DOJ appealed a federal judge's ruling that rejected its antitrust complaint and cleared AT&T to take over Time Warner. DOJ filed a brief notice with the U.S. Court of Appeals for the D.C. Circuit Thursday in USA v. AT&T (No. 1:17-cv-02511-RJL) that it's appealing the June 12 final judgment entered by U.S. District Judge Richard Leon (see 1806120002 and 1806120060). The department sued the companies in November to block the deal, alleging the combined company would be too big an anti-competitive risk to rival video distributors. AT&T General Counsel David McAtee said in a statement: “The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances. We are ready to defend the Court’s decision at the D.C. Circuit.” AT&T/TW "is a bad deal for consumers and competition," said John Bergmayer, Public Knowledge senior counsel. "Since it has gone forward, AT&T has already raised prices for its DirecTV Now video service, more than doubled the mysterious ‘administrative fee’ it tacks on to most of its wireless bills, and raised the price of some of its wireless plans while removing the HBO subscription that it had previously included. Judge Leon’s decision contained numerous errors, and we believe the DOJ’s position should be vindicated.”

Yelp can't be forced to remove critical third-party reviews, the California Supreme Court ruled 4-3 Monday, reversing a prior Court of Appeals decision. The case stems from a 2014 lawsuit from attorney Dawn Hassell, who claimed her former client, Ava Bird, defamed her through two negative Yelp reviews. Because Bird didn't show up for court proceedings, Hassell won, and the company was ordered to remove the posts. The Court of Appeals agreed. The state high court said that court “adopted too narrow a construction of” Section 230 of the Communications Decency Act, and setting such a precedent “could interfere with and undermine the viability of an online platform.” The lower court improperly treated Yelp as “the publisher or speaker of . . . information provided by another information content provider,” the majority opinion said. Yelp Deputy General Counsel Aaron Schur wrote that the suit “threatened the rights of online platforms that allow people to freely share their thoughts and the billions of people that do" that. "We are disappointed in the Court’s plurality opinion, which construes the reach of the Communications Decency Act beyond its intended scope and stands as an invitation to spread falsehoods on the internet without consequence," Hassell's attorney Monique Olivier emailed, saying her client is considering all legal options, including review by the Supreme Court.

Sony Mobile Communications smartwatches and “smart bands” that use Google’s Wear OS platform violate a U.S. patent in the way they communicate with other devices, alleged a complaint (in Pacer) filed Sunday in U.S. District Court in Wilmington, Delaware. Beck Branch, a Plano, Texas, limited liability company, owns a March 2005 patent (No. 6,873,620) that describes a communication server acting as a gateway for the transmission of messages between two virtual devices communicating with networks implementing different protocols. The complaint against Sony was one of six actions Beck Branch filed Sunday in the same court alleging infringement of the same patent. Other defendants and their allegedly infringing products or services: (1) Blue Jeans Network (in Pacer), which operates a cloud-based platform for internet-protocol-based communication; (2) Polycom (in Pacer), which markets a unified communications software platform for open standards-based communication, including session initiation protocol (SIP); (3) Motorola Mobility (in Pacer), for its Wear OS smartwatches and fitness bands; (4) Unify (in Pacer), which markets OpenScape as a hybrid unified communications platforms for IP-based communication, including SIP-based communication; (5) Vonage (in Pacer), marketer of unified communications services based on cloud public branch exchange protocol. Defendants didn’t comment Monday.

The Supreme Court won't consider an appeal by Dish Network designated entities SNR Wireless and Northstar Wireless about FCC handling of the AWS-3 auction bidding credits, the court said Monday. The DEs' petition for writ of certiorari was distributed last week. The cert petition was seen facing steep odds (see 1801290033). Dish and the DEs have made several changes to Dish's control of the them after the U.S. Court of Appeals for the D.C. Circuit last year upheld the FCC withholding the DEs' AWS-3 auction bidding credits due to their too-close connections to Dish (see 1806080063). Dish and the FCC didn't comment Monday.

