Gte New Media Services, Inc. v. Ameritech Corp., 97-CV-2314 (RMU).
| Decision Date | 28 September 1998 |
| Docket Number | No. 97-CV-2314 (RMU).,97-CV-2314 (RMU). |
| Citation | 21 F.Supp.2d 27 |
| Court | U.S. District Court — District of Columbia |
| Parties | GTE NEW MEDIA SERVICES INCORPORATED, Plaintiff, v. AMERITECH CORPORATION, et al., Defendants. |
Thomas Adam Isaacson, Robert F. Ruyak, Alan Mitchell Wiseman, Darren B. Bernhard, Howrey & Simon, Washington, DC, for GTE New Media Services Incorporated, plaintiff.
Andrew J. Morris, Richard Joseph Favretto, Mayer, Brown & Platt, Washington, DC, for Ameritech Corporation, Ameritech Publishing Inc., Ameritech Interactive Media, Inc, and Ameritech Interactive media Services, Inc., defendants.
Richard William Beckler, Stephen M. McNabb, Fulbright & Jaworski, L.L.P, Washington, DC, for BellSouth Corporation, BellSouth Enterprises, Inc., BellSouth Advertising and Publishing Corp., and Intelligent Media Ventures, Inc., defendants.
Robert J. Zastrow, Bell Atlantic Network Services, Inc., Arlington, VA, Richard G. Taranto, Farr & Taranto, Washington, DC, Mark C. Hansen, Neil M. Gorsuch, Kellogg, Huber, Hansen, Todd & Evans, P.L.L.C., Washington, DC, for Bell Atlantic Corporation, and Bell Atlantic Electronic Commerce Services, Inc., defendants.
Paul H. Friedman, Michael Robert Goodstein, Arter & Hadden, L.L.P., Washington, DC, for SBC Communications, Inc., Pacific Telesis Group and Pacific Bell Interactive Media, defendants.
Mark Daniel Cahn, Stephen Adam Weisbrod, Howard M. Shapiro, Wilmer, Cutler & Pickering, Washington, DC, for U.S. West, Inc., U.S. West Media Group, Inc. and West Dex, Inc, defendants.
Glenn B. Manishin, Blumenfeld & Cohen, Washington, DC, for Netscape Communications Corporation, defendant.
Robert Bruce Holcomb, Dickstein, Shapiro, Morin & Oshinsky, L.L.P., Washington, DC, Joel Linzner, Townsend & Townsend & Crew, LLP, San Francisco, CA, for Yahoo!, Incorporated, defendant.
Denying Defendants' Motions to Dismiss the Complaint for Lack of Personal Jurisdiction and Improper Venue; Denying in Part and Granting in part the Defendants' Motion to Dismiss the Complaint
I. Introduction
The plaintiff filed this action under §§ 4, 16 of the Clayton Act, 15 U.S.C. §§ 15, 26, seeking treble damages and injunctive relief for injuries resulting from the defendants' alleged anti-competitive conduct in the Internet Yellow Pages market. Specifically, the plaintiff alleges the defendants illegally combined and conspired to restrain trade and to monopolize the Internet Yellow Pages market by controlling Internet access points through which competing Internet Yellow Pages providers offer their services. The plaintiff in this action is GTE New Media Services Inc. ("GTE").1 The defendants in this action are the five regional Bell operating companies ("RBOCs"): Ameritech, Bell Atlantic, BellSouth, SBC, and U.S. West and their respective subsidiaries.2
This matter comes before the court on the following motions: Defendants BellSouth, SBC, and U.S. West move to dismiss the complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). Defendants BellSouth and SBC additionally move to dismiss the complaint for improper venue pursuant to Fed.R.Civ.P. 12(b)(3).3 All defendants, except Bell Atlantic, jointly seek to dismiss the complaint pursuant to Fed. R.Civ.P. 12(b)(6) for failure to state a claim because the plaintiff has failed to allege properly federal antitrust violations under §§ 1, 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and District of Columbia unfair competition and tortious interference with an existing contracts and prospective business relationships claims.FN4FN As explained more fully below, upon consideration of the parties' submissions and the relevant law, the court (1) denies Defendants Bell South, SBC, and U.S. West's motions to dismiss for lack of personal jurisdiction and/or improper venue, and (2) denies in part and grants in part the defendants' joint motion to dismiss for failure to state a claim upon which relief can be granted.
