Text Messaging Case to Move Forward

The Seventh Circuit in an interlocutory appeal written by Judge Richard Posner upheld the district judges decision in a multi-district litigation to allow an antitrust claim to move forward.  The claim alleges a conspiracy among the largest cell phone providers to restrain competition with respect to text messages.  Although the complaint did not allege direct smoking gun evidence of a conspiracy, the court held that circumstantial evidence can be sufficient.  The plaintiffs’ second amended complaint alleged the cell phone companies exchanged price information at trade association meetings where they met in a leadership council.  The council  within  urged its members to substitute “coopetition” for competition, plaintiffs allege.  The complaint also alleged that each defendant increased price despite falling costs and each moved from a unique complex pricing structure to a uniform one that increased prices by a third.  According to plaintiffs, the defendants all charge 20 cents per single text message, a price that is almost all profit because there is virtually no cost for the cell phone companies to transmit the messages.

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