Antitrust Law Daily Wrap Up, ANTITRUST—9th Cir.: Dismissal of coin grading service’s restraint of trade, tying, and monopolization claims against eBay upheld, (Mar 18, 2014)

By Linda O’Brien, J.D., LL.M.

A coin grading service’s restraint of trade, tying, and monopolization claims against an online auction and shopping website provider in relation to the online coin sales and coin grading markets were properly dismissed, the U.S. Court of Appeals in San Francisco has ruled (Universal Grading Service v. eBay, Inc., March 17, 2014, Per Curiam).

Universal Grading Services (UGS), a coin grading business, filed suit against eBay, alleging that the company (1) conspired with organizations related to the coin grading and coin sales industries to restrain trade; (2) unlawfully tied the provision of a platform for online auction of certified coins to the provision of coin grading services; and (3) maintained or attempted to acquire a monopoly of the coin sales market in violation of Sections 1 and 2 of the Sherman Act. A district court granted eBay’s motion to dismiss UGS’s claims and UGS appealed.

Restraint of trade. The court found that UGS failed to plead sufficient facts to show a plausible claim that there was an illegal agreement to restrain trade or the potential for significant anti-competitive effects in the coin sales and grading markets. To establish liability under the Sherman Act, the plaintiff must establish that the defendant was party to an agreement that was intended to harm or unreasonably restrain competition and the agreement actually caused injury to competition. UGS failed to allege that the number of certified coins sold on eBay was more than de minimis in comparison to the sales of coins that were not certified. Moreover, eBay presented a valid business justification for its policy.

Tying arrangement. UGS also failed to state a plausible tying claim. In rejecting UGS’ argument that eBay tied the sale of certified coins to the sale of coin grading services, the court noted that UGS did not allege that eBay sells either certified coins or coin grading services.

Monopolization. Finally, UGS monopolization claims were properly dismissed. To state a claim for monopolization, the plaintiff must prove possession of monopoly power in the relevant market, willful acquisition or maintenance of that power, and causal antitrust injury. The only market in which eBay was alleged to have a monopoly was the market for the provision of online auction services; however, this was not a relevant market in which UGS was a competitor. Additionally, UGS did not allege any antitrust injury in this market or allege facts that eBay had or intended to acquire a monopoly in the online coin sales or coin grading markets, the court concluded.

The case is No. 12-15294.

Attorneys: Marina Trubitsky (Law Offices of Marina Trubitsky, P.C.) for Universal Grading Service. John Charles Dwyer (Cooley LLP) for eBay, Inc.

Companies: Universal Grading Service; Ebay, Inc.; American Numismatic Association; Professional Numismatists Guild, Inc.

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