IN RE WIRELESS TELEPHONE SERVICES ANTITRUST LITIGATION. This Document Applies To: ALL ACTIONS MASTER FILE 02 Civ. 2637 (DLC) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK    2003 U.S. Dist. LEXIS 13886 August 12, 2003, Decided August 12, 2003, Filed OPINION:    OPINION & ORDER DENISE COTE, District Judge:    Plaintiffs bring this antitrust class action against the five families of companies that provide nationwide wireless telephone service. Plaintiffs contend that each defendant's power in the market for wireless telephone services has anticompetitive effects in the separate but related market for wireless telephones. In particular, plaintiffs allege each defendant's practice of requiring customers to purchase its authorized handsets in order to subscribe to the defendant's wireless telephone services is an unlawful tying arrangement in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs also claim that each defendant unlawfully monopolizes the market for handsets that are compatible with its wireless services in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. This Opinion addresses the defendants' joint motion to dismiss the amended class action complaint filed January 9, 2003 ("Complaint ") pursuant to Rule 12(b)(6), Fed. R. Civ. P. n1 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -    n1 Four other class actions asserting similar claims against substantially the same defendants were transferred to this Court by the Judicial Panel on Multi-District Litigation ("MDL Panel") by Order dated March 12, 2003 for pre-trial consolidation or coordination with the action filed in the Southern District of New York. By Order of this Court dated August 11, 2003, the five related cases were consolidated, and the amended complaint filed in Brook et al. v. AT&T Wireless et al., 2003 U.S. Dist. LEXIS 13796, No. 02 Civ. 2637 (S.D.N.Y. Aug. 11, 2003), was designated the consolidated complaint for all five actions. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -    Background    The following description reflects the allegations in the Complaint relevant to the motion to dismiss. Plaintiffs    Plaintiffs bring this action on behalf of themselves and other persons who have purchased cellular or Personal Communications Services ("PCS") telephone products from the defendants from 1998 to the present. The PCS and cellular networks at issue are similar in terms of geographic organization and radio technology, but PCS systems use digital rather than analog technology. Together, the PCS and cellular systems are referred to as "wireless" systems. Defendants    The defendants are identified as the entities that comprise the five major carriers of wireless telephone services: AT&T, Sprint, Verizon, Voicestream, and Cingular. The defendants are (1) AT&T Cellular Services, Inc., Cellular Telephone Company d/b/a AT&T Wireless Services (together "AT&T"); (2) Sprint Spectrum L.P. and Wirelessco L.P. (together "Sprint"); (3) New York SMSA Limited Partnership d/b/a Verizon Wireless and Cellco Partnership d/b/a Verizon Wireless (together "Verizon"); (4) Voicestream Wireless Corporation, Omnipoint NY MTA License, LLC, Omnipoint New York D License, LLC, and Omnipoint Facilities Spectrum 2 LLC (together "Voicestream"); and (5) Cingular Wireless LLC and Pacific Telesis Mobile Services LLC (together "Cingular" and together with AT&T, Sprint, Verizon and Voicestream, "Defendants"). Each Defendant offers wireless telephone service on a nationwide system of integrated service areas and through a portfolio of licenses for the radio spectra on which wireless calls are carried. Wireless Telephone Services    The Federal Communications Commission ("FCC") regulates the spectra of radio signals on which wireless telephone calls are transmitted. In 1981, when the cellular telephone industry was in its infancy, the FCC allocated a limited amount of spectrum for cellular telephone service. Licenses for the spectrum were initially divided evenly between independent entities and the affiliates of the local telephone company in each geographic market identified by the FCC. As the demand for wireless telephone services has grown, the FCC has increased substantially the amount of spectrum it licenses. In 1994, the FCC allocated spectrum to broadband PCS and licensed use of the spectrum either through auctions or by awards to "pioneers" in PCS technology.    Each of the Defendants controls an extensive portfolio of spectrum licences, which enables it to offer nationwide (or nearly nationwide) wireless service. Because all or nearly all spectrum licenses have been auctioned or assigned, it is not possible for any new carrier to enter the market for nationwide wireless services. Handsets    In order to take advantage of the wireless calling networks, consumers must, of course, use a wireless telephone. No longer mere "cell phones," wireless telephones -- or, as they are referred to by plaintiffs, "handsets" -- perform functions and operate with technology similar to that of a personal computer. From the early to mid-1990s, dozens of handset manufacturers sold scores of brands to consumers. Now, however, only the ten handset manufacturers favored by one or more of the