Entri LLC v. GoDaddy.com LLC
1:24-cv-00569
| E.D. Va. | Oct 10, 2024Background
- Entri, LLC ("Entri") provides a product (Entri Connect) that automates DNS configuration for SaaS companies; GoDaddy is the U.S. market leader in domain registration (40% market share).
- GoDaddy previously allowed Entri Connect to configure DNS records for domains registered with GoDaddy via an agreed process; this changed in late 2023 after negotiations over licensing fees broke down.
- GoDaddy revised its terms of use to prohibit third-party DNS configuration aggregators (like Entri Connect) from operating on GoDaddy-registered domains, effectively making GoDaddy's own Domain Connect protocol the only automated option.
- Entri alleges significant business losses, contract cancellations, and loss of business expectancy as a result of GoDaddy's actions and filed suit for antitrust injury, tortious interference with contract, and tortious interference with business expectancy.
- GoDaddy moved to dismiss the Amended Complaint on all claims relevant here; the court denied its motion as to all three counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Section 1 Sherman Act – Cognizable Injury | GoDaddy's ban cut Entri out of 40% of the market, reduced competition, harmed consumers | Only Entri lost business; no market-wide anticompetitive effect | Entri plausibly alleged antitrust injury |
| Section 1 Sherman Act – Negative Tie | GoDaddy used its market power to force users to forgo third-party services, an anticompetitive tie | No tie because purchasers of domain and aggregator are different | Entri plausibly alleged a negative tying arrangement |
| Tortious Interference w/ Contract | GoDaddy intentionally induced Entri's partners to breach, causing damages | No improper methods; no sufficient pleading of intentional interference | Entri sufficiently alleged all elements, including improper methods |
| Tortious Interference w/ Business Expectancy | GoDaddy's actions caused loss of prospective and ongoing business relationships | Insufficient knowledge/causation; no improper methods | Entri plausibly alleged valid expectancy, knowledge, causation |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (sets plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must state a plausible claim)
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (antitrust injury must be of the type the Sherman Act protects)
- Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990) (antitrust injury requires competition-reducing conduct)
- N. Pac. Ry. Co. v. United States, 356 U.S. 1 (1958) (definition of tying arrangements in antitrust)
- Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992) (market share can infer market power in tying cases)
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (tying concerns when consumer choice is limited)
- Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (1984) (characteristics of invalid tying arrangements, abrogated in part)
- Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984) (unilateral vs. concerted antitrust conduct)
- Dickson v. Microsoft Corp., 309 F.3d 193 (4th Cir. 2002) (restraint of trade and proof of agreement in antitrust)
- Chaves v. Johnson, 230 Va. 112 (1985) (elements of tortious interference with business expectancy)
- Duggin v. Adams, 234 Va. 221 (1987) ("improper methods" for interference with at-will contract)