Update May 2010: The court has held that the plaintiffs more detailed amended complaint property alleges a conspiracy. The amended complaint alleges that the defendants used the Wireless Internet Caucus to facilitate price fixing agreements with respect to text messages, including specific dates and executives who attended the meetings. Although the defendants argued that the new allegations did not directly show that a price fixing agreement took place, the court held that the plaintiffs are not required to prove their case at the pleading stage.
In In re: Text Messaging Antitrust Litigation, Northern District of Illinois Judge Matthew F. Kennelly has dismissed a proposed class action against Verizon Wireless LLC, AT&T Mobility LLC, Sprint Nextel Corp., and T-Mobile USA Inc., accusing them of conspiring to fix prices for text messaging. In their suit, plaintiffs alleged that the defendants conspired to increase the prices of single text messages as the cost to transmit these text messages decreased. The court held that the lockstep price increases for individual text messages are more likely the result of individual decision-making in the best interest of the companies than a price-fixing conspiracy. Furthermore, the court rejected plaintiffs’ argument that the carriers’ capacity to send text messages exceeded demand during the relevant period and that price increases in a time of excess capacity support an inference of conspiracy, holding that the consumers’ primary mode for realizing lower prices for text messaging is to purchase bulk packages and not to obtain lower price per text message, and plaintiffs did not allege any price conspiracy with regard to bulk packages.