. If the plaintiff meets that", "paragraphs": [ "para_83", "para_84" ] }, { "title": "585 U.S. at 541; Microsoft, 253 F.3d at 95, for instance, that", "paragraphs": [ "para_86" ] }, { "title": "Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984)", "paragraphs": [] }, { "title": "(allowing hospital’s tying of anesthesiology services with", "paragraphs": [ "para_89" ] }, { "title": "4", "paragraphs": [ "para_91", "para_92", "para_93", "para_94" ] }, { "title": "Section 2 of the Sherman Act makes it unlawful for a firm", "paragraphs": [ "para_96", "para_97", "para_98", "para_99", "para_100", "para_101", "para_102", "para_103", "para_104", "para_105", "para_106", "para_107", "para_108", "para_109" ] }, { "title": "Anticompetitive conduct under the Sherman Act means", "paragraphs": [ "para_111", "para_112", "para_113" ] }, { "title": "Section 2 claims is evaluated under the rule of reason’s burden", "paragraphs": [ "para_115", "para_116" ] }, { "title": "In its memorandum opinion, the district court reviewed the", "paragraphs": [ "para_118", "para_119", "para_120", "para_121", "para_122" ] }, { "title": "5", "paragraphs": [] }, { "title": "Since 2010, PhantomALERT has provided a traffic app", "paragraphs": [ "para_125", "para_126", "para_127" ] }, { "title": "During that time, PhantomALERT’s traffic app “experienced a", "paragraphs": [ "para_129", "para_130", "para_131", "para_132", "para_133" ] }, { "title": "PhantomALERT “revamped” that app to include Covid-19", "paragraphs": [ "para_135", "para_136", "para_137" ] }, { "title": "14, 2020, however, Apple “announced changes to the App", "paragraphs": [] }, { "title": "Store Review Guidelines,” limiting the App Store’s", "paragraphs": [ "para_140", "para_141" ] }, { "title": "NGOs, companies deeply credentialed in health issues, and", "paragraphs": [ "para_143" ] }, { "title": "Apple’s new Guidelines also required apps in", "paragraphs": [ "para_145", "para_146", "para_147" ] }, { "title": "Apple’s Developer Program License Agreement requires", "paragraphs": [ "para_149", "para_150", "para_151" ] }, { "title": "Pursuant to that requirement and its new Covid-19-related", "paragraphs": [] }, { "title": "Guidelines, Apple rejected PhantomALERT’s update for its", "paragraphs": [ "para_154", "para_155", "para_156" ] }, { "title": "PhantomALERT’s app, Apple launched its own Covid-19 app", "paragraphs": [] }, { "title": "6", "paragraphs": [ "para_159" ] }, { "title": "PhantomALERT to “mak[e] the necessary changes to be in", "paragraphs": [ "para_161", "para_162" ] }, { "title": "According to PhantomALERT, hundreds of similar apps were", "paragraphs": [ "para_164" ] }, { "title": "COVID-related apps that users could access on iPhones and", "paragraphs": [ "para_166" ] }, { "title": "A couple of months later, in May 2020, Apple published", "paragraphs": [ "para_168", "para_169", "para_170", "para_171", "para_172", "para_173", "para_174", "para_175", "para_176", "para_177", "para_178", "para_179", "para_180" ] }, { "title": "PhantomALERT sued Apple on March 26, 2024, and", "paragraphs": [] }, { "title": "Apple moved to dismiss the complaint for failure to state a", "paragraphs": [ "para_183", "para_184" ] }, { "title": "(J.A. 3). On July 11, 2024—a few minutes past the July 10", "paragraphs": [ "para_186", "para_187", "para_188", "para_189" ] }, { "title": "7", "paragraphs": [] }, { "title": "Plaintiff’s proffered amended complaint alleges that", "paragraphs": [] }, { "title": "Apple’s longstanding policy of preventing its customers from", "paragraphs": [ "para_193", "para_194", "para_195", "para_196" ] }, { "title": "3-7 & ¶¶ 12, 17 (J.A. 64-68, 70, 73). The amended complaint", "paragraphs": [ "para_198" ] }, { "title": "Store, in violation of Sherman Act Section 1 (Count I);", "paragraphs": [ "para_200" ] }, { "title": "Sherman Act Section 2 (Count II); monopolization of “access", "paragraphs": [ "para_202" ] }, { "title": "United States,” in violation of Sherman Act Section 2 (Count", "paragraphs": [] }, { "title": "III); violation of the California Cartwright Act, a state antitrust", "paragraphs": [ "para_205", "para_206" ] }, { "title": "After PhantomALERT submitted its amended complaint", "paragraphs": [ "para_208", "para_209", "para_210", "para_211", "para_212", "para_213", "para_214", "para_215" ] }, { "title": "Dismiss (J.A. 99-114). PhantomALERT responded with", "paragraphs": [ "para_217", "para_218", "para_219", "para_220", "para_221" ] }, { "title": "Order of July 26, 2024 (J.A. 4). PhantomALERT then sought", "paragraphs": [ "para_223", "para_224" ] }, { "title": "8", "paragraphs": [ "para_226", "para_227", "para_228", "para_229" ] }, { "title": "After that flurry of filings, the district court entered the", "paragraphs": [ "para_231", "para_232" ] }, { "title": "Civil Rule 7(b), and denied plaintiff leave to late-file an", "paragraphs": [ "para_234" ] }, { "title": "(J.A. 230). In support of its futility determination, the court", "paragraphs": [ "para_236", "para_237", "para_238", "para_239" ] }, { "title": "233-43). The court also concluded that plaintiff failed to plead", "paragraphs": [ "para_241", "para_242", "para_243" ] }, { "title": "The de novo standard of review applies whether we are", "paragraphs": [ "para_245", "para_246", "para_247" ] }, { "title": "F.4th 756, 763 (D.C. Cir. 2022); Ramos v. Garland, 77 F.4th", "paragraphs": [] }, { "title": "932, 940 (D.C. Cir. 2023). We first confirm the basis of our", "paragraphs": [ "para_250", "para_251" ] }, { "title": "100 F.4th 236, 245 (D.C. Cir. 2024). We then evaluate whether", "paragraphs": [ "para_253", "para_254" ] }, { "title": "PhantomALERT invokes our appellate jurisdiction under", "paragraphs": [] }, { "title": "28 U.S.C. § 1291, which extends only to “final decisions” of", "paragraphs": [] }, { "title": "9", "paragraphs": [] }, { "title": "U.S. district courts. For purposes of Section 1291, a “decision", "paragraphs": [ "para_259", "para_260" ] }, { "title": "Cunningham v. Hamilton County, 527 U.S. 198, 204 (1999)", "paragraphs": [ "para_262", "para_263", "para_264", "para_265", "para_266" ] }, { "title": "(D.C. Cir. 2020) (quotation marks omitted), and here, the order", "paragraphs": [ "para_268", "para_269", "para_270" ] }, { "title": "The district court denominated its order “final” and", "paragraphs": [ "para_272", "para_273", "para_274", "para_275" ] }, { "title": "2004). The text and context are to the same effect. The district", "paragraphs": [ "para_277", "para_278", "para_279", "para_280" ] }, { "title": "12(b)(6). See Hall & Assocs. v. EPA, 956 F.3d 621, 629-30", "paragraphs": [] }, { "title": "(D.C. Cir. 2020). Reading the order’s text and accounting for", "paragraphs": [ "para_283", "para_284", "para_285", "para_286", "para_287" ] }, { "title": "10", "paragraphs": [ "para_289" ] }, { "title": "The issue before us de novo is whether the amended", "paragraphs": [ "para_291" ] }, { "title": "Br. 2. We conclude that it does not. PhantomALERT must", "paragraphs": [ "para_293", "para_294" ] }, { "title": "As for its tying claim, PhantomALERT never mentions the", "paragraphs": [ "para_296", "para_297" ] }, { "title": "Regardless, “any inquiry into the validity of a tying", "paragraphs": [ "para_299", "para_300", "para_301", "para_302", "para_303", "para_304" ] }, { "title": "F.3d at 85; Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124", "paragraphs": [] }, { "title": "F.3d 430, 443 (3d Cir. 1997), or (under the rule of reason) that", "paragraphs": [ "para_307", "para_308", "para_309", "para_310" ] }, { "title": "So, too, a monopoly claim ordinarily depends on", "paragraphs": [ "para_312", "para_313", "para_314", "para_315", "para_316", "para_317", "para_318", "para_319" ] }, { "title": "F.3d 297, 307 n.3 (3d Cir. 2007) (collecting cases). But such", "paragraphs": [] }, { "title": "11", "paragraphs": [ "para_322", "para_323", "para_324", "para_325", "para_326", "para_327" ] }, { "title": "(“[C]ourts usually cannot properly apply the rule of reason", "paragraphs": [ "para_329", "para_330", "para_331", "para_332", "para_333", "para_334" ] }, { "title": "For any antitrust claim, a relevant market consists of “all", "paragraphs": [ "para_336", "para_337", "para_338" ] }, { "title": "Amex, 585 U.S. at 543 (quotation marks omitted), and it", "paragraphs": [ "para_340", "para_341" ] }, { "title": "Bancorporation, Inc., 418 U.S. 602, 618 (1974). We focus", "paragraphs": [ "para_343", "para_344", "para_345" ] }, { "title": "To define a relevant product market, antitrust plaintiffs", "paragraphs": [ "para_347", "para_348", "para_349", "para_350" ] }, { "title": "1986). If products are not realistic substitutes, then they do not", "paragraphs": [ "para_352", "para_353", "para_354" ] }, { "title": "12", "paragraphs": [ "para_356", "para_357" ] }, { "title": "One prominent approach to detecting whether the", "paragraphs": [ "para_359", "para_360", "para_361", "para_362", "para_363", "para_364" ] }, { "title": "1028, 1038 (D.C. Cir. 2008). If so, the market is properly", "paragraphs": [ "para_366", "para_367", "para_368", "para_369", "para_370" ] }, { "title": "Plaintiffs’ proposed market definitions may also rely on", "paragraphs": [ "para_372", "para_373" ] }, { "title": "(1962). That case also “introduced into [antitrust] law the", "paragraphs": [ "para_375" ] }, { "title": "Storage, 792 F.2d at 218, “which, in themselves, constitute", "paragraphs": [ "para_377" ] }, { "title": "U.S. at 325. To determine the contours of a market, courts may", "paragraphs": [ "para_379", "para_380", "para_381", "para_382", "para_383", "para_384", "para_385", "para_386", "para_387" ] }, { "title": "13", "paragraphs": [ "para_389" ] }, { "title": "213-14 (D.C. Cir. 1969), and so is ordinarily a “deeply fact-", "paragraphs": [ "para_391", "para_392" ] }, { "title": "199-200 (2d Cir. 2001) (Sotomayor, J.). Whatever approach it", "paragraphs": [ "para_394", "para_395", "para_396", "para_397", "para_398", "para_399", "para_400", "para_401", "para_402", "para_403" ] }, { "title": "PhantomALERT postulates the existence of three product", "paragraphs": [ "para_405", "para_406", "para_407", "para_408", "para_409", "para_410" ] }, { "title": "(J.A. 71-72, 90-91, 93); see Appellant Br. 31. Plaintiff’s", "paragraphs": [ "para_412" ] }, { "title": "PhantomALERT’s central claims are that Apple has", "paragraphs": [ "para_414" ] }, { "title": "I) and, via the App Store, has maintained a monopoly in the", "paragraphs": [ "para_416", "para_417", "para_418" ] }, { "title": "PhantomALERT must allege a relevant product market of", "paragraphs": [ "para_420", "para_421" ] }, { "title": "14", "paragraphs": [ "para_423", "para_424", "para_425", "para_426", "para_427" ] }, { "title": "As just discussed, PhantomALERT alleges that Apple has", "paragraphs": [ "para_429", "para_430", "para_431", "para_432" ] }, { "title": "91, 93). According to PhantomALERT, Apple bundles the", "paragraphs": [] }, { "title": "App Store with the iPhone and then “forces iPhone users to", "paragraphs": [ "para_435", "para_436", "para_437", "para_438", "para_439", "para_440" ] }, { "title": "Id. at 6-7 (J.A. 67-68). The amended complaint thus alleges", "paragraphs": [ "para_442", "para_443", "para_444", "para_445" ] }, { "title": "Inc., 504 U.S. 451, 482 (1992). That occurs most often in", "paragraphs": [ "para_447", "para_448", "para_449" ] }, { "title": "(9th Cir. 2023). In Eastman Kodak, for example, the demand", "paragraphs": [ "para_451", "para_452", "para_453" ] }, { "title": "15", "paragraphs": [] }, { "title": "Our circuit has never articulated the circumstances under", "paragraphs": [ "para_456", "para_457", "para_458" ] }, { "title": "The first would find a single-brand aftermarket when", "paragraphs": [ "para_460", "para_461", "para_462" ] }, { "title": "451). Under this theory, if customers are “generally unaware”", "paragraphs": [ "para_464", "para_465", "para_466", "para_467", "para_468", "para_469", "para_470", "para_471", "para_472" ] }, { "title": "To identify a market under that “lock-in” theory, plaintiff", "paragraphs": [ "para_474" ] }, { "title": "Circuit held that a plaintiff seeking to identify a single-brand", "paragraphs": [ "para_476", "para_477", "para_478", "para_479", "para_480", "para_481", "para_482", "para_483", "para_484", "para_485" ] }, { "title": "16", "paragraphs": [] }, { "title": "The amended complaint does not clear that hurdle. It is", "paragraphs": [ "para_488", "para_489", "para_490", "para_491", "para_492", "para_493", "para_494", "para_495", "para_496" ] }, { "title": "24-4055 (D.N.J. June 11, 2024), ECF No. 51 (Am. Compl.)", "paragraphs": [ "para_498", "para_499", "para_500", "para_501", "para_502" ] }, { "title": "Indeed, one potential substitute comes immediately to mind:", "paragraphs": [ "para_504", "para_505" ] }, { "title": "2022) (making this point). Perhaps websites are not a", "paragraphs": [ "para_507", "para_508", "para_509" ] }, { "title": "Resisting this conclusion, PhantomALERT asserts that", "paragraphs": [ "para_511", "para_512" ] }, { "title": "Appellant Br. 37-38; Reply Br. 17-23. But those allegations", "paragraphs": [ "para_514", "para_515", "para_516", "para_517", "para_518", "para_519" ] }, { "title": "17", "paragraphs": [] }, { "title": "Coronavirus Reporter v. Apple, Inc., 85 F.4th 948, 956 (9th", "paragraphs": [ "para_522", "para_523" ] }, { "title": "Plaintiff and its amicus assert that significant market power in", "paragraphs": [ "para_525", "para_526", "para_527", "para_528", "para_529" ] }, { "title": "3d 822 (N.D. Cal. 2024)); Posner Amicus Br. 6-9. But plaintiff", "paragraphs": [ "para_531", "para_532", "para_533", "para_534" ] }, { "title": "Appellee Br. 40 (arguing that PhantomALERT waived the", "paragraphs": [ "para_536", "para_537", "para_538", "para_539" ] }, { "title": "See Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905", "paragraphs": [ "para_541" ] }, { "title": "In sum, the amended complaint does not satisfy a threshold", "paragraphs": [ "para_543", "para_544", "para_545", "para_546" ] }, { "title": "PhantomALERT has failed to plausibly allege a single-brand", "paragraphs": [ "para_548", "para_549", "para_550" ] }, { "title": "Plaintiff also alleges that Apple monopolized a", "paragraphs": [ "para_552" ] }, { "title": "18", "paragraphs": [] }, { "title": "19-related tracing apps in the App Store for use in the United", "paragraphs": [] }, { "title": "States.” Am. Compl. ¶ 87 (J.A. 93). But here, too, the", "paragraphs": [ "para_556", "para_557" ] }, { "title": "The first and most basic problem is that PhantomALERT’s", "paragraphs": [ "para_559", "para_560" ] }, { "title": "Covid-19-related apps. Id. On its own terms, that allegation", "paragraphs": [ "para_562", "para_563", "para_564", "para_565", "para_566" ] }, { "title": "Appellee Br. 44. But PhantomALERT pervasively confuses a", "paragraphs": [ "para_568", "para_569", "para_570", "para_571" ] }, { "title": "93) (“[Covid-19-related apps] are not substitutable for other", "paragraphs": [ "para_573", "para_574" ] }, { "title": "48 (“PhantomALERT properly alleges that the market for", "paragraphs": [] }, { "title": "COVID-tracing apps on the iPhone is a relevant antitrust", "paragraphs": [ "para_577", "para_578" ] }, { "title": "Rec. 14:53-59 (referring to the “Covid tracing app market” as", "paragraphs": [ "para_580" ] }, { "title": "The two markets are not the same. Just as the App Store", "paragraphs": [ "para_582", "para_583", "para_584", "para_585", "para_586" ] }, { "title": "19", "paragraphs": [ "para_588", "para_589", "para_590" ] }, { "title": "The amended complaint provides no allegations showing", "paragraphs": [ "para_592", "para_593", "para_594" ] }, { "title": "But that is the framing plaintiff presses in the amended", "paragraphs": [ "para_596", "para_597", "para_598", "para_599", "para_600", "para_601" ] }, { "title": "Am. Compl. ¶ 87 (J.A. 93), as a submarket must be “a smaller", "paragraphs": [ "para_603", "para_604" ] }, { "title": "2021), and plaintiff pleads both a market for means to use apps", "paragraphs": [ "para_606", "para_607", "para_608", "para_609", "para_610", "para_611", "para_612", "para_613" ] }, { "title": "93). Such a bare, unadorned assertion is little more than a", "paragraphs": [ "para_615", "para_616" ] }, { "title": "PhantomALERT had not plausibly alleged a “submarket”", "paragraphs": [ "para_618", "para_619", "para_620" ] }, { "title": "20", "paragraphs": [ "para_622" ] }, { "title": "The amended complaint does not plausibly allege the", "paragraphs": [ "para_624", "para_625", "para_626", "para_627", "para_628" ] }, { "title": "232) (first citing Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236", "paragraphs": [ "para_630" ] }, { "title": "Pingel Enter., Inc., 310 F.3d 1360, 1369 (Fed. Cir. 2002)), so", "paragraphs": [ "para_632", "para_633", "para_634", "para_635", "para_636", "para_637", "para_638" ] }, { "title": "One final wrinkle bears ironing out. PhantomALERT", "paragraphs": [ "para_640", "para_641" ] }, { "title": "Arg. Rec. 0:35-1:12, 24:19-27:45 (citing Moyar v. U.S. Dep’t", "paragraphs": [ "para_643", "para_644", "para_645", "para_646", "para_647", "para_648", "para_649" ] }, { "title": "2795958, at *4 (quoting Belizan v. Hershon, 434 F.3d 579, 583", "paragraphs": [] }, { "title": "(D.C. Cir. 2006)), but only that plaintiff’s proffered amended", "paragraphs": [ "para_652" ] }, { "title": "Measured by this circuit’s “high” bar for dismissing an action", "paragraphs": [] }, { "title": "21", "paragraphs": [ "para_655", "para_656", "para_657" ] }, { "title": "PhantomALERT remains free to file a separate action in the", "paragraphs": [ "para_659" ] }, { "title": "384, 396 (1990) (dismissal without prejudice does not have res", "paragraphs": [ "para_661", "para_662" ] }, { "title": "For the foregoing reasons, we affirm the judgment of the", "paragraphs": [ "para_664", "para_665" ] } ], "paragraphs": [ { "text": "United States Court of Appeals", "paragraph_id": "para_1" }, { "text": "FOR THE DISTRICT OF COLUMBIA CIRCUIT", "paragraph_id": "para_2" }, { "text": "Argued December 11, 2025 Decided July 24, 2026", "paragraph_id": "para_3" }, { "text": "No. 25-7017", "paragraph_id": "para_4" }, { "text": "PHANTOMALERT INC.,", "paragraph_id": "para_5" }, { "text": "APPELLANT", "paragraph_id": "para_6" }, { "text": "v.", "paragraph_id": "para_7" }, { "text": "APPLE INC.,", "paragraph_id": "para_8" }, { "text": "APPELLEE", "paragraph_id": "para_9" }, { "text": "Appeal from the United States District Court", "paragraph_id": "para_10" }, { "text": "for the District of Columbia", "paragraph_id": "para_11" }, { "text": "(No. 1:24-cv-00786)", "paragraph_id": "para_12" }, { "text": "Matthew I. Summers argued the cause for appellant. With", "paragraph_id": "para_13" }, { "text": "him on the briefs was Thomas C. Willcox.", "paragraph_id": "para_14" }, { "text": "Deborah Elman and Bruce E. Gerstein were on the brief", "paragraph_id": "para_15" }, { "text": "for amici curiae Professor Eric A. Posner and the American", "paragraph_id": "para_16" }, { "text": "Antitrust Institute in support of appellant.", "paragraph_id": "para_17" }, { "text": "Julian Kleinbrodt argued the cause for appellee. With him", "paragraph_id": "para_18" }, { "text": "on the brief was Cynthia Richman.", "paragraph_id": "para_19" }, { "text": "Before: PILLARD, WALKER and GARCIA, Circuit Judges.", "paragraph_id": "para_20" }, { "text": "Opinion for the Court filed by Circuit Judge PILLARD.", "paragraph_id": "para_21" }, { "text": "2", "paragraph_id": "para_22" }, { "text": "PILLARD, Circuit Judge: When the Covid-19 pandemic", "paragraph_id": "para_23" }, { "text": "struck in March 2020, PhantomALERT retrofitted its mobile", "paragraph_id": "para_24" }, { "text": "traffic app to enable users to spot, report, and avoid viral", "paragraph_id": "para_25" }, { "text": "outbreaks. But Apple barred that update from the App Store,", "paragraph_id": "para_26" }, { "text": "explaining that PhantomALERT’s revamped app failed to meet", "paragraph_id": "para_27" }, { "text": "new guidelines Apple had put in place to ensure the reliability", "paragraph_id": "para_28" }, { "text": "of Covid-19-related information. PhantomALERT sued Apple", "paragraph_id": "para_29" }, { "text": "in federal district court here, claiming that the tech company", "paragraph_id": "para_30" }, { "text": "violated the Sherman Antitrust Act and California antitrust and", "paragraph_id": "para_31" }, { "text": "unfair-competition law by tying the sale of Apple devices to", "paragraph_id": "para_32" }, { "text": "use of the App Store and by monopolizing a market consisting", "paragraph_id": "para_33" }, { "text": "of means to access apps on the iPhone in the United States.", "paragraph_id": "para_34" }, { "text": "When plaintiff did not submit a brief in opposition to Apple’s", "paragraph_id": "para_35" }, { "text": "motion to dismiss—instead responding only by attempting to", "paragraph_id": "para_36" }, { "text": "file an amended complaint—the district court dismissed", "paragraph_id": "para_37" }, { "text": "PhantomALERT’s original complaint without prejudice and", "paragraph_id": "para_38" }, { "text": "denied leave to late-file the proffered amended complaint as", "paragraph_id": "para_39" }, { "text": "futile for failure to plead a relevant antitrust market. This", "paragraph_id": "para_40" }, { "text": "appeal followed.", "paragraph_id": "para_41" }, { "text": "We conclude that the district court’s dismissal order was", "paragraph_id": "para_42" }, { "text": "final and appealable, and we affirm. The amended complaint", "paragraph_id": "para_43" }, { "text": "fails to state a claim under the Sherman Act because it does not", "paragraph_id": "para_44" }, { "text": "plausibly allege a relevant product market, and", "paragraph_id": "para_45" }, { "text": "PhantomALERT does not dispute that its remaining state-law", "paragraph_id": "para_46" }, { "text": "claims must follow the federal claims out the door.", "paragraph_id": "para_47" }, { "text": "I.", "paragraph_id": "para_48" }, { "text": "A.", "paragraph_id": "para_49" }, { "text": "The Sherman Antitrust Act of 1890 makes a “basic", "paragraph_id": "para_50" }, { "text": "distinction between concerted and independent action,”", "paragraph_id": "para_51" }, { "text": "Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 767", "paragraph_id": "para_52" }, { "text": "(1984) (citation omitted), embodied in its two primary", "paragraph_id": "para_53" }, { "text": "provisions.", "paragraph_id": "para_54" }, { "text": "3", "paragraph_id": "para_55" }, { "text": "Section 1, regarding concerted action (such as by", "paragraph_id": "para_56" }, { "text": "contract), “declare[s] . . . illegal” “[e]very contract . . . in", "paragraph_id": "para_57" }, { "text": "restraint of trade.” 