Defendants compete in the handset market. None of those handset manufacturers sells directly to consumers: they do not have retail stores in the United States, nor do they sell equipment directly to consumers over the internet. Instead, the manufacturers sell handsets in bulk to the carriers, and, in a few cases, to large retail sales agents of the carriers. Exclusionary Conduct    The Defendants engage in a number of practices that are designed to link the sale of handsets and wireless services and that have anticompetitive effects in the market for handsets. First, all of the Defendants bundle handsets together with their subscription services. Each of the Defendants purchases handsets from a number of equipment manufacturers and resells the handsets to consumers. The Defendants require consumers (or subscribers) to purchase one of their selected handsets in order to subscribe to and receive service on their wireless networks. Second, each of the Defendants restricts its authorized sales agents' marketing of handsets, including by placing detailed restrictions on in-store marketing. Third, the Defendants program and "lock" the handsets offered for sale for use on their networks in order to prevent purchasers from using the handsets on other wireless networks. The Defendants use different mechanisms of varying complexity to prevent handsets from receiving service from other wireless carriers. In order to use any given Defendant's wireless service, a consumer must have a handset that has been programmed by that Defendant to work on its network. Some of the locking codes can be reprogrammed to free the handset for use on another carrier's network. Fourth, the Defendants are all members of industry standard-setting bodies which set standards for handsets and certify that the handsets meet the standards. The specifications require handsets to be capable of being locked and programmed by wireless service carriers.    As a result of the Defendants' restrictive practices, subscribers to wireless services must purchase handsets from the same carrier that provides the wireless service to which they intend to subscribe. Consumers cannot purchase handsets from handset manufacturers and then choose among wireless service providers: they must select the service and the handset as a package.    The Defendants' bundling practices deter manufacturers from entering the handset market. Since the mid-1990s, dozens of handset manufacturers have left the handset market. By limiting competition among manufacturers of handsets, the Defendants have deterred the development of important handset technologies such as the ability to access the strongest signal available when making an emergency call, and the ability to use the same handset to access multiple types of digital signaling protocols. Defendants have made switching carriers less appealing by impeding the development of technology that would enable consumers to use the same wireless telephone number after switching to a new handset or carrier.    The bundling of handsets with wireless service has also artificially inflated the market price for both wireless service and wireless handsets because Defendants impose a high cost on the decision to switch wireless carriers. Evidence of this artificial price inflation can be found in an examination of the fluctuation in the price of wireless services. In 1990, the average monthly subscription charge for wireless service was $ 81, in 1998 it was $ 40, and by 2000 it had increased to $ 45. Although the difference between the cost per month in 1998 and in 2000 is a mere five dollars, the price should have fallen, not increased during that period because it was a time when the industry shifted to the more efficient digital networks, additional carriers entered the market, and the number of subscribers increased. In addition, linking the sale of wireless services and handsets prevents consumers from determining the real cost of each separate product. Legal Standards Rule 8    The Federal Rules of Civil Procedure require that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2), Fed. R. Civ. P.; see Todd v. Exxon Corp., 275 F.3d 191, 198 (2d Cir. 2001). Pleadings are to give "fair notice" of a claim in order to enable the opposing party to answer and prepare for trial, and to identify the nature of the case. Simmons v. Abruzzo, 49 F.3d 83, 86 (2d Cir. 1995); Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir. 1988). "Rule 8(a)'s simplified pleading standard applies to all civil actions, with limited exceptions." Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 513, 152 L. Ed. 2d 1, 122 S. Ct. 992 (2002). There is no heightened pleading standard in antitrust cases. See Todd, 275 F.3d at 198. Rule 12(b)(6)    To dismiss an action pursuant to Rule 12(b)(6), a court must determine that "it appears beyond doubt, even when the complaint is liberally construed, that the plaintiff can prove no set of facts which would entitle him to relief." Jaghory v. New York State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997) (citation omitted); see also Desiano v. Warner-Lambert Co., 326 F.3d 339, 347 (2d Cir. 2003). In construing the complaint, the court must "accept all factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff." Jaghory, 131 F.3d at 329. "Given the Federal Rules' simplified standard for pleading, a court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Swierkiewicz, 534 U.S. at 514 (citation omitted). In antitrust cases in particular, the Supreme Court has stated that dismissals prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly. It is nonetheless improper to assume that the plaintiff can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged. Todd, 275 F.3d at 198 (citation omitted). I. Tying    Count I alleges that the Defendants violated Section 1 of the Sherman Act, 15 U.S.C. § 1 ("Section 1"), by selling wireless services and handsets as a tied bundle. Section 1 declares "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade" illegal. 15 U.S.C. § 1 .    Tying claims allege an unlawful restraint of trade in the form of a seller's attempt to condition or "tie" the sale of its products or services to the consumer's purchase of a different product, which is called the "tied" product. "The essential characteristic of an invalid tying arrangement lies in the seller 's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms." Hack v. President and Fellows of Yale College, 237 F.3d 81, 85 (2d Cir. 2000) (citing Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12, 80 L. Ed. 2d 2, 104 S. Ct. 1551 (1984)); see also DeJesus v. Sears, Roebuck & Co., 87 F.3d 65, 70 (2d Cir. 1996). When a consumer is forced to purchase the tied product when the consumer would not do so in a competitive market, a tying arrangement is unlawful. See Jefferson Parish, 466 U.S. at 13-14. In essence, a seller may not use its market power in one market "to impair competition on the merits in another market." Id. at 14. The consumer is injured when her freedom to select the best bargain is impaired by her need to purchase the tying product. Id. at 15. She may also be injured when she is unable to evaluate the true cost of either product when they are only available as a package. Id.    The Second Circuit has required allegations of five specific elements to state an unlawful tying claim: First, a tying and a tied product; second, evidence of actual coercion by the seller that forced the buyer to accept the tied product; third, sufficient economic power in the tying product market to coerce purchaser acceptance of the tied product; fourth, anticompetitive effects in the tied market; and fifth, the involvement of a "not insubstantial" amount of interstate commerce in the "tied" market. Hack, 237 F.3d at 86 (citation omitted). As explained below, plaintiffs who allege a per se violation need not allege facts addressed to the fourth element.    The first element of a tying claim requires plaintiffs to allege the existence of two distinct products. For the products to be distinct, as, for example, in the case of service and parts, "there must be sufficient consumer demand so that it is efficient for a firm to provide service separately from parts." Eastman Kodak Co. v. Image Technical Servs., 504 U.S. 451, 462, 119 L. Ed. 2d 265, 112 S. Ct. 2072 (1992) (citation omitted). A functional connection between products does not necessarily render them indistinguishable. The Supreme Court has "often found arrangements involving functionally linked products at least one of which is useless without the other to be prohibited tying devices." Id. at 463 (citation omitted).    The third element -- market power in the tying product market -- requires plaintiffs to allege that a defendant had "the power to force a purchaser to do something that he would not do in a competitive market." Id. at 464 (citation omitted). Market power is "the ability of a single seller to raise price and restrict output." Id. (citation omitted). When a seller commands a "predominant share" of the market, it is inferred that the seller has market power. Id. Factors such as "the size and profitability of the firm seeking to impose the tie, the character of the tying product, and the effects of the tie . . ." can be used to determine whether a tie is an exercise of market power. Jefferson Parish, 466 U.S. at 37 n.6 (O'Connor, J., concurring).    Defining the relevant market for an antitrust claim is a "deeply fact-intensive inquiry." Todd, 275 F.3d at 199. "To survive a Rule 12(b)(6) motion to dismiss, an alleged product market must bear a rational relation to the methodology courts prescribe to define a market for antitrust purposes -- analysis of the interchangeability of use or the cross-elasticity of demand, and it must be plausible." Id. at 200 (citation omitted). Cross-elasticity of demand exists where a "slight increase" in the price of one product will prompt consumers to switch to another product. Id. at 201-02. Dismissal may be appropriate where a product market is defined as a single brand or in the absence of a plausible explanation for why the market should be limited as it has been in the complaint. Id. at 200.    