Volkswagen Group of America, Inc. v. Smartcar, Inc.
4:21-cv-04895
N.D. Cal.Sep 25, 2024Background
- Smartcar is a developer of an API that facilitates third-party access to vehicle telematics data (such as mileage and diagnostics) for use in applications across multiple automotive brands.
- Volkswagen Group of America, Inc. (VWGoA) restricts access to telematics data generated by its vehicles through user agreements, allowing data sharing only for personal, non-commercial use and only via VWGoA-approved services.
- Smartcar alleges these restrictions prevent VWGoA vehicle owners from using third-party apps, limit competition, and harm innovation in the broader telematics ecosystem.
- Smartcar filed counterclaims against VWGoA, including claims under the Sherman Act (illegal tying and monopolization), California's Cartwright Act, California's Unfair Competition Law (UCL), and for breach of contract based on a data-sharing public commitment.
- VWGoA moved to dismiss all of Smartcar’s counterclaims except for declaratory judgment of no false association, arguing the counterclaims were inadequately pled.
Issues
| Issue | Plaintiff's Argument (VWGoA) | Defendant's Argument (Smartcar) | Held |
|---|---|---|---|
| Relevant market definition (antitrust) | Smartcar failed to define a clear relevant market, dooming its antitrust claims. | Smartcar defined multiple relevant markets based on access to telematics data and services. | Dismissed: Markets were unclearly and inconsistently defined. |
| Geographic market scope | Complaint lacks any plausible geographic delimitation of markets. | U.S. market is sufficient, citing references to U.S.-centric operations. | Dismissed: Complaint insufficiently alleges geographic scope. |
| Standing and antitrust harm | Smartcar lacks antitrust standing and doesn't adequately allege competitive harm. | Restrictions exclude Smartcar from market and suppress application innovation. | Not reached: Market definition failure is dispositive. |
| Existence of enforceable contract | Public data sharing commitment is not an enforceable contract with Smartcar. | VWGoA’s membership in data sharing commitments creates an enforceable contract. | Dismissed: No plausible facts show a contract exists. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (Plausibility pleading standard for Rule 12(b)(6) motions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Antitrust claims must plausibly state an entitlement to relief)
- Brown Shoe Co. v. United States, 370 U.S. 294 (Market definition must consider reasonable interchangeability and cross-elasticity of demand)
- Newcal Indus., Inc. v. Ikon Off. Solution, 513 F.3d 1038 (Complaint must plausibly allege a relevant product market in antitrust cases)
- FTC v. Qualcomm Inc., 969 F.3d 974 (Defining the relevant market is a threshold step in antitrust litigation)
- Epic Games, Inc. v. Apple, Inc., 67 F.4th 946 (Relevant antitrust market must include both product and geographic component)