15 U.S.C. § 1. Tying arrangements—in", "paragraph_id": "para_58" }, { "text": "which a seller of a “tying” good requires buyers to purchase a", "paragraph_id": "para_59" }, { "text": "separate, “tied” good—violate Section 1 of the Sherman Act", "paragraph_id": "para_60" }, { "text": "“as contracts in restraint of trade” when they suppress", "paragraph_id": "para_61" }, { "text": "competition in the market for the tied good. Ill. Tool Works", "paragraph_id": "para_62" }, { "text": "Inc. v. Indep. Ink, Inc., 547 U.S. 28, 34 (2006). To show that a", "paragraph_id": "para_63" }, { "text": "tying arrangement is illegal per se, a plaintiff must establish,", "paragraph_id": "para_64" }, { "text": "among other things, that the tying and tied goods are two", "paragraph_id": "para_65" }, { "text": "separate products, the defendant “has market power in the tying", "paragraph_id": "para_66" }, { "text": "product market,” and the “tying arrangement forecloses a", "paragraph_id": "para_67" }, { "text": "substantial volume of commerce.” United States v. Microsoft,", "paragraph_id": "para_68" }, { "text": "253 F.3d 34, 85 (D.C. Cir. 2001) (en banc) (per curiam).", "paragraph_id": "para_69" }, { "text": "Absent that showing of per se illegality, a plaintiff may", "paragraph_id": "para_70" }, { "text": "rely on the “rule of reason” framework, which is the", "paragraph_id": "para_71" }, { "text": "“prevailing standard of analysis” for Section 1 cases generally.", "paragraph_id": "para_72" }, { "text": "Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49", "paragraph_id": "para_73" }, { "text": "(1977). At its core, the purpose of the rule of reason is to", "paragraph_id": "para_74" }, { "text": "determine “whether the challenged [action] is one that", "paragraph_id": "para_75" }, { "text": "promotes competition or one that suppresses competition.”", "paragraph_id": "para_76" }, { "text": "Nat’l Soc’y of Pro. Engr’s v. United States, 435 U.S. 679, 691", "paragraph_id": "para_77" }, { "text": "(1978). Under the rule of reason’s “burden-shifting", "paragraph_id": "para_78" }, { "text": "framework,” a plaintiff must first show that the challenged tie", "paragraph_id": "para_79" }, { "text": "causes substantial anticompetitive effects in the market for the", "paragraph_id": "para_80" }, { "text": "tied good. Ohio v. Am. Express Co. (Amex), 585 U.S. 529, 541", "paragraph_id": "para_81" }, { "text": "(2018); see Microsoft, 253 F.3d at 95. If the plaintiff meets that", "paragraph_id": "para_82" }, { "text": "burden, the defendant can avoid liability by showing that there", "paragraph_id": "para_83" }, { "text": "is nonetheless a procompetitive rationale for the tie, see Amex,", "paragraph_id": "para_84" }, { "text": "585 U.S. at 541; Microsoft, 253 F.3d at 95, for instance, that", "paragraph_id": "para_85" }, { "text": "buyers find packaged sales in the market “attractive,” Jefferson", "paragraph_id": "para_86" }, { "text": "Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984)", "paragraph_id": "para_87" }, { "text": "(allowing hospital’s tying of anesthesiology services with", "paragraph_id": "para_88" }, { "text": "surgeries). Once that is shown, the burden then shifts back to", "paragraph_id": "para_89" }, { "text": "4", "paragraph_id": "para_90" }, { "text": "the plaintiff to “demonstrate that the procompetitive", "paragraph_id": "para_91" }, { "text": "efficiencies could be reasonably achieved through less", "paragraph_id": "para_92" }, { "text": "anticompetitive means.” Amex, 585 U.S. at 541-42; Microsoft,", "paragraph_id": "para_93" }, { "text": "253 F.3d at 95.", "paragraph_id": "para_94" }, { "text": "Section 2 of the Sherman Act makes it unlawful for a firm", "paragraph_id": "para_95" }, { "text": "to “monopolize.” 15 U.S.C. § 2. That ban, which extends to", "paragraph_id": "para_96" }, { "text": "“unilateral activity,” Copperweld, 467 U.S. at 768, has “two", "paragraph_id": "para_97" }, { "text": "elements: ‘(1) the possession of monopoly power in the", "paragraph_id": "para_98" }, { "text": "relevant market and (2) the willful acquisition or maintenance", "paragraph_id": "para_99" }, { "text": "of that power as distinguished from growth or development as", "paragraph_id": "para_100" }, { "text": "a consequence of a superior product, business acumen, or", "paragraph_id": "para_101" }, { "text": "historic accident.’” Microsoft, 253 F.3d at 50 (quoting United", "paragraph_id": "para_102" }, { "text": "States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)). Thus,", "paragraph_id": "para_103" }, { "text": "“having a monopoly does not by itself violate” Section 2. Id.", "paragraph_id": "para_104" }, { "text": "at 58. A firm whose product or service dominates a market", "paragraph_id": "para_105" }, { "text": "because it offers better value than any potential substitute", "paragraph_id": "para_106" }, { "text": "product or service does not monopolize unlawfully; to be", "paragraph_id": "para_107" }, { "text": "viable, a plaintiff’s Section 2 claim must further allege that the", "paragraph_id": "para_108" }, { "text": "monopolist has engaged in anticompetitive conduct.", "paragraph_id": "para_109" }, { "text": "Anticompetitive conduct under the Sherman Act means", "paragraph_id": "para_110" }, { "text": "protection of a monopoly position “through a means other than", "paragraph_id": "para_111" }, { "text": "competition on the merits.” Id. at 62; see id. at 65. As it is for", "paragraph_id": "para_112" }, { "text": "most Section 1 claims, anticompetitive conduct supportive of", "paragraph_id": "para_113" }, { "text": "Section 2 claims is evaluated under the rule of reason’s burden", "paragraph_id": "para_114" }, { "text": "shifting analysis. See id. at 59.", "paragraph_id": "para_115" }, { "text": "B.", "paragraph_id": "para_116" }, { "text": "In its memorandum opinion, the district court reviewed the", "paragraph_id": "para_117" }, { "text": "amended complaint and concluded that it failed to state a claim", "paragraph_id": "para_118" }, { "text": "for relief. Our factual recitation accordingly draws from the", "paragraph_id": "para_119" }, { "text": "facts as the amended complaint alleges them, with reasonable", "paragraph_id": "para_120" }, { "text": "inferences drawn in plaintiff’s favor. See Bell Atl. Corp. v.", "paragraph_id": "para_121" }, { "text": "Twombly, 550 U.S. 544, 554-56 (2007).", "paragraph_id": "para_122" }, { "text": "5", "paragraph_id": "para_123" }, { "text": "Since 2010, PhantomALERT has provided a traffic app", "paragraph_id": "para_124" }, { "text": "that crowdsources real-time traffic data, similar to the more", "paragraph_id": "para_125" }, { "text": "widely known Waze, and has made its app available via", "paragraph_id": "para_126" }, { "text": "monthly, annual, and lifetime paid subscription options.", "paragraph_id": "para_127" }, { "text": "During that time, PhantomALERT’s traffic app “experienced a", "paragraph_id": "para_128" }, { "text": "healthy demand on the App Store for displaying live traffic", "paragraph_id": "para_129" }, { "text": "safety information, road hazards, natural disaster alerts and", "paragraph_id": "para_130" }, { "text": "other information to help drivers drive alert, safely and thus", "paragraph_id": "para_131" }, { "text": "ticket free.” Am. Compl. ¶ 18 (J.A. 73). In the wake of the", "paragraph_id": "para_132" }, { "text": "March 2020 outbreak of Covid-19 in the United States,", "paragraph_id": "para_133" }, { "text": "PhantomALERT “revamped” that app to include Covid-19", "paragraph_id": "para_134" }, { "text": "“hotspot map data and reporting,” and had plans to add", "paragraph_id": "para_135" }, { "text": "“symptom, test result and vaccination reporting, tracking,", "paragraph_id": "para_136" }, { "text": "tracing and mapping features.” Id. ¶ 21 (J.A. 74). On March", "paragraph_id": "para_137" }, { "text": "14, 2020, however, Apple “announced changes to the App", "paragraph_id": "para_138" }, { "text": "Store Review Guidelines,” limiting the App Store’s", "paragraph_id": "para_139" }, { "text": "distribution of apps “related to COVID-19” to “recognized", "paragraph_id": "para_140" }, { "text": "entities such as government organizations, health-focused", "paragraph_id": "para_141" }, { "text": "NGOs, companies deeply credentialed in health issues, and", "paragraph_id": "para_142" }, { "text": "medical or educational institutions.” Id. ¶ 27 (J.A. 77).", "paragraph_id": "para_143" }, { "text": "Apple’s new Guidelines also required apps in", "paragraph_id": "para_144" }, { "text": "“highly-regulated fields,” including healthcare, to be", "paragraph_id": "para_145" }, { "text": "“submitted by a legal entity that provides these services, and", "paragraph_id": "para_146" }, { "text": "not by an individual developer.” Id.", "paragraph_id": "para_147" }, { "text": "Apple’s Developer Program License Agreement requires", "paragraph_id": "para_148" }, { "text": "app developers to submit for Apple’s review any app they seek", "paragraph_id": "para_149" }, { "text": "to have included in the App Store to enable Apple to ensure the", "paragraph_id": "para_150" }, { "text": "new or updated