[00:00:00] Speaker 01:
May it please the Court. Good morning, Your Honors. My name is Justin Strother from Diamond McCarthy, and I represent Unlocked, the plaintiff appellant. There are two areas that I would like to cover in my argument. Oh, thank you. I would like to reserve three minutes for rebuttal, please.

[00:00:15] Speaker 02:
All right. I'll try to help you out, but keep your eye on the clock, please.

[00:00:18] Speaker 01:
Will do. There are two areas I would like to cover today in my argument. The first is that the district court ruled against Unlocked at the pleading stage on one ground only, and that is, according to the district court, that Unlocked had failed to plead injury to the marketplace and had only pleaded injury to itself.

[00:00:39] Speaker 01:
We believe that is demonstrably false. The second area is, while the district court did not address any of Google's other arguments, Google does ask this court to uphold the dismissal on alternative grounds, the primary one being that according to Google, Unlock's complaint does not fit into the Aspen skiing exception. So that would be my second area. Moving on to antitrust injury first, the district court wrote that Unlocked, and I quote, offered no factual support from which the court could assume that harm to plaintiffs is somehow tantamount to harm to this entire market.

[00:01:15] Speaker 01:
Contrary to what the district court wrote, Unlocked not only plausibly pleaded injury to the marketplace, it did so thoroughly and explicitly.

[00:01:25] Speaker 02:
What's the market?

[00:01:26] Speaker 01:
Digital advertising.

[00:01:29] Speaker 02:
What's the breadth of your market?

[00:01:31] Speaker 01:
Well, we pleaded alternatively. The breadth of the market is all digital advertising of the main two varieties, which would be on any sort of digital instruments, including mobile phones, which is our case.

[00:01:44] Speaker 02:
Nationwide and some other foreign countries as well.

[00:01:46] Speaker 01:
Six total countries, but alternatively just the United States.

[00:01:49] Speaker 02:
That's a very broad market.

[00:01:51] Speaker 01:
Broad is one word, Your Honor.

[00:01:54] Speaker 01:
The market is the market with regard to digital advertising.

[00:01:57] Speaker 02:
Is it a market where similar products are now currently being offered?

[00:02:01] Speaker 01:
Similar, yes, Your Honor. For example, Google still is offering digital advertising through its search mechanisms.

[00:02:10] Speaker 02:
So tell me again where the district court erred. You're boxed out of the market, a very big market, in which similar products are still currently being offered. So what's the injury to the markets? versus the injury to unlock?

[00:02:23] Speaker 01:
Certainly. Your Honor, in the digital advertising marketplace, there are two varieties of customers. So I'd like to focus there and demonstrate how the injury reaches those customers, which I think is something that this Court's precedent invites. The two varieties of customers are, number one, the end user, the human being who is viewing the advertisement on their digital device. The other variety of customer or consumer would be the advertisers, who are buying ad space in which to digitally have their advertisements published to these end consumers.

[00:02:56] Speaker 01:
Both of those are customers in the digital advertising marketplace. And both of them were harmed. The two most evident places we pointed this out in our complaint are with regard to the end user.

[00:03:07] Speaker 01:
Unlock's advertising system had the end users receiving rewards.

[00:03:13] Speaker 01:
They were monetarily being rewarded for opting in to the system where they would view these advertisements. By 2018, that figure reached $122 million, and it was projected to be almost a half billion dollars in the next five years. After Unlocked was banned by Google, that number went down to zero. So that is a demonstrable injury directly to the consumer's pocketbook, and that alone should carry the day. That is one solid injury, and that's all that Unlocked has to plead at the pleading stage. But with regard to the advertisers, they were similarly harmed.

[00:03:45] Speaker 01:
The advertisers pay a rate for digital advertising that's called CPM, which somehow stands for thousands impressions, a thousand views of an advertisement.

[00:03:57] Speaker 01:
In the years from 2018 to 2022, beginning with Unlock's banning, that price that advertisers paid for similar advertising in the digital advertising marketplace tripled or almost tripled. That is a significant harm felt by the main participants in this marketplace. It has nothing to do with injury to not just Unlocked, but competitors similarly situated to Unlocked, Your Honor.

[00:04:24] Speaker 01:
And so we believe that those two injuries carry the day. There are multiple other injuries through dozens and dozens of paragraphs, but I'm going to move on in the interest of time.

[00:04:40] Speaker 01:
I'd like to move on to the Aspen skiing exception. To meet the Aspen skiing exception, Unlocked has to plead the following, that a monopolist gave up a voluntary and profitable course of dealing in a way that sacrifices short-term profit that makes no economic sense except to exclude a competitor. And this is precisely what Unlocked pleaded. There was definitely a two-year voluntary course of dealing. Google initially approved Unlocked's apps and then investigated over a period of a couple of years, intermittently reversing course and saying, we need to know more.

