941 F. Supp. 2d 1227
C.D. Cal.2013Background
- Blizzard moves to dismiss Defendants' FACC amid antitrust and related claims about WoW add-ons.
- Defendants alleged a market for WoW add-ons and monopolistic/tying conduct by Blizzard.
- Court previously dismissed the initial counterclaims for lack of a proper product market definition.
- FACC redefines the relevant market as WoW add-ons enabling faster leveling and alleges products are interchangeable.
- Court must assess whether Blizzard has market power in the alleged aftermarket and whether contractual restraints grant cognizable market power.
- Court grants Blizzard's motion to dismiss the FACC with prejudice due to lack of cognizable market power from the contractual restraints.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the FACC's market definition facially plausible? | Blizzard argues market is too broad and not interchangeable with CF bots. | Defendants contend market plausibly includes interchangeable WoW add-ons. | Facially plausible market definition survives at pleadings stage. |
| Does Blizzard's power arise from contractual restraints rather than an actual market power? | Defendants rely on EULA/TOU to claim power in aftermarket. | Blizzard contends power stems from voluntary contracts, not a cognizable market power. | Market power derived from contractual restraints is not cognizable antitrust power. |
| Do the tying/monopolization claims survive with pleaded market power? | N/A (Blizzard argues lack of cognizable market power defeats claims). | Defendants allege tying and monopolization based on market power. | Tying/monopolization claims fail due to lack of cognizable market power. |
| Does UCL counterclaim fail as derivative of antitrust claims? | UCL relies on the predicate antitrust claims. | N/A | UCL claim fails as the underlying antitrust claims fail. |
Key Cases Cited
- Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038 (9th Cir. 2008) (relevant-market test; distinguishes derivative vs. initial markets; market power from contract can be non-cognizable)
- Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430 (3d Cir. 1997) (contractual restraints creating submarkets may be insufficient for antitrust power)
- Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (U.S. 1992) (consumers' knowledge of restraints; aftermarket power depends on knowledge at purchase)
- Psystar Corp. v. Apple Inc., 586 F. Supp. 2d 1190 (N.D. Cal. 2008) (contractual restraints on aftermarket power; enforceability of EULA-based limits)
- Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001) (market definition is fact-intensive; not best resolved on pleadings)