app complies with Apple’s guidelines.", "paragraph_id": "para_151" }, { "text": "Pursuant to that requirement and its new Covid-19-related", "paragraph_id": "para_152" }, { "text": "Guidelines, Apple rejected PhantomALERT’s update for its", "paragraph_id": "para_153" }, { "text": "app; the Google Play Store, where plaintiff sought to publish", "paragraph_id": "para_154" }, { "text": "the Android version of its app, did likewise under its own", "paragraph_id": "para_155" }, { "text": "policy banning all COVID-related apps. Days after rejecting", "paragraph_id": "para_156" }, { "text": "PhantomALERT’s app, Apple launched its own Covid-19 app", "paragraph_id": "para_157" }, { "text": "6", "paragraph_id": "para_158" }, { "text": "in collaboration with the federal government. Apple invited", "paragraph_id": "para_159" }, { "text": "PhantomALERT to “mak[e] the necessary changes to be in", "paragraph_id": "para_160" }, { "text": "compliance with the App Store Review Guidelines", "paragraph_id": "para_161" }, { "text": "and . . . resubmit[] [its] revised [app].” Id. ¶ 33 (J.A. 78).", "paragraph_id": "para_162" }, { "text": "According to PhantomALERT, hundreds of similar apps were", "paragraph_id": "para_163" }, { "text": "rejected under Apple’s and Google’s policies limiting the", "paragraph_id": "para_164" }, { "text": "COVID-related apps that users could access on iPhones and", "paragraph_id": "para_165" }, { "text": "Androids.", "paragraph_id": "para_166" }, { "text": "A couple of months later, in May 2020, Apple published", "paragraph_id": "para_167" }, { "text": "more new rules for contact-tracing apps. The new rules", "paragraph_id": "para_168" }, { "text": "required that exposure-notification apps merely be “endorsed", "paragraph_id": "para_169" }, { "text": "or approved by a governmental entity,” not—as before—issued", "paragraph_id": "para_170" }, { "text": "by one, and prohibited those apps from including any", "paragraph_id": "para_171" }, { "text": "advertising. Id. ¶¶ 43-44 (J.A. 82). That rule change appeared", "paragraph_id": "para_172" }, { "text": "in Apple’s “Exposure Notification Addendum” to the", "paragraph_id": "para_173" }, { "text": "Developer Program License Agreement, id. ¶¶ 42-44 (J.A. 82),", "paragraph_id": "para_174" }, { "text": "but PhantomALERT alleges that it never received notice of", "paragraph_id": "para_175" }, { "text": "such a change and, had it been notified, “would have pursued”", "paragraph_id": "para_176" }, { "text": "the endorsement-or-approval option, id. ¶ 45 (J.A. 83). At least", "paragraph_id": "para_177" }, { "text": "seven contact-tracing apps in addition to Apple’s own such app", "paragraph_id": "para_178" }, { "text": "were approved for use in the United States under the new", "paragraph_id": "para_179" }, { "text": "guidelines.", "paragraph_id": "para_180" }, { "text": "PhantomALERT sued Apple on March 26, 2024, and", "paragraph_id": "para_181" }, { "text": "Apple moved to dismiss the complaint for failure to state a", "paragraph_id": "para_182" }, { "text": "claim. Plaintiff got an extension until July 10 to file its", "paragraph_id": "para_183" }, { "text": "response to Apple’s motion. Minute Order of June 20, 2024", "paragraph_id": "para_184" }, { "text": "(J.A. 3). On July 11, 2024—a few minutes past the July 10", "paragraph_id": "para_185" }, { "text": "deadline—PhantomALERT filed an amended complaint", "paragraph_id": "para_186" }, { "text": "unaccompanied by any brief in opposition to Apple’s motion", "paragraph_id": "para_187" }, { "text": "to dismiss. See Am. Compl. (J.A. 62-98); Op. 3-4 (J.A. 227-", "paragraph_id": "para_188" }, { "text": "28).", "paragraph_id": "para_189" }, { "text": "7", "paragraph_id": "para_190" }, { "text": "Plaintiff’s proffered amended complaint alleges that", "paragraph_id": "para_191" }, { "text": "Apple’s longstanding policy of preventing its customers from", "paragraph_id": "para_192" }, { "text": "accessing apps outside the App Store, coupled with its shifting", "paragraph_id": "para_193" }, { "text": "guidelines that barred PhantomALERT from offering its", "paragraph_id": "para_194" }, { "text": "revamped app on the App Store, violated federal and state", "paragraph_id": "para_195" }, { "text": "antitrust law and state unfair competition law. Am. Compl. at", "paragraph_id": "para_196" }, { "text": "3-7 & ¶¶ 12, 17 (J.A. 64-68, 70, 73). The amended complaint", "paragraph_id": "para_197" }, { "text": "contains five counts: unlawful tying of the iPhone to the App", "paragraph_id": "para_198" }, { "text": "Store, in violation of Sherman Act Section 1 (Count I);", "paragraph_id": "para_199" }, { "text": "monopolization of “access to apps on iPhones,” in violation of", "paragraph_id": "para_200" }, { "text": "Sherman Act Section 2 (Count II); monopolization of “access", "paragraph_id": "para_201" }, { "text": "to Covid-19-related tracing apps in the App Store for use in the", "paragraph_id": "para_202" }, { "text": "United States,” in violation of Sherman Act Section 2 (Count", "paragraph_id": "para_203" }, { "text": "III); violation of the California Cartwright Act, a state antitrust", "paragraph_id": "para_204" }, { "text": "law (Count IV); and violation of California’s Unfair", "paragraph_id": "para_205" }, { "text": "Competition Law (Count V). Id. ¶¶ 72-106 (J.A. 90-97).", "paragraph_id": "para_206" }, { "text": "After PhantomALERT submitted its amended complaint", "paragraph_id": "para_207" }, { "text": "as its sole response to Apple’s motion, Apple filed a reply brief", "paragraph_id": "para_208" }, { "text": "arguing that (1) its motion should be granted as uncontested", "paragraph_id": "para_209" }, { "text": "because PhantomALERT did not timely oppose it, (2) the", "paragraph_id": "para_210" }, { "text": "amended complaint “should be stricken” because it was filed", "paragraph_id": "para_211" }, { "text": "after the 21-day window to amend a complaint as of right had", "paragraph_id": "para_212" }, { "text": "closed, and (3) the amended complaint was futile in any event", "paragraph_id": "para_213" }, { "text": "because it did not cure the deficiencies Apple’s motion", "paragraph_id": "para_214" }, { "text": "identified in the original complaint. Apple Reply ISO Mot. to", "paragraph_id": "para_215" }, { "text": "Dismiss (J.A. 99-114). PhantomALERT responded with", "paragraph_id": "para_216" }, { "text": "motions for leave to amend its complaint and for the court to", "paragraph_id": "para_217" }, { "text": "deem its amended complaint timely filed. The district court", "paragraph_id": "para_218" }, { "text": "issued a minute order denying the latter motion in part because", "paragraph_id": "para_219" }, { "text": "plaintiff “did not request, and the Court did not grant, an", "paragraph_id": "para_220" }, { "text": "extension of time to file a Rule 15(a)(1) amendment.” Minute", "paragraph_id": "para_221" }, { "text": "Order of July 26, 2024 (J.A. 4). PhantomALERT then sought", "paragraph_id": "para_222" }, { "text": "leave to late-file its amended complaint, focusing exclusively", "paragraph_id": "para_223" }, { "text": "on a technical error that led to the post-midnight filing. Apple", "paragraph_id": "para_224" }, { "text": "8", "paragraph_id": "para_225" }, { "text": "opposed on the ground that amendment was still futile. In its", "paragraph_id": "para_226" }, { "text": "reply, PhantomALERT for the first time defended its claims on", "paragraph_id": "para_227" }, { "text": "their merits against Apple’s argument that neither the original", "paragraph_id": "para_228" }, { "text": "nor the amended complaint states a claim for relief.", "paragraph_id": "para_229" }, { "text": "After that flurry of filings, the district court entered the", "paragraph_id": "para_230" }, { "text": "order now on appeal. It dismissed PhantomALERT’s original", "paragraph_id": "para_231" }, { "text": "complaint without prejudice, deeming it conceded under Local", "paragraph_id": "para_232" }, { "text": "Civil Rule 7(b), and denied plaintiff leave to late-file an", "paragraph_id": "para_233" }, { "text": "amended complaint because doing so “would be futile.” Op. 6", "paragraph_id": "para_234" }, { "text": "(J.A. 230). In support of its futility determination, the court", "paragraph_id": "para_235" }, { "text": "reviewed the allegations of the proffered amended complaint", "paragraph_id": "para_236" }, { "text": "and held that its Sherman Act and Cartwright Act allegations", "paragraph_id": "para_237" }, { "text": "failed “for the same threshold reason”: they did not define the", "paragraph_id": "para_238" }, { "text": "relevant product market or geographic market. Id. at 9-19 (J.A.", "paragraph_id": "para_239" }, { "text": "233-43). The court also concluded that plaintiff failed to plead", "paragraph_id": "para_240" }, { "text": "the prerequisites for injunctive relief under California Unfair", "paragraph_id": "para_241" }, { "text": "Competition Law. Id. at 19-20 (J.A. 243-44).", "paragraph_id": "para_242" }, { "text": "II.", "paragraph_id": "para_243" }, { "text": "The de novo standard of review applies whether we are", "paragraph_id": "para_244" }, { "text": "considering an order dismissing a complaint for failure to state", "paragraph_id": "para_245" }, { "text": "a claim or one denying a motion to amend a complaint based", "paragraph_id": "para_246" }, { "text": "on futility. See Fed. Express Corp. v. U.S. Dep’t of Com., 39", "paragraph_id": "para_247" }, { "text": "F.4th 756, 763 (D.C. Cir. 2022); Ramos v. Garland, 77 F.4th", "paragraph_id": "para_248" }, { "text": "932, 940 (D.C. Cir. 2023). We first confirm the basis of our", "paragraph_id": "para_249" }, { "text": "appellate jurisdiction, which neither party briefed but is not", "paragraph_id": "para_250" }, { "text": "subject to waiver. See El Puente v. U.S. Army Corps of Eng’rs,", "paragraph_id": "para_251" }, { "text": "100 F.4th 236, 245 (D.C. Cir. 2024). We then evaluate whether", "paragraph_id": "para_252" }, { "text": "the amended complaint states a claim for relief.", "paragraph_id": "para_253" }, { "text": "A.", "paragraph_id": "para_254" }, { "text": "PhantomALERT invokes our appellate jurisdiction under", "paragraph_id": "para_255" }, { "text": "28 U.S.C. § 1291, which extends only to “final decisions” of", "paragraph_id": "para_256" }, { "text": "9", "paragraph_id": "para_257" }, { "text": "U.S. district courts. For purposes of Section 1291, a “decision", "paragraph_id": "para_258" }, { "text": "is not final . . . unless it ends litigation on the merits and leaves", "paragraph_id": "para_259" }, { "text": "nothing for the court to do but execute the