[00:05:14] Speaker 01:
This was not just a mechanical review of Unlock's business practices and their app, but face-to-face meetings and conversations in various places, including Dublin, at a very high level. These are not just the people at the very bottom at Google who are reviewing it. And ultimately, every single time Google looked, does Unlock meet our policies? And it found it did. It only reversed course when Unlock became such a big threat and was about to have an IPO, enabling it to become an even bigger threat to pull more advertisers over to Unlock's superior product and away from Google's inferior product.

[00:05:50] Speaker 01:
And I'd like to explain what I mean by that briefly. The way that a digital advertising product can best be reviewed is click-through rate. How many times does someone see an ad and actually click on it and go do something on that? Unlock's click-through rate ultimately not only exceeded the marketplace average, but it exceeded Google's average. And so Unlock became a significant threat and was beginning to be moneyed in the marketplace and was going to be able to threaten more and more Google.

[00:06:23] Speaker 01:
This relationship was profitable to Google. Google received somewhere between 20% and 30% of the share of Unlock's revenue. And so with Google banning Unlocked, Google was itself hurt, and that is what Aspen skiing asked to have happen. Aspen skiing also says, but wait, is there a valid business reason that would otherwise explain a monopolist allowing themselves to be financially harmed? Google did, and its policy suggests that consumer experience was a policy reason to support it banning Unlocked, but that is pretext.

[00:07:00] Speaker 01:
And pretext is something that Unlock pleaded in great detail.

[00:07:07] Speaker 01:
And I'd like to, I know I'm down to my three minutes, but I'm going to take one more minute, I think.

[00:07:13] Speaker 01:
The idea of pretext comes not just from this court's precedent, including in the ImageTech versus Kodak case, and also more recently the coronavirus reporter case in 2023. It goes all the way back to Aspen skiing. That case went to the U.S. Supreme Court only after a jury trial and not at the pleading stage.

[00:07:33] Speaker 01:
And the defendant in that case gave a pretextual reason for refusing to continue to participate in a multi-ski area pass. And one of its reasons was, hey, this is administratively uncombersome. And that's because we don't want to take coupons at our booths to allow for these multi-area passes to be used. The Supreme Court looked at that and said, I'm sorry, that's pretextual. That's no reason at all. You are using coupons at your other areas. That's exactly the same sort of pretext that Unlocked has created here, which is when Unlocked was banned, Google did allow a smaller competitor named Poster to continue on.

[00:08:13] Speaker 01:
And after Google was banned, and this is another way Google injured itself, Google dug into its short-term pockets to invest in a competitor called Glance that was going to be doing the exact same thing as Unlocked. Your Honor, I'll reserve the rest of my time.

[00:08:26] Speaker 02:
Thank you.

[00:08:40] Speaker 00:
Good morning, Your Honors. May it please the Court, Dee Bansal, on behalf of Appellee Google.

[00:08:46] Speaker 00:
The threshold question in any private antitrust case is whether the plaintiff has antitrust standing such that they can seek redress under the antitrust laws. Despite multiple opportunities, Unlocked has failed to plausibly allege that it has such standing because it has not plausibly alleged antitrust injury. We therefore ask this panel to please affirm the lower court, and in the alternative, we ask the panel to affirm on the grounds that plaintiffs have failed to plausibly plead a Section 2 violation.

[00:09:20] Speaker 00:
Even if all of Unlocked's allegations are taken as true, those allegations are insufficient to constitute antitrust injury for four independent reasons. One, as my friend just discussed, unlocked only pled harm to itself, not harm to competition as a whole. Two, its allegations are conclusory, unspecified by any fact, unsupported. Three, even if all of those allegations are taken together and all inferences are drawn in favor of the plaintiff, They do not hold together to plead a plausible theory of injury.

[00:09:57] Speaker 00:
And four, Unlocked pleads allegations of harm in markets in which they do not participate and which have nothing to do with this litigation.

[00:10:07] Speaker 00:
There is no doubt that Unlocked's complaint describes losses to itself. It describes its lost partnerships, its lost revenues, its lost potential.

[00:10:18] Speaker 00:
But where it fails is when it tries to describe harm to the marketplace. As the lower court aptly wrote, and this is at 3ER366, Unlock's injury argument collapses into a single conclusory point. Consumers were harmed because they were unable to benefit from Unlock's innovative business model.

[00:10:42] Speaker 02:
There's certainly that, but counsel did talk about the harm to consumers and to advertisers.

[00:10:48] Speaker 02:
To what extent at this stage do we consider sort of the magnitude of the harm? I mean, I think the difficulty for their case is the bigger the marketplace with the number of players involved, the harder it is to demonstrate antitrust injury. But it's not only the revenues to unlock, right? There are some consumer allegations of consumer advertisers who are deprived of the opportunity to avail themselves of unlocked services.