Some experts and advocacy groups criticized the Supreme Court's 5-4 Ohio v. American Express issued Monday as having significant implications for tech firms in two-sided markets. The dissent by Justice Stephen Breyer raised the idea of the opinion treating internet retailers differently from other businesses in antitrust evaluations. It's "an enormous setback for consumers who rely upon the antitrust laws to promote market competition," Public Knowledge said, "a particularly dangerous setback that will open the door for communications and internet platforms to continue building dominant market positions virtually impenetrable to innovation from smaller competitors." The decision was "a HUGE victory for platform providers who can now escape antitrust liability" by claiming -- and not proving -- even a fraction of overages on one side of the two-sided market went to customers on the other side, tweeted economist Hal Singer. Open Markets Institute called the decision "a huge and intellectually unjustifiable obstacle to effective antitrust enforcement." OMI said special treatment of two-sided markets "greatly rais[es] the burden that plaintiffs must carry at the very earliest stages of litigation" and gives more power to monopolies. OMI said it argued in its amicus brief that federal law traditionally looked at both credit card companies and communications firms as intermediaries, but the decision makes tech platforms into "de facto regulators of these markets." OMI said DOJ and the FTC should "use their full legal authorities" to "limit the damage from this poorly reasoned decision" and Congress should "take immediate action." Others defended the decision. The court was "exactly right" when it said plaintiffs didn't meet the burden of proof when they focused on the fees paid by merchants, tweeted International Center for Law & Economics Executive Director Geoffrey Manne. "Gov’t can’t meet its burden by showing 'some' effect on 'some part' of the market. Output didn’t go down and price didn’t go up. If it were pointing to a real effect, they would have." The U.S. and states sued AmEx for contractual provisions with merchants stopping them from steering consumers from using their credit cards in favor of another that charges lower merchant fees. Justice Clarence Thomas wrote the majority opinion holding anti-steering provisions don't violate the Sherman Act.

The U.S. Solicitor General and the FCC asked the Supreme Court not to hear a complaint by Dish Network designated entities SNR Wireless and Northstar Wireless about how the FCC handled AWS-3 auction bidding credits. The DEs filed a petition in January with the Supreme Court seeking writ of certiorari and appealing the U.S. Court of Appeals for the D.C. Circuit's August ruling that upheld the FCC withholding credits because of the DEs’ close ties to Dish (see 1708290012). The D.C. Circuit “correctly upheld the FCC’s determination that petitioners were ineligible for very-small-business bidding credits -- available to businesses with less than $15 million in annual revenues -- because they are affiliates of, and subject to de facto control by, a Fortune 250 company with $13 billion in revenue that is attributable to petitioners under FCC rules,” said the federal brief. “Petitioners do not directly challenge the court of appeals’ conclusion that the FCC reasonably applied its relevant regulations and precedents, nor do they suggest that this holding conflicts with any decision of this Court or another court of appeals. Instead, they challenge … the court of appeals’ finding that petitioners had fair notice of how the FCC would apply those regulations and precedents to the circumstances of this case. That contention lacks merit.” The brief was filed in Supreme Court docket No. 17-1058.

Four models of Apple MacBooks marketed since 2015 have keyboards with “butterfly mechanisms” that leave them “unshielded from contaminants” like airborne dust and makes them prone to “failures,” alleged a complaint (in Pacer) filed Thursday in U.S. District Court in San Jose, California. The keyboard defects are “recurrent,” and “arise through no fault of the user,” rendering the MacBooks “unsuited for their ordinary use of retrieving and inputting data,” said the complaint, which seeks class-action status and alleges Apple violated 11 federal and California consumer-fraud laws. When consumers complain to Apple while the MacBook is still under its one-year warranty, Apple’s solution is to replace the keyboard with an “equally defective” one, said the complaint. When the laptop no longer is under warranty, Apple charges $700 for a replacement keyboard, “which is a temporary fix at best,” it said. The defective keyboards require consumers “to pay for repeated temporary fixes or extended warranties, which Apple knew or should have known are not permanent solutions,” it said. Apple didn’t comment.