judgment.”", "paragraph_id": "para_260" }, { "text": "Cunningham v. Hamilton County, 527 U.S. 198, 204 (1999)", "paragraph_id": "para_261" }, { "text": "(quotation marks omitted).", "paragraph_id": "para_262" }, { "text": "We conclude that we have jurisdiction over this appeal.", "paragraph_id": "para_263" }, { "text": "“Finality under section 1291 turns on whether the district court", "paragraph_id": "para_264" }, { "text": "intended the judgment to represent the final decision in the", "paragraph_id": "para_265" }, { "text": "case,” N. Am. Butterfly Ass’n v. Wolf, 977 F.3d 1244, 1253", "paragraph_id": "para_266" }, { "text": "(D.C. Cir. 2020) (quotation marks omitted), and here, the order", "paragraph_id": "para_267" }, { "text": "on appeal shows that the district court intended to", "paragraph_id": "para_268" }, { "text": "“disassociate[] itself from [the] case,” Gelboim v. Bank of Am.", "paragraph_id": "para_269" }, { "text": "Corp., 574 U.S. 405, 408 (2015) (quotation marks omitted).", "paragraph_id": "para_270" }, { "text": "The district court denominated its order “final” and", "paragraph_id": "para_271" }, { "text": "“appealable” and directed the clerk to “close the case.” Order", "paragraph_id": "para_272" }, { "text": "1 (J.A. 246). That characterization, while not binding on us,", "paragraph_id": "para_273" }, { "text": "shows “that the district court thought the order had terminated", "paragraph_id": "para_274" }, { "text": "the action.” Ciralsky v. CIA, 355 F.3d 661, 667 (D.C. Cir.", "paragraph_id": "para_275" }, { "text": "2004). The text and context are to the same effect. The district", "paragraph_id": "para_276" }, { "text": "court dismissed the complaint and denied plaintiff leave to", "paragraph_id": "para_277" }, { "text": "amend because it determined that amendment would be futile,", "paragraph_id": "para_278" }, { "text": "given that the amended complaint would not withstand a", "paragraph_id": "para_279" }, { "text": "motion to dismiss under Federal Rule of Civil Procedure", "paragraph_id": "para_280" }, { "text": "12(b)(6). See Hall & Assocs. v. EPA, 956 F.3d 621, 629-30", "paragraph_id": "para_281" }, { "text": "(D.C. Cir. 2020). Reading the order’s text and accounting for", "paragraph_id": "para_282" }, { "text": "its “surrounding circumstances,” Wolf, 977 F.3d at 1253, we", "paragraph_id": "para_283" }, { "text": "conclude that it “le[ft] nothing more for the court to do,” Attias", "paragraph_id": "para_284" }, { "text": "v. Carefirst, Inc., 865 F.3d 620, 624 (D.C. Cir. 2017). It was,", "paragraph_id": "para_285" }, { "text": "as the district court said, a “final, appealable Order.” Order 1", "paragraph_id": "para_286" }, { "text": "(J.A. 246).", "paragraph_id": "para_287" }, { "text": "10", "paragraph_id": "para_288" }, { "text": "B.", "paragraph_id": "para_289" }, { "text": "The issue before us de novo is whether the amended", "paragraph_id": "para_290" }, { "text": "complaint states a claim for relief. See Appellee Br. 16; Reply", "paragraph_id": "para_291" }, { "text": "Br. 2. We conclude that it does not. PhantomALERT must", "paragraph_id": "para_292" }, { "text": "allege relevant product markets for each of its Sherman Act", "paragraph_id": "para_293" }, { "text": "claims, but the amended complaint fails to do so.", "paragraph_id": "para_294" }, { "text": "As for its tying claim, PhantomALERT never mentions the", "paragraph_id": "para_295" }, { "text": "per se theory of liability for tying, so we assume it means to", "paragraph_id": "para_296" }, { "text": "proceed under the more commonly utilized rule of reason.", "paragraph_id": "para_297" }, { "text": "Regardless, “any inquiry into the validity of a tying", "paragraph_id": "para_298" }, { "text": "arrangement must focus on the market or markets in which the", "paragraph_id": "para_299" }, { "text": "two products are sold.” Jefferson Parish, 466 U.S. at 18. That", "paragraph_id": "para_300" }, { "text": "is because an antitrust plaintiff must show either (under the per", "paragraph_id": "para_301" }, { "text": "se theory of liability) that the tying and tied goods are in distinct", "paragraph_id": "para_302" }, { "text": "markets and the tie forecloses a substantial volume of", "paragraph_id": "para_303" }, { "text": "commerce in the market for the tied good, see Microsoft, 253", "paragraph_id": "para_304" }, { "text": "F.3d at 85; Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124", "paragraph_id": "para_305" }, { "text": "F.3d 430, 443 (3d Cir. 1997), or (under the rule of reason) that", "paragraph_id": "para_306" }, { "text": "the arrangement produces substantial anticompetitive effects in", "paragraph_id": "para_307" }, { "text": "the tied-good market that are unsupported by any", "paragraph_id": "para_308" }, { "text": "procompetitive rationale defendant has put forward, see Amex,", "paragraph_id": "para_309" }, { "text": "585 U.S. at 541.", "paragraph_id": "para_310" }, { "text": "So, too, a monopoly claim ordinarily depends on", "paragraph_id": "para_311" }, { "text": "identifying the relevant market in which monopolistic conduct", "paragraph_id": "para_312" }, { "text": "occurred. Market definition “establishes a context for", "paragraph_id": "para_313" }, { "text": "evaluating the defendant’s actions”—whether it possesses", "paragraph_id": "para_314" }, { "text": "monopoly power in the relevant market. Microsoft, 253 F.3d", "paragraph_id": "para_315" }, { "text": "at 81. To be sure, where there is direct evidence that a firm can", "paragraph_id": "para_316" }, { "text": "“profitably raise prices substantially above the competitive", "paragraph_id": "para_317" }, { "text": "level” (i.e., exercise monopoly power), no market definition is", "paragraph_id": "para_318" }, { "text": "needed. Id. at 51; see Broadcom Corp. v. Qualcomm Inc., 501", "paragraph_id": "para_319" }, { "text": "F.3d 297, 307 n.3 (3d Cir. 2007) (collecting cases). But such", "paragraph_id": "para_320" }, { "text": "11", "paragraph_id": "para_321" }, { "text": "direct evidence is only “rarely available,” Microsoft, 253 F.3d", "paragraph_id": "para_322" }, { "text": "at 51, and PhantomALERT does not allege it here. More", "paragraph_id": "para_323" }, { "text": "commonly, monopoly power is inferred from “circumstantial", "paragraph_id": "para_324" }, { "text": "evidence” through a “structural approach” that looks to “a", "paragraph_id": "para_325" }, { "text": "firm’s possession of a dominant share of a relevant market that", "paragraph_id": "para_326" }, { "text": "is protected by entry barriers.” Id.; cf. Amex, 585 U.S. at 543", "paragraph_id": "para_327" }, { "text": "(“[C]ourts usually cannot properly apply the rule of reason", "paragraph_id": "para_328" }, { "text": "without an accurate definition of the relevant market.”). Only", "paragraph_id": "para_329" }, { "text": "once the plaintiff establishes that defendant has monopoly", "paragraph_id": "para_330" }, { "text": "power in a relevant antitrust market do we ask whether that", "paragraph_id": "para_331" }, { "text": "monopoly was acquired or maintained through anticompetitive", "paragraph_id": "para_332" }, { "text": "means—or, conversely, whether a procompetitive rationale", "paragraph_id": "para_333" }, { "text": "explains it. See Microsoft, 253 F.3d at 58.", "paragraph_id": "para_334" }, { "text": "For any antitrust claim, a relevant market consists of “all", "paragraph_id": "para_335" }, { "text": "products reasonably interchangeable by consumers for the", "paragraph_id": "para_336" }, { "text": "same purposes.” Id. at 52. It is, in short, the “arena within", "paragraph_id": "para_337" }, { "text": "which significant substitution in consumption . . . occurs,”", "paragraph_id": "para_338" }, { "text": "Amex, 585 U.S. at 543 (quotation marks omitted), and it", "paragraph_id": "para_339" }, { "text": "typically contains both a “geographic” component and a", "paragraph_id": "para_340" }, { "text": "“product” component, United States v. Marine", "paragraph_id": "para_341" }, { "text": "Bancorporation, Inc., 418 U.S. 602, 618 (1974). We focus", "paragraph_id": "para_342" }, { "text": "here solely on PhantomALERT’s deficient product-market", "paragraph_id": "para_343" }, { "text": "allegations “[b]ecause that is all this case requires.” Connelly", "paragraph_id": "para_344" }, { "text": "v. United States, 602 U.S. 257, 267 n.2 (2024).", "paragraph_id": "para_345" }, { "text": "To define a relevant product market, antitrust plaintiffs", "paragraph_id": "para_346" }, { "text": "may resort to tools aimed at measuring the “cross-elasticity of", "paragraph_id": "para_347" }, { "text": "demand,” defined as the “degree to which a similar product will", "paragraph_id": "para_348" }, { "text": "be substituted for the product in question.” Rothery Storage &", "paragraph_id": "para_349" }, { "text": "Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 218 (D.C. Cir.", "paragraph_id": "para_350" }, { "text": "1986). If products are not realistic substitutes, then they do not", "paragraph_id": "para_351" }, { "text": "compete in the same product market. If, conversely, consumers", "paragraph_id": "para_352" }, { "text": "would, in the absence of the conduct challenged as", "paragraph_id": "para_353" }, { "text": "monopolistic, substitute between products in response to", "paragraph_id": "para_354" }, { "text": "12", "paragraph_id": "para_355" }, { "text": "modest price increases (or economically equivalent quality", "paragraph_id": "para_356" }, { "text": "decreases), then the products compete.", "paragraph_id": "para_357" }, { "text": "One prominent approach to detecting whether the", "paragraph_id": "para_358" }, { "text": "plaintiff’s proposed market definition includes all reasonable", "paragraph_id": "para_359" }, { "text": "substitutes is known as the hypothetical monopolist test. Its", "paragraph_id": "para_360" }, { "text": "basic mechanism is to ask whether a hypothetical monopolist", "paragraph_id": "para_361" }, { "text": "controlling all suppliers in the entire proposed market could", "paragraph_id": "para_362" }, { "text": "profitably impose a “small but significant non-transitory", "paragraph_id": "para_363" }, { "text": "increase in price.” FTC. v. Whole Foods Mkt., Inc., 548 F.3d", "paragraph_id": "para_364" }, { "text": "1028, 1038 (D.C. Cir. 2008). If so, the market is properly", "paragraph_id": "para_365" }, { "text": "defined; if not, the market definition must be adjusted to", "paragraph_id": "para_366" }, { "text": "encompass any substitutes available to consumers that could", "paragraph_id": "para_367" }, { "text": "limit or negate the profitability of a price increase by the", "paragraph_id": "para_368" }, { "text": "monopolist. See Husky Mktg. & Supply Co. v. FERC, 105 F.4th", "paragraph_id": "para_369" }, { "text": "418, 421 n.