United States District Court, D. New Jersey
BRANDY A. ALLEN, Plaintiff,
VERIZON COMMUNICATIONS, INC. AND CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, Defendants.
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
matter comes before the Court on Defendants Verizon Wireless
Communications, Inc. and Cellco Partnership d/b/a Verizon
Wireless' (hereinafter "Verizon") Motion to
dismiss Plaintiff Brandy A. Allen's amended complaint
pursuant to Fed. R. Civ. Pro. 12(b)(6), (ECF No. 18).
Plaintiff alleges that Verizon and AT&T colluded to limit
their customers' ability to change wireless service
providers, and colluded to set industry standards that
"would allow wireless carriers to lock devices to a
certain network" by conspiring to prevent the use of
eSIM technology. (Amended Compl., ECF No. 3, at ¶¶
2, 4). As a result, Plaintiff, a subscriber of
AT&T, alleges that she has been injured by Verizon and
AT&T's conduct of" artificially limit[ing]
choices in the market for wireless communications services
and artificially inflat[ing] prices." (Id. at
¶¶ 9, 19).
brought the present complaint on behalf of herself and all
others similarly situated, against Verizon alleging
violations of Section I of the Sherman Antitrust Act, 15
U.S.C. § 1, "specifically, the anticompetitive
combination, conspiracy, and/or agreement alleged ... is a
per se violation of Section I of the Sherman Act, 15 U.S.C.
§ 1" or "alternatively, the anticompetitive
combination, conspiracy, and/or agreement alleged . . .
resulted in substantial anticompetitive effects in the market
for wireless communication services in the United
States" (Count I); and a claim for injunctive relief for
violations of Section I of the Sherman Antitrust Act, (Count
description of the technology at issue in this dispute is
necessary. Cell phones utilize subscriber identity modules,
or SIM cards, that contain unique identifying information
about a specific user, which identifies that user to a
specific wireless network. (Id. at ¶ 32).
Wireless service providers, such as Verizon or AT&T, use
SIM cards to determine if a particular cell phone belongs to
a user who is paying for a subscription to use that mobile
network's services. (Id.) SIM cards are
"tiny piece[s] of plastic that users slide into a tray
on their mobile device." (Id. at ¶ 5).
Consumers will typically need to purchase a new SIM card when
changing wireless service providers. (Id.) eSIM
technology "enables remote SIM provisioning of any
mobile device" (Id. at ¶ 33). Essentially,
eSIM technology is embedded into devices, including mobile
phones. (Id. at ¶ 34). With eSIM technology,
mobile phones and other devices no longer require a physical
SIM card to use a wireless network. (Id.) Plaintiff
explains that eSIM technology allows consumers to switch
wireless carriers remotely, without having to travel to
physical store, because "eSIMS can store and adopt
different profiles (or accounts)." (Id. at
¶ 37). Plaintiff explains, M[t]he eSIM
technology is supported by other wireless carriers across the
country and around the world, as well as several gadget
makers, including Apple, Google and Microsoft."
(Id. at ¶ 36).
2016, the Groupe Speciale Mobile Association
("GSMA"), "a mobile industry standard
group," released guidelines that supported the use of
eSIM technology. (Id. at ¶ 6). GSMA is "an
industry organization which represents the interests of
mobile operators worldwide, uniting nearly 800 operators with
more than 300 companies in the broader mobile ecosystem,
including handset and device makers, software companies,
equipment providers and internet companies, as well as
organizations in adjacent industry sectors."
(Id. at ¶ 8). Further, "GSMA also produces
industry events such as Mobile World Congress, Mobile World
Congress Shanghai, Mobile World Congress Americas and the
Mobile 360 Series of conferences." (Id.).
Plaintiff alleges that after the GSMA released the
guidelines, Verizon and AT&T opposed the guidelines, and
"colluded to (1) lock customer eSIMS to their respective
networks; and (2) to have GSMA set new standards allowing the
same." (Id. at ¶ 7). Plaintiff explains
that "locking eSIMS to a single carrier disables one of
the most important functions of eSIM technology - the ability
to simply switch to another carrier without visiting a
physical store and changing a physical SIM card."
complaint alleges that Verizon and AT&T have colluded to
prevent the use of eSIM technology in an effort to
"restrict the ability of consumers to move easily from
one wireless carrier to another." (Id. at
¶ 38). Plaintiff alleges that Verizon and AT&T's
goals were to raise, fix, maintain, or stabilize prices in
the market for wireless communication services by reducing
competition. (Id. at ¶ 48).
support of these allegations, Plaintiff contends the GSMA
offered opportunities for Verizon to conspire with AT&T,
because (1) Verizon's Executive Vice President/Chief
Strategy Officer and AT&T's Executive Vice President
of Global Connection Management both serve as members of the
GSMA board and attend board meetings three times per year;
(2) Verizon and AT&T are using their positions on the
GSMA to influence the GSMA to adopt standards that do not
support eSIM technology, and (3) Verizon and AT&T have
participated in a "private" GSMA meeting,
wherein AT&T and Verizon advocated for their ability to
lock phones to their own networks, not for antitrust
purposes, but to prevent theft and fraud. (Id. at
¶ 41). Finally, in February 2018, Plaintiff alleges that
the Antitrust Division of the United States Department of
Justice began investigating Verizon for its anticompetitive
conspiracy with AT&T, following formal complaints made by
Google and Apple to the DOJ. (Id. at ¶ 51).
despite these allegations, Plaintiffs complaint does not
allege any facts that show Verizon and AT&T were parties
to a conspiracy, or that they entered into an agreement to
stifle completion. The complaint also fails to allege any
facts that show the individual actions of Verizon and
AT&T were in furtherance of any agreement or conspiracy.
Nor does the complaint provide facts describing what occurred
at any "private" GSMA meetings, whether votes are
required to pass industry standards and if so, whether the
large market share of Verizon and AT&T impacts the weight
of the votes.
motion to dismiss for failure to state a claim pursuant to
Fed.R.Civ.P. 12(b)(6), the Court is required to accept as
true all allegations in the Complaint and all reasonable
inferences that can be drawn therefrom, and to view them in
the light most favorable to the non-moving party. See
Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d
1380, 1384 (3d Cir. 1994). "To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is
plausible on its face."' Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
"inquiry is normally broken into three parts: (1)
identifying the elements of the claim, (2) reviewing the
complaint to strike conclusory allegations, and then (3)
looking at the well-pleaded components of the complaint and
evaluating whether all of the elements identified in part one
of the inquiry are sufficiently alleged." Malleus v.
George, 641 F.3d 560, 563 (3d Cir. 2011). While a court
will accept well-pleaded allegations as true for the purposes
of the motion, it will not accept bald assertions,
unsupported conclusions, unwarranted inferences, or sweeping
legal conclusions cast in the form of factual allegations.
Iqbal, 556 U.S. at 678-79; see also Morse v.
Lower Merion School District, 132 F.3d 902, 906 (3d Cir.
1997). A complaint should be dismissed only if the
well-pleaded alleged facts, taken as true, fail to state a
claim. See In re Warfarin Sodium, 214 F.3d 395,
397-98 (3d Cir. 2000).
I of the Sherman Act states that "[e]very contract,
combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States,
or with foreign nations, is hereby declared to be
illegal..." 15 U.S.C. § 1. To maintain an antitrust
action, plaintiffs must plead the following two elements: (1)
"that the defendant was a party to a contract,
combination ... or conspiracy" and (2) "that the
conspiracy to which the defendant was a party imposed an
unreasonable restraint on trade." Burtch v. Millberg
Factors, Inc.,662 F.3d 212 ...