II. Background
In today's rapidly developing age of computer technology, personal computers enable users to create an unlimited number of interactive applications. These applications range from simple programs allowing users to view information or images to more complex programs designed to send or receive information. Users of personal computers cannot access the majority of applications without assistance, however, because substantial investments in time and money make such an option impractical. The Internet provides a powerful alternative and solution to this problem through the creation of a world-wide network of computers that facilitates the exchange of applications. By virtue of interconnecting computers, users are able to access all applications on the network without having to purchase separately each application.
To develop this new technology many efforts were made to organize efficiently these applications on the Internet. First, a uniform protocol called the World Wide Web (the "Web") assigned each application an address by which a user could easily identify it. On the Web, these interactive applications are commonly referred to as "websites."4 Second, because users cannot know all of the millions of different types of websites and their specific addresses, search engines were created for the purpose of locating desired websites. For the most part, users engage the search engine by entering relevant terms that describe the desired websites. The search engine subsequently retrieves and displays a list of websites containing the relevant terms. From the list the user can directly connect or "hyperlink" to a listed website.5 The last segment of this emerging technology consists of graphical interfaces ("web browsers"), which allow users to perform numerous operations on the Internet without typing computer commands. Web browsers, similar to other operating systems such as Windows 95®, permit users to perform tasks by selecting a visually displayed option rather than directly typing out commands to perform the desired tasks.
As with other developing technologies companies have developed ways to profit off the Internet. For most users they become part of the network of computers by paying a monthly fee to an Internet service provider such as America Online®. Other companies have profited off the Internet by targeting different areas. Netscape6 for instance sells popular versions of web browsers to users directly or through licensing agreements to network providers. Most commonly, companies profit from the Internet by providing specialized interactive services on their websites. One type of specialized service on a website is a search engine service. Normally, such specialized services do not directly generate revenue from the Internet user but rather by selling advertising space on the websites to other businesses.
The controversy in the case before this court involves the activities of companies who provide national Yellow Pages services through their websites on the Internet ("Internet Yellow Pages"). Because Internet Yellow Pages services are accessed electronically through the Internet and not through large printed volumes, an Internet user in any part of the United States can conveniently access information about a business regardless of where the business is located. Internet Yellow Pages services allow users to "hyperlink" directly from a published business listing or advertisement on the Internet Yellow Pages to the business's direct website. At the website, the user may obtain additional information or even purchase goods or services directly over the Internet. This type of transaction is commonly referred to as "electronic commerce." Although more expansive than printed Yellow Pages, providers of Internet Yellow Pages similarly earn revenue by selling advertisement space to businesses. Therefore, profitability for Internet Yellow Pages services largely depends on how many Internet users are accessing these website services.
To access an Internet Yellow Pages service on the Internet users are offered a variety of mechanisms. A common mechanism is through predetermined options on web browsers. Web browsers such as Netscape provide a visually displayed toolbar having options that provide a list of links to connect to popular and commonly visited websites such as Internet Yellow Pages websites. Specifically, by accessing the "Yellow Pages" option through Netscape's toolbar, a user is linked or connected to Internet Yellow Pages services designated by Netscape. Another common mechanism is through links on well known and popular websites such as search engine websites. For example, popular search engine websites such as Four11 and WhoWhere similarly have a "Yellow Pages" option to link directly or connect to a group of pre-selected Internet Yellow Pages services. Finally, assuming a user knows the Internet Yellow Pages' specific address, a user may access the website by inputting the website's specific address into a web browser such as Netscape. For example, a user can access GTE's SuperPages website by inputting its unique address "http://superpages.gte.net" into Netscape to access the website.
On or about July 1997, GTE alleges the five RBOCs entered into a conspiracy to capture, control, and dominate the Internet Yellow Pages market. Specifically, GTE alleges the five RBOCs held a number meetings in Colorado, Michigan, Georgia, and California to devise the conspiracy. (Compl. ¶ 47.) As a result of these alleged meetings, the five RBOCs agreed to provide jointly a coded Internet Yellow Pages map of the United States (the "MAP"), which allows users to access particular states and businesses within its borders through the designated Internet Yellow Pages service. (Id. ¶ 53); see Figure 1 below. Each of the five RBOCs allegedly is the...
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