* (D.C. Cir. 2024).", "paragraph_id": "para_370" }, { "text": "Plaintiffs’ proposed market definitions may also rely on", "paragraph_id": "para_371" }, { "text": "various “practical indicia” of a relevant product market, first", "paragraph_id": "para_372" }, { "text": "outlined in Brown Shoe Co. v. United States, 370 U.S. 294", "paragraph_id": "para_373" }, { "text": "(1962). That case also “introduced into [antitrust] law the", "paragraph_id": "para_374" }, { "text": "concept of submarkets within the relevant market,” Rothery", "paragraph_id": "para_375" }, { "text": "Storage, 792 F.2d at 218, “which, in themselves, constitute", "paragraph_id": "para_376" }, { "text": "product markets for antitrust purposes,” Brown Shoe Co., 370", "paragraph_id": "para_377" }, { "text": "U.S. at 325. To determine the contours of a market, courts may", "paragraph_id": "para_378" }, { "text": "consider “industry or public recognition of the submarket as a", "paragraph_id": "para_379" }, { "text": "separate economic entity, the product’s peculiar characteristics", "paragraph_id": "para_380" }, { "text": "and uses, unique production facilities, distinct customers,", "paragraph_id": "para_381" }, { "text": "distinct prices, sensitivity to price changes, and specialized", "paragraph_id": "para_382" }, { "text": "vendors.” Id. at 325. Our circuit has described the Brown Shoe", "paragraph_id": "para_383" }, { "text": "factors as “evidentiary proxies for direct proof of", "paragraph_id": "para_384" }, { "text": "substitutability.” Rothery Storage, 792 F.2d at 218.", "paragraph_id": "para_385" }, { "text": "“[T]he process of defining a product market often involves", "paragraph_id": "para_386" }, { "text": "inquiry into economic realities and industry practice,” Nat’l", "paragraph_id": "para_387" }, { "text": "13", "paragraph_id": "para_388" }, { "text": "Aviation Trades Ass’n v. Civ. Aeronautics Bd., 420 F.2d 209,", "paragraph_id": "para_389" }, { "text": "213-14 (D.C. Cir. 1969), and so is ordinarily a “deeply fact-", "paragraph_id": "para_390" }, { "text": "intensive inquiry” unsuited to resolution before any", "paragraph_id": "para_391" }, { "text": "opportunity for discovery, Todd v. Exxon Corp., 275 F.3d 191,", "paragraph_id": "para_392" }, { "text": "199-200 (2d Cir. 2001) (Sotomayor, J.). Whatever approach it", "paragraph_id": "para_393" }, { "text": "uses to define the market, an antitrust plaintiff must plausibly", "paragraph_id": "para_394" }, { "text": "allege a product market that bears “a rational relation to the", "paragraph_id": "para_395" }, { "text": "methodology courts prescribe to define a market for antitrust", "paragraph_id": "para_396" }, { "text": "purposes—analysis of the interchangeability of use or the", "paragraph_id": "para_397" }, { "text": "cross-elasticity of demand.” Id. at 200 (citation omitted). Such", "paragraph_id": "para_398" }, { "text": "allegations need not be “detailed,” but they must consist of", "paragraph_id": "para_399" }, { "text": "“more than labels and conclusions” or a “formulaic recitation", "paragraph_id": "para_400" }, { "text": "of the elements of a cause of action.” Twombly, 550 U.S. at", "paragraph_id": "para_401" }, { "text": "555.", "paragraph_id": "para_402" }, { "text": "Scattered through its amended complaint,", "paragraph_id": "para_403" }, { "text": "PhantomALERT postulates the existence of three product", "paragraph_id": "para_404" }, { "text": "markets, one “foremarket” and two related “aftermarkets”: (1)", "paragraph_id": "para_405" }, { "text": "a U.S. smartphone market; (2) a market for “access to apps on", "paragraph_id": "para_406" }, { "text": "the iPhone” in which Apple, via the App Store, has a monopoly", "paragraph_id": "para_407" }, { "text": "within the United States; and (3) within that initial aftermarket,", "paragraph_id": "para_408" }, { "text": "a “submarket of access to Covid-19-related tracing apps . . . for", "paragraph_id": "para_409" }, { "text": "use in the United States.” Am. Compl. ¶¶ 15-16, 73, 84, 87", "paragraph_id": "para_410" }, { "text": "(J.A. 71-72, 90-91, 93); see Appellant Br. 31. Plaintiff’s", "paragraph_id": "para_411" }, { "text": "antitrust claims focus on the latter two.", "paragraph_id": "para_412" }, { "text": "PhantomALERT’s central claims are that Apple has", "paragraph_id": "para_413" }, { "text": "unlawfully tied the App Store to the sale of the iPhone (Count", "paragraph_id": "para_414" }, { "text": "I) and, via the App Store, has maintained a monopoly in the", "paragraph_id": "para_415" }, { "text": "“access to apps on the iPhone” and “access to Covid-19-related", "paragraph_id": "para_416" }, { "text": "tracing apps” markets (Counts II & III). Am. Compl. ¶¶ 72-90", "paragraph_id": "para_417" }, { "text": "(J.A. 90-94). To prevail on Counts I and II, therefore,", "paragraph_id": "para_418" }, { "text": "PhantomALERT must allege a relevant product market of", "paragraph_id": "para_419" }, { "text": "“access to apps on the iPhone,” and to prevail on Count III, it", "paragraph_id": "para_420" }, { "text": "must allege a relevant product market of “access to Covid-19-", "paragraph_id": "para_421" }, { "text": "14", "paragraph_id": "para_422" }, { "text": "related tracing apps.” We thus focus on whether plaintiff has", "paragraph_id": "para_423" }, { "text": "adequately alleged any such product markets; we assume", "paragraph_id": "para_424" }, { "text": "without deciding that it has alleged a relevant smartphone", "paragraph_id": "para_425" }, { "text": "market.", "paragraph_id": "para_426" }, { "text": "1.", "paragraph_id": "para_427" }, { "text": "As just discussed, PhantomALERT alleges that Apple has", "paragraph_id": "para_428" }, { "text": "unlawfully tied the App Store to the sale of the iPhone while", "paragraph_id": "para_429" }, { "text": "simultaneously monopolizing the App Store market (which", "paragraph_id": "para_430" }, { "text": "plaintiff describes as the market for “access to apps on the", "paragraph_id": "para_431" }, { "text": "iPhone”) to exclude plaintiff’s app. Am. Compl. ¶¶ 74, 84 (J.A.", "paragraph_id": "para_432" }, { "text": "91, 93). According to PhantomALERT, Apple bundles the", "paragraph_id": "para_433" }, { "text": "App Store with the iPhone and then “forces iPhone users to", "paragraph_id": "para_434" }, { "text": "acquire apps exclusively through the App Store,” thus banning", "paragraph_id": "para_435" }, { "text": "the act of “sideloading” apps by downloading them from other", "paragraph_id": "para_436" }, { "text": "app marketplaces or the internet. Id. ¶¶ 74-75 (J.A. 91); see id.", "paragraph_id": "para_437" }, { "text": "¶¶ 82-84 (J.A. 92-93). As a result, plaintiff alleges, iPhone", "paragraph_id": "para_438" }, { "text": "users in the United States were unable to access", "paragraph_id": "para_439" }, { "text": "PhantomALERT’s updated app at all after Apple rejected it.", "paragraph_id": "para_440" }, { "text": "Id. at 6-7 (J.A. 67-68). The amended complaint thus alleges", "paragraph_id": "para_441" }, { "text": "that the App Store constitutes “a special type of market, known", "paragraph_id": "para_442" }, { "text": "as a single-brand aftermarket.” Appellant Br. 39.", "paragraph_id": "para_443" }, { "text": "“[I]n some instances one brand of a product can constitute", "paragraph_id": "para_444" }, { "text": "a separate market.” Eastman Kodak Co. v. Image Tech. Servs.,", "paragraph_id": "para_445" }, { "text": "Inc., 504 U.S. 451, 482 (1992). That occurs most often in", "paragraph_id": "para_446" }, { "text": "“aftermarkets,” where “demand for a good is entirely", "paragraph_id": "para_447" }, { "text": "dependent on the prior purchase of a durable good in a", "paragraph_id": "para_448" }, { "text": "foremarket.” Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 976", "paragraph_id": "para_449" }, { "text": "(9th Cir. 2023). In Eastman Kodak, for example, the demand", "paragraph_id": "para_450" }, { "text": "for the parts and servicing of Kodak photocopiers (the", "paragraph_id": "para_451" }, { "text": "aftermarkets) depended on the purchase of Kodak equipment", "paragraph_id": "para_452" }, { "text": "(the foremarket). See 504 U.S. at 456-58.", "paragraph_id": "para_453" }, { "text": "15", "paragraph_id": "para_454" }, { "text": "Our circuit has never articulated the circumstances under", "paragraph_id": "para_455" }, { "text": "which a single-brand aftermarket is accurately defined. On", "paragraph_id": "para_456" }, { "text": "appeal, PhantomALERT presses two alternative theories.", "paragraph_id": "para_457" }, { "text": "Neither succeeds.", "paragraph_id": "para_458" }, { "text": "The first would find a single-brand aftermarket when", "paragraph_id": "para_459" }, { "text": "customers’ foremarket purchases “lock them into the", "paragraph_id": "para_460" }, { "text": "aftermarket,” thus preventing substitution away from that", "paragraph_id": "para_461" }, { "text": "brand. Appellant Br. 39-45 (citing Eastman Kodak, 504 U.S.", "paragraph_id": "para_462" }, { "text": "451). Under this theory, if customers are “generally unaware”", "paragraph_id": "para_463" }, { "text": "of an aftermarket restriction when buying a foremarket", "paragraph_id": "para_464" }, { "text": "product, they will be unable to price that restriction into their", "paragraph_id": "para_465" }, { "text": "purchasing decisions. Id. at 40. That dynamic can constrain", "paragraph_id": "para_466" }, { "text": "competition in the aftermarket even if the defendant does not", "paragraph_id": "para_467" }, { "text": "have market power in the foremarket. See Posner Amicus Br.", "paragraph_id": "para_468" }, { "text": "9-11. The App Store, according to PhantomALERT,", "paragraph_id": "para_469" }, { "text": "constitutes a single-brand aftermarket for the iPhone because", "paragraph_id": "para_470" }, { "text": "“Apple customers are locked into the App Store” when they", "paragraph_id": "para_471" }, { "text": "purchase iPhones. Appellant Br. 40.", "paragraph_id": "para_472" }, { "text": "To identify a market under that “lock-in” theory, plaintiff", "paragraph_id": "para_473" }, { "text": "asks us to embrace the test in Epic Games. There, the Ninth", "paragraph_id": "para_474" }, { "text": "Circuit held that a plaintiff seeking to identify a single-brand", "paragraph_id": "para_475" }, { "text": "aftermarket must nonetheless show that the market the plaintiff", "paragraph_id": "para_476" }, { "text": "identifies encompasses all reasonable substitutes. See 67 