The Supreme Court agreed to hear an Apple appeal in a class-action antitrust lawsuit alleging it monopolized distribution of App Store applications in Apple v. Robert Pepper, et al., docket 17-204. Justices granted an Apple cert petition asking them to review a 9th U.S. Circuit Court of Appeals ruling that the suit could proceed, said the high court's order list Monday. A district court dismissed the suit under a 1977 Illinois Brick Co. v. Illinois precedent "holding that consumer plaintiffs alleging monopolization of distribution services Apple provides to app developers were necessarily seeking pass-through damages," said the petition. "The Ninth Circuit reversed, holding -- in an acknowledged split with the Eighth Circuit -- that consumers can sue whoever delivers goods to them, even if they seek pass-through damages. The question presented is: Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense." The solicitor general in May asked the court to grant Apple's petition, arguing the 9th Circuit misapplied the Illinois Brick rule, which prevents indirect purchasers from seeking certain antitrust damages passed on by third parties -- in this case the developers (see 1805090051). Apple argues only the developers, not consumers, can sue in this case. The Supreme Court granted motions of ACT|The App Association and the Washington Legal Foundation to file amicus briefs. The court denied cert to wireless customer petitioners who argued "non-negotiable arbitration" clauses that waive their right to sue providers were "worthy of some constitutional introspection" under the First Amendment, in Marcus A. Roberts, et al. v. AT&T Mobility, docket 17-1287.

Dish Network and designated entities Northstar Wireless and SNR Wireless further amended their business arrangements to try to fix problematic Dish de facto control issues, the satellite-TV company said in an SEC filing Friday. The amendments come atop other amendments made in April (see 1804040004). Dish said the latest amended Northstar and SNR agreements give the designated entities, among other things, the right to sell their right in their spectrum without consent of a Dish subsidiary anytime after Oct. 27, 2020 -- five years earlier than the previous agreements -- and to remove Dish subsidiaries' rights of first refusal with respect to sale of any AWS-3 licenses. Separately, the MVPD disclosed in an FCC filing earlier that day that representatives, including Chairman Charlie Ergen, had meetings with Chairman Ajit Pai and Commissioner Mike O’Rielly on its wireless and IoT network plans. The company "has been negotiating definitive master supply agreements for" radios, chipsets and other things, it said in docket 17-183.

In Fitbit’s motion to dismiss fraud allegations that its PurePulse heart-monitoring technology is grossly inaccurate, Fitbit raised a “variety” of objections “to the plausibility of the fraud and deception claims” against the company, “none of which are well taken,” said U.S. District Judge James Donato in San Francisco in a Tuesday order (in Pacer) denying the motion. Donato didn’t buy Fitbit’s arguments that its marketing slogans attesting to the accuracy of PurePulse are “inactionable puffery,” he said. The January 2016 class-action complaint (see 1601150046) is “replete with examples” of “actionable” phrases that misstate the product’s specific characteristics, said the judge. Though Fitbit argues its promotional slogans have nothing to do with accuracy, that “cannot be reconciled with the plain meaning of its own marketing words,” said Donato. The complaint “adequately alleges that Fitbit made an express warranty about the ability of PurePulse devices to accurately track heart rate throughout the day and during exercise,” he said. The complaint also argues “the ability to record heart rate in real time and during physical activity is marketed as a key feature of the PurePulse devices, yet in reality the products frequently fail to record any heart rate at all or provide highly inaccurate readings,” he said. “Those facts indicate that the devices lack even a basic degree of fitness for use as exercise or activity monitors.” Fitbit didn’t comment Wednesday. Plaintiffs are “pleased” Donato “recognized the strength of our claim that Fitbit misled consumers when it marketed its Fitbit trackers as being able to continuously and accurately measure heart rate during exercise,” said attorney Jonathan Selbin. “As independent test after test has shown, these devices are wildly inaccurate and cannot be relied upon to monitor heart rate during exercise reliably and safely.”