[00:11:18] Speaker 00:
You're exactly right, Your Honor. They have a real problem here, given that the market they have pled is astonishingly broad. This is a digital advertising market that includes every company that offers digital advertising that can be consumed over the Internet in six countries. And they would like this court to believe that the removal of a singular app is going to have any impact on prices, output, innovation.

[00:11:52] Speaker 00:
So, plaintiff's counsel talked about the rewards, for example, the loss of the rewards to plaintiffs. But they have conceded that every player in this market is a reasonable substitute. If a user cannot get the rewards from Unlocked, they have conceded that they can get similar benefits from any of the players in that very, very broad market. So their legal theory doesn't hold together, and this circuit's opinion in Summers v. Apple is similar in that the theory of harm was not plausible, and this circuit found that that was sufficient to not allow the claim to go forward.

[00:12:32] Speaker 00:
In addition, the allegations that they do put forth about prices, for example, there is a singular paragraph that talks about prices potentially going up. And the lower court correctly pointed out that is the only paragraph that comes even remotely close to alleging something akin to harm. But there are some real problems with that paragraph. So first, and this is at paragraph 247, which Your Honor is at the record at 1ER85.

[00:13:03] Speaker 00:
So that paragraph, first, It does not tell us the geographic range in which the prices go up. Second, it doesn't tell us what the precise conduct is that resulted in the supposed price increase. For example, they say exclusion of unlocked from the digital advertising market and Google's other anti-competitive conduct. As Judge Gilliam correctly wrote, there is no way to link any harm to any to any injury.

[00:13:41] Speaker 00:
And then the third problem is that we don't know what types of ads within this very broad market supposedly had this price increase. They talk about digital ads for the type that Unlocked was supplying. But of course, that is one specific type of advertising in the very broad market that they alleged. And so their allegations suffer from being conclusory and also for not putting together a legal theory that can plausibly plead injury.

[00:14:17] Speaker 00:
On this very point, as the circuit said in Liz Shockley, although proof of plaintiff's allegations would establish harm to their business interests, such proof would not, standing alone, show injury to competition as a whole.

[00:14:33] Speaker 00:
Now, as we understand plaintiff's papers, they have two responses. First, they argue that their harm is the antitrust injury. We've already addressed that.

[00:14:43] Speaker 00:
Second, they talk about a range of harms that they supposedly suffered in other markets. And here, they import paragraphs from the Department of Justice's complaint in a completely separate litigation in the Eastern District of Virginia.

[00:15:05] Speaker 00:
Unlocked does not participate in those markets, and this circuit is clear that a plaintiff cannot suffer harm in markets in which they don't compete. And to highlight this point, Your Honor, we would point the court to 2ER 156, footnote 4. And that's where the Department of Justice very clearly explains that their markets are limited to web advertising. And within that footnote, they expressly carve out digital advertising on mobile apps.

[00:15:45] Speaker 00:
And, of course, Unlocked only offers advertising on mobile apps. And so, as this circuit has said, a plaintiff cannot allege injury in markets in which they do not compete.

[00:15:59] Speaker 00:
Your Honor, I have more that I can say unless this panel has any questions. Otherwise, I'm happy to sit down. Let me see if my colleagues have any additional questions.

[00:16:08] Speaker 02:
All right. Thank you, counsel. Thank you.

[00:16:22] Speaker 01:
Your Honor, let me begin by saying my friend criticized The one paragraph said, but there's just one paragraph that talks about price.

[00:16:33] Speaker 01:
That's all that we need. In fact, we don't even need price to prove injury to the marketplace, but we did. But I find it not a fair criticism to say, but it was only in one paragraph. That's more than enough.

[00:16:45] Speaker 01:
And the criticisms of that one paragraph would go to the weight of that assertion and not the fact or not the quality of whether it was plausible or not. Geographically, that goes to weight.

[00:16:59] Speaker 01:
The type of injury or the type of advertisement that was being priced, we clearly pleaded that it was the type that Unlocked was selling. And finally, the effect on the price and what the precise effect was goes to an issue of magnitude of effect, not existence of effect. We believe that under PLS.com, this court's precedent, that removing a nation competitor from the marketplace can itself equal injury to competition. But as counsel has pointed out, and less shockingly, it need not.

[00:17:30] Speaker 01:
And so this court can decide on the basis alone that unlocked was removed that there was injury. However, the court can also decide that that alone does not qualify. We have given this court and the lower court other reasons to find that the marketplace was injured. When I hear the lower court or my friend say that there were no allegations of injury to the marketplace, I really don't know how they could possibly say that because they are ignoring what is plainly pleaded there and are dispensing with thorough and plausible pleadings as conclusory when we have metrics and data to back up what we say the injury to the marketplace is.

[00:18:05] Speaker 01:
Thank you.

[00:18:05] Speaker 02:
All right. Thank you very much to both sides for your argument this morning. The matter is submitted.