F.4th", "paragraph_id": "para_477" }, { "text": "at 977; see Appellant Br. 40-44 (tracking the Epic Games", "paragraph_id": "para_478" }, { "text": "factors); Oral Arg. Rec. 39:24-54 (plaintiff’s counsel stating", "paragraph_id": "para_479" }, { "text": "that the Epic Games factors “pretty accurately describe” the", "paragraph_id": "para_480" }, { "text": "appropriate test and “include . . . a general understanding of", "paragraph_id": "para_481" }, { "text": "cross-elasticity”); Posner Amicus Br. 11 (listing Epic Games", "paragraph_id": "para_482" }, { "text": "factors). We therefore assume without deciding that such a", "paragraph_id": "para_483" }, { "text": "requirement applies to a complaint alleging a single-brand", "paragraph_id": "para_484" }, { "text": "aftermarket on the basis of Eastman Kodak-style lock-in.", "paragraph_id": "para_485" }, { "text": "16", "paragraph_id": "para_486" }, { "text": "The amended complaint does not clear that hurdle. It is", "paragraph_id": "para_487" }, { "text": "bereft of allegations speaking to either a hypothetical", "paragraph_id": "para_488" }, { "text": "monopolist test, the Brown Shoe factors, or the availability of", "paragraph_id": "para_489" }, { "text": "substitutes with regard to a market of “access to apps on the", "paragraph_id": "para_490" }, { "text": "iPhone” consisting solely of the App Store. Material relevant", "paragraph_id": "para_491" }, { "text": "to those legal requirements is absent from the amended", "paragraph_id": "para_492" }, { "text": "complaint outside of allegations about the smartphone", "paragraph_id": "para_493" }, { "text": "market—allegations copied from a complaint filed by the U.S.", "paragraph_id": "para_494" }, { "text": "Department of Justice in a separate case. See Am. Compl.", "paragraph_id": "para_495" }, { "text": "¶¶ 15-16 (J.A. 71-73) (quoting United States v. Apple, Inc., No.", "paragraph_id": "para_496" }, { "text": "24-4055 (D.N.J. June 11, 2024), ECF No. 51 (Am. Compl.)", "paragraph_id": "para_497" }, { "text": "¶¶ 172-79). As already noted, we are assuming that plaintiff", "paragraph_id": "para_498" }, { "text": "has sufficiently alleged the smartphone market. The amended", "paragraph_id": "para_499" }, { "text": "complaint’s shortcoming is that it does not plausibly allege a", "paragraph_id": "para_500" }, { "text": "lack of substitutes for the App Store, so fails to plausibly allege", "paragraph_id": "para_501" }, { "text": "that the App Store is a relevant single-brand product market.", "paragraph_id": "para_502" }, { "text": "Indeed, one potential substitute comes immediately to mind:", "paragraph_id": "para_503" }, { "text": "accessing apps on a web browser. See Appellee Br. 34-35;", "paragraph_id": "para_504" }, { "text": "Reilly v. Apple, Inc., 578 F. Supp. 3d 1098, 1108 (N.D. Cal.", "paragraph_id": "para_505" }, { "text": "2022) (making this point). Perhaps websites are not a", "paragraph_id": "para_506" }, { "text": "substitute for the App Store in the market for “access to apps", "paragraph_id": "para_507" }, { "text": "on the iPhone.” But if they are not, the amended complaint", "paragraph_id": "para_508" }, { "text": "does not explain why.", "paragraph_id": "para_509" }, { "text": "Resisting this conclusion, PhantomALERT asserts that", "paragraph_id": "para_510" }, { "text": "“practical indicators” and the “hypothetical monopolist test”", "paragraph_id": "para_511" }, { "text": "point to the App Store as a relevant single-brand market.", "paragraph_id": "para_512" }, { "text": "Appellant Br. 37-38; Reply Br. 17-23. But those allegations", "paragraph_id": "para_513" }, { "text": "were never before the district court. The amended complaint", "paragraph_id": "para_514" }, { "text": "barely identifies—much less plausibly alleges—a relevant", "paragraph_id": "para_515" }, { "text": "product market consisting solely of the App Store. That", "paragraph_id": "para_516" }, { "text": "“fail[ure] to draw the market’s boundaries to encompass the", "paragraph_id": "para_517" }, { "text": "product at issue as well as all economic substitutes for [it]”", "paragraph_id": "para_518" }, { "text": "dooms plaintiff’s attempt to allege a single-brand aftermarket.", "paragraph_id": "para_519" }, { "text": "17", "paragraph_id": "para_520" }, { "text": "Coronavirus Reporter v. Apple, Inc., 85 F.4th 948, 956 (9th", "paragraph_id": "para_521" }, { "text": "Cir. 2023) (quotation marks omitted).", "paragraph_id": "para_522" }, { "text": "PhantomALERT fares no better on its alternative theory.", "paragraph_id": "para_523" }, { "text": "Plaintiff and its amicus assert that significant market power in", "paragraph_id": "para_524" }, { "text": "the foremarket (here, smartphones in the United States) can", "paragraph_id": "para_525" }, { "text": "enable a defendant to suppress competition in a related", "paragraph_id": "para_526" }, { "text": "aftermarket, regardless of whether customers are locked in to", "paragraph_id": "para_527" }, { "text": "purchasing the aftermarket product (here, the App Store). See", "paragraph_id": "para_528" }, { "text": "Appellant Br. 45-48 (citing Lambrix v. Tesla, Inc., 737 F. Supp.", "paragraph_id": "para_529" }, { "text": "3d 822 (N.D. Cal. 2024)); Posner Amicus Br. 6-9. But plaintiff", "paragraph_id": "para_530" }, { "text": "never pressed such a “foremarket power” framework before the", "paragraph_id": "para_531" }, { "text": "district court. See Reply ISO LTF at 12-21 (J.A. 211-20). It", "paragraph_id": "para_532" }, { "text": "therefore forfeited any reliance on that theory. See Keepseagle", "paragraph_id": "para_533" }, { "text": "v. Perdue, 856 F.3d 1039, 1055 (D.C. Cir. 2017); compare also", "paragraph_id": "para_534" }, { "text": "Appellee Br. 40 (arguing that PhantomALERT waived the", "paragraph_id": "para_535" }, { "text": "“foremarket power” theory), with Reply Br. 22-24 (failing to", "paragraph_id": "para_536" }, { "text": "address the waiver assertion). Having proceeded solely on a", "paragraph_id": "para_537" }, { "text": "lock-in theory before the district court, PhantomALERT may", "paragraph_id": "para_538" }, { "text": "not switch theories on appeal and ask for reversal on that basis.", "paragraph_id": "para_539" }, { "text": "See Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905", "paragraph_id": "para_540" }, { "text": "F.2d 438, 453 (D.C. Cir. 1990).", "paragraph_id": "para_541" }, { "text": "In sum, the amended complaint does not satisfy a threshold", "paragraph_id": "para_542" }, { "text": "requirement that plaintiff itself has asked us to apply to its", "paragraph_id": "para_543" }, { "text": "primary theory for treating the App Store as a relevant product", "paragraph_id": "para_544" }, { "text": "market, and plaintiff failed to claim in the district court and so", "paragraph_id": "para_545" }, { "text": "has forfeited any reliance on its alternative theory. Either way,", "paragraph_id": "para_546" }, { "text": "PhantomALERT has failed to plausibly allege a single-brand", "paragraph_id": "para_547" }, { "text": "aftermarket consisting of the App Store. That defect dooms", "paragraph_id": "para_548" }, { "text": "Counts I and II in the amended complaint.", "paragraph_id": "para_549" }, { "text": "2.", "paragraph_id": "para_550" }, { "text": "Plaintiff also alleges that Apple monopolized a", "paragraph_id": "para_551" }, { "text": "“submarket” of the App Store it describes as “access to Covid-", "paragraph_id": "para_552" }, { "text": "18", "paragraph_id": "para_553" }, { "text": "19-related tracing apps in the App Store for use in the United", "paragraph_id": "para_554" }, { "text": "States.” Am. Compl. ¶ 87 (J.A. 93). But here, too, the", "paragraph_id": "para_555" }, { "text": "amended complaint fails to adequately draw the boundaries of", "paragraph_id": "para_556" }, { "text": "the proposed market.", "paragraph_id": "para_557" }, { "text": "The first and most basic problem is that PhantomALERT’s", "paragraph_id": "para_558" }, { "text": "own allegations are imprecise and self-contradictory. The", "paragraph_id": "para_559" }, { "text": "amended complaint speaks in terms of a market of “access” to", "paragraph_id": "para_560" }, { "text": "Covid-19-related apps. Id. On its own terms, that allegation", "paragraph_id": "para_561" }, { "text": "proposes a market consisting of means to access Covid-19-", "paragraph_id": "para_562" }, { "text": "related apps within the App Store that is distinct from, and", "paragraph_id": "para_563" }, { "text": "contained within, a market consisting of means to access apps", "paragraph_id": "para_564" }, { "text": "on the App Store without limitation as to type of app—a", "paragraph_id": "para_565" }, { "text": "“single-brand subset of an alleged single-brand aftermarket.”", "paragraph_id": "para_566" }, { "text": "Appellee Br. 44. But PhantomALERT pervasively confuses a", "paragraph_id": "para_567" }, { "text": "market of “access” to such apps, as it alleged, with the market", "paragraph_id": "para_568" }, { "text": "for such apps themselves, to which it sparingly alludes in its", "paragraph_id": "para_569" }, { "text": "amended complaint and more frequently mentions in its", "paragraph_id": "para_570" }, { "text": "briefing and argument to us. See, e.g., Am. Compl. ¶ 87 (J.A.", "paragraph_id": "para_571" }, { "text": "93) (“[Covid-19-related apps] are not substitutable for other", "paragraph_id": "para_572" }, { "text": "apps . . . because they perform/ed a specific purpose relating", "paragraph_id": "para_573" }, { "text": "only to Covid-19 tracing and related actions.”); Appellant Br.", "paragraph_id": "para_574" }, { "text": "48 (“PhantomALERT properly alleges that the market for", "paragraph_id": "para_575" }, { "text": "COVID-tracing apps on the iPhone is a relevant antitrust", "paragraph_id": "para_576" }, { "text": "market.”); Reply Br. 25 (“PhantomALERT alleged the special", "paragraph_id": "para_577" }, { "text": "non-substitutability of COVID-tracing apps . . . .”); Oral Arg.", "paragraph_id": "para_578" }, { "text": "Rec. 14:53-59 (referring to the “Covid tracing app market” as", "paragraph_id": "para_579" }, { "text": "the “central market”).", "paragraph_id": "para_580" }, { "text": "The two markets are not the same. Just as the App Store", "paragraph_id": "para_581" }, { "text": "is not interchangeable with the apps available on it, a market", "paragraph_id": "para_582" }, { "text": "consisting of “Covid-19-related apps” is distinct from a market", "paragraph_id": "para_583" }, { "text": "of “accessing” such apps. A market of “access” to Covid-19-", "paragraph_id": "para_584" }, { "text": "related apps on the iPhone would include every competitor to", "paragraph_id": "para_585" }, { "text": "the App Store as a means for iPhone users to access Covid-19-", "paragraph_id": "para_586" }, { "text": "19", "paragraph_id": "para_587" }, { "text": "related apps; a market consisting of such apps themselves", "paragraph_id": "para_588" }, { "text": "would include every competitor to PhantomALERT’s Covid-", "paragraph_id": "para_589" }, { "text": "tracing app itself.", "paragraph_id": "para_590" }, { "text": "The amended complaint provides no allegations showing", "paragraph_id": "para_591" }, { "text": "that a market of “access to Covid-19-related tracing apps”", "paragraph_id": "para_592" }, { "text": "exists. At oral argument, plaintiff disclaimed the word", "paragraph_id": "para_593" }, { "text": "“access” in its market definition. Oral Arg. Rec. 17:50-18:12.", "paragraph_id": "para_594" }, { "text": "But that is the framing plaintiff presses in the amended", "paragraph_id": "para_595" }, { "text": "complaint—not once, but multiple times, see Am. Compl.", "paragraph_id": "para_596" }, { "text": "¶¶ 86-90 (J.A. 93-94)—and our review is “limited to the", "paragraph_id": "para_597" }, { "text": "complaint,” Coronavirus Reporter, 85 F.4th at 956. Besides,", "paragraph_id": "para_598" }, { "text": "“access” is a pivotal term if the proposed product market is to", "paragraph_id": "para_599" }, { "text": "be, in the words of the amended complaint, a “submarket” for", "paragraph_id": "para_600" }, { "text": "access to apps within “the relevant market of the App Store,”", "paragraph_id": "para_601" }, { "text": "Am. Compl. ¶ 87 (J.A. 93), as a submarket must be “a smaller", "paragraph_id": "para_602" }, { "text": "grouping within the main market,” IIB Phillip E. Areeda &", "paragraph_id": "para_603" }, { "text": "Herbert Hovenkamp, Antitrust Law, ¶ 533(b) n.4 (5th ed.", "paragraph_id": "para_604" }, { "text": "2021), and plaintiff pleads both a market for means to use apps", "paragraph_id": "para_605" }, { "text": "in general and a submarket of means to use Covid-tracing apps", "paragraph_id": "para_606" }, { "text": "as markets for “access.”", "paragraph_id": "para_607" }, { "text": "Even were we to accept plaintiff’s belated reframing,", "paragraph_id": "para_608" }, { "text": "moreover, it would fall short. The only allegation about a", "paragraph_id": "para_609" }, { "text": "potential market for “Covid-19-related tracing apps” states", "paragraph_id": "para_610" }, { "text": "simply that such apps “are not substitutable for other apps”", "paragraph_id": "para_611" }, { "text": "because they perform a “specific purpose relating only to", "paragraph_id": "para_612" }, { "text": "Covid-19 tracing and related actions.” Am. Compl. ¶ 87 (J.A.", "paragraph_id": "para_613" }, { "text": "93). Such a bare, unadorned assertion is little more than a", "paragraph_id": "para_614" }, { "text": "“label[] and conclusion[].” Twombly, 550 U.S. at 555. The", "paragraph_id": "para_615" }, { "text": "district court therefore correctly concluded that", "paragraph_id": "para_616" }, { "text": "PhantomALERT had not plausibly alleged a “submarket”", "paragraph_id": "para_617" }, { "text": "consisting of Covid-19-related apps on the iPhone, much less", "paragraph_id": "para_618" }, { "text": "of access to such apps. Count III of the amended complaint", "paragraph_id": "para_619" }, { "text": "accordingly fails to state a claim.", "paragraph_id": "para_620" }, { "text": "20", "paragraph_id": "para_621" }, { "text": "* * *", "paragraph_id": "para_622" }, { "text": "The amended complaint does not plausibly allege the", "paragraph_id": "para_623" }, { "text": "product markets on which its Sherman Act counts are", "paragraph_id": "para_624" }, { "text": "premised. It therefore does not state a claim for relief under", "paragraph_id": "para_625" }, { "text": "that statute. PhantomALERT does not dispute the district", "paragraph_id": "para_626" }, { "text": "court’s conclusion that the California Cartwright Act count", "paragraph_id": "para_627" }, { "text": "rises or falls with the Sherman Act allegations, see Op. 8 (J.A.", "paragraph_id": "para_628" }, { "text": "232) (first citing Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236", "paragraph_id": "para_629" }, { "text": "F.3d 1148, 1160 (9th Cir. 2001); and then citing Golan v.", "paragraph_id": "para_630" }, { "text": "Pingel Enter., Inc., 310 F.3d 1360, 1369 (Fed. Cir. 2002)), so", "paragraph_id": "para_631" }, { "text": "we do not separately address that claim. Plaintiff also does not", "paragraph_id": "para_632" }, { "text": "appeal, and has forfeited any challenge to, the district court’s", "paragraph_id": "para_633" }, { "text": "dismissal of the California Unfair Competition Law claim. See", "paragraph_id": "para_634" }, { "text": "id. at 19-21 (J.A. 243-45). We therefore affirm the district", "paragraph_id": "para_635" }, { "text": "court’s conclusion that the amended complaint fails to state a", "paragraph_id": "para_636" }, { "text": "claim for relief.", "paragraph_id": "para_637" }, { "text": "III.", "paragraph_id": "para_638" }, { "text": "One final wrinkle bears ironing out. PhantomALERT", "paragraph_id": "para_639" }, { "text": "expressed concern at oral argument that the district court’s", "paragraph_id": "para_640" }, { "text": "judgment not be treated as dismissal “with prejudice.” Oral", "paragraph_id": "para_641" }, { "text": "Arg. Rec. 0:35-1:12, 24:19-27:45 (citing Moyar v. U.S. Dep’t", "paragraph_id": "para_642" }, { "text": "of Def., 2024 WL 2795958 (D.C. Cir. May 31, 2024) (per", "paragraph_id": "para_643" }, { "text": "curiam)). A with-prejudice dismissal of the case might have", "paragraph_id": "para_644" }, { "text": "carried res judicata effect. See Cohen v. Bd. of Trs. of the Univ.", "paragraph_id": "para_645" }, { "text": "of D.C., 819 F.3d 476, 478 (D.C. Cir. 2016). Unlike in Moyar,", "paragraph_id": "para_646" }, { "text": "however, the district court here did not hold that no conceivable", "paragraph_id": "para_647" }, { "text": "amended pleading could “‘possibly cure the deficiency’", "paragraph_id": "para_648" }, { "text": "warranting dismissal in the first place,” Moyar, 2024 WL", "paragraph_id": "para_649" }, { "text": "2795958, at *4 (quoting Belizan v. Hershon, 434 F.3d 579, 583", "paragraph_id": "para_650" }, { "text": "(D.C. Cir. 2006)), but only that plaintiff’s proffered amended", "paragraph_id": "para_651" }, { "text": "complaint did not do so, see Op. 6, 21 (J.A. 230, 245).", "paragraph_id": "para_652" }, { "text": "Measured by this circuit’s “high” bar for dismissing an action", "paragraph_id": "para_653" }, { "text": "21", "paragraph_id": "para_654" }, { "text": "with prejudice, Belizan, 434 F.3d at 583, we see no reason to", "paragraph_id": "para_655" }, { "text": "construe the district court’s order here to have effected such a", "paragraph_id": "para_656" }, { "text": "dismissal. Provided it could clear any other limitations to suit,", "paragraph_id": "para_657" }, { "text": "PhantomALERT remains free to file a separate action in the", "paragraph_id": "para_658" }, { "text": "district court. See Cooter & Gell v. Hartmarx Corp., 496 U.S.", "paragraph_id": "para_659" }, { "text": "384, 396 (1990) (dismissal without prejudice does not have res", "paragraph_id": "para_660" }, { "text": "judicata effect).", "paragraph_id": "para_661" }, { "text": "* * *", "paragraph_id": "para_662" }, { "text": "For the foregoing reasons, we affirm the judgment of the", "paragraph_id": "para_663" }, { "text": "district court.", "paragraph_id": "para_664" }, { "text": "So ordered.", "paragraph_id": "para_665" } ], "word_count": 5781, "cites": [ "467 U.S. 752", "547 U.S. 28", "433 U.S. 36", "435 U.S. 679", "585 U.S. 529", "466 U.S. 2", "384 U.S. 563", "550 U.S. 544", "527 U.S. 198", "574 U.S. 405", "418 U.S. 602", "602 U.S. 257", "370 U.S. 294", "504 U.S. 451", "504 U.S.\n451", "496 U.S.\n384", "253 F.3d 34", "39\nF.4th 756", "77 F.4th\n932", "100 F.4th 236", "977 F.3d 1244", "355 F.3d 661", "956 F.3d 621", "865 F.3d 620", "124\nF.3d 430", "501\nF.3d 297", "792 F.2d 210", "548 F.3d\n1028", "105 F.4th\n418", "420 F.2d 209", "275 F.3d 191", "67 F.4th 946", "85 F.4th 948", "856 F.3d 1039", "905\nF.2d 438", "236\nF.3d 1148", "310 F.3d 1360", "819 F.3d 476", "434 F.3d 579" ], "cited_by": [], "sha256": "bfbcff4e87106b15507036f0128353fde2e1f3c0d686061e6749fa2e17fceead", "source_url": "https://media.cadc.uscourts.gov/opinions/docs/2026/07/25-7017-2184926.pdf", "fetched_at": "2026-10-03T04:03:15.018+00:00", "canonical": "https://legal.exploreworldai.com/ai/judgments/us/cadc-25-7017-2026-07-24", "risk_graph": "https://legal.exploreworldai.com/api/public/v1/risk?id=us:cadc-25-7017-2026-07-24", "relations_graph": "https://legal.exploreworldai.com/api/public/v1/relations?id=us:cadc-25-7017-2026-07-24", "changes": "https://legal.exploreworldai.com/api/public/v1/us-praxis/changes", "agent": "https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:cadc-25-7017-2026-07-24", "verification": { "stored_sha256": "bfbcff4e87106b15507036f0128353fde2e1f3c0d686061e6749fa2e17fceead", "recomputed_sha256": "bfbcff4e87106b15507036f0128353fde2e1f3c0d686061e6749fa2e17fceead", "intact": true, "checked_at": "2026-10-11T12:35:20.328Z" } }, "hash": "sha256:d5b6a0c33e46acba25328023f960b46cbe5184377433499970af495cc6d77596", "version": "legal-2026-10-11", "expires": "2026-10-12T00:00:00.000Z", "dependency": { "index_version": "legal-2026-10-11+legal-2026-10-11+2026-10-11T12:28:30", "content_hash": "sha256:d5b6a0c33e46acba25328023f960b46cbe5184377433499970af495cc6d77596", "revalidate_after": "2026-10-11T13:35:20.482Z", "max_copy_age_seconds": 3600, "policy": "revalidate-required; attribution-preferred", "changelog": "https://legal.exploreworldai.com/api/public/v1/dependency", "verify": "https://legal.exploreworldai.com/api/public/v1/verify", "stale_copy_invalid": true }, "canonical": "https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:cadc-25-7017-2026-07-24", "follow": [ { "rel": "risk", "href": "https://legal.exploreworldai.com/api/public/v1/risk?id=us:cadc-25-7017-2026-07-24" }, { "rel": "relations", "href": "https://legal.exploreworldai.com/api/public/v1/relations?id=us:cadc-25-7017-2026-07-24" }, { "rel": "agent", "href": "https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:cadc-25-7017-2026-07-24" }, { "rel": "obligations", "href": "https://legal.exploreworldai.com/api/public/v1/obligation-chain" }, { "rel": "changes", "href": "https://legal.exploreworldai.com/api/public/v1/whats-new?jurisdiction=us" } ], "disclaimer": "Source reference with official identifier. 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