A tying arrangement may be condemned as illegal per se -- that is, without inquiry into actual market conditions in the tied market (the fourth element) -- only "if the existence of forcing is probable." Jefferson Parish, 466 U.S. at 15. There must "be a substantial potential for impact on competition in the tied market in order to justify per se condemnation of an alleged tying arrangement." Gonzalez v. St. Margaret's House Hous. Dev. Fund Corp., 880 F.2d 1514, 1518 (2d Cir. 1989). Examples of situations in which a per se violation may be found include those in which a seller has a patent or similar monopoly over a product, where its market share is high, or where it offers a unique product that "competitors are not able to offer." Jefferson Parish, 466 U.S. at 16-17.    If plaintiffs are unable to allege the substantial market power necessary to state a per se tying claim, they may nonetheless prevail under a "rule of reason " theory. Instead of alleging that a seller so dominates the tying market that coercion in the tied market should be presumed, the rule of reason allows a plaintiff to pursue a tying claim against a defendant with a less than dominant share of the market if the defendant's "challenged action had an adverse effect on competition as a whole in the relevant market." Wal-mart Stores, Inc. v. Visa USA Inc. (In re Visa Check/MasterMoney Antitrust Litig.), 280 F.3d 124, 134 n.5 (2d Cir. 2001); see also Todd, 275 F.3d at 206.    The concurring opinion by four Justices in Jefferson Parish describes three threshold criteria to show an illegal tying arrangement under the rule of reason test. First, the defendant "must have power in the tying-product market." Jefferson Parish, 466 U.S. at 37 (O'Connor, J., concurring). How much market power is necessary is not yet resolved, see id. at n.6, but "absent such power tying cannot conceivably have any adverse impact in the tied-product market, and can be only pro-competitive in the tying-product market." Id. at 37. "Second, there must be a substantial threat that the tying seller will acquire market power in the tied-product market. No such threat exists if the tied-product market is occupied by many stable sellers who are not likely to be driven out by the tying, or if entry barriers in the tied product market are low." Id. at 38. Where the tying arrangement "is likely to erect significant barriers to entry into the tied-product market, the tie remains suspect." Id. at 39. Finally, "there must be a coherent economic basis for treating the tying and tied products as distinct." Id. Even when there is a separate use for the tied product, the products should be viewed as one "when the economic advantages of joint packaging are substantial." Id. at 40. Where these threshold criteria are met, the economic benefits and harms are weighed under a rule of reason. Id. at 41. Ultimately, a "tie-in should be condemned only when its anticompetitive impact outweighs its contribution to efficiency." Id. at 42. The impairment of competition in the tied market may be in the form of harm to existing competitors or in barriers to entry of new competitors in the market for the tied product. Jefferson Parish, 466 U.S. at 14.    Finally, in order to bring a private antitrust claim, plaintiffs also must allege antitrust injury, "which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation." Balaklaw v. Lovell, 14 F.3d 793, 797 (2d Cir. 1994) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 50 L. Ed. 2d 701, 97 S. Ct. 690 (1977)).    Count I of the Complaint alleges that each Defendant ties the sale of handsets to the sale of its wireless services in violation of Section 1 of the Sherman Act. The Complaint does not allege, however, that the Defendants have engaged in a conspiracy to tie or to raise handset prices, nor that they have entered into any kind of an agreement with each other regarding bundling or handset pricing. Each Defendant is alleged to have independently violated the Sherman Act by virtue of the tying arrangement of its own services and handsets.    It is undisputed that the Complaint adequately alleges a tying and tied product, and that there is a not insubstantial amount of interstate commerce in the tied market. The motion to dismiss addresses the second, third and fourth elements of a tying claim. The Defendants contend that the plaintiffs have failed to allege that any one of them coerced consumers to buy an unwanted handset, that any one of them had sufficient economic power to coerce a consumer 's acceptance of its handsets, or that any one of them has taken or could take actions that have an anticompetitive effect in the tied market.    With respect to the second element, the Defendants argue that there is no allegation that subscribers purchased an "unwanted" handset, or that they were contractually required to purchase a defendant's handset, and that a tying arrangement does not exist without an allegation that the purchaser has been required to purchase something that she does not want. To the contrary, the Complaint does allege that each of the Defendants forces consumers to purchase its authorized handsets as a condition of receiving the Defendant's wireless service, and that each Defendant's tying arrangement prevents consumers from purchasing handsets directly from handset manufacturers or other carriers. Those allegations are sufficient to satisfy the low threshold of the Rule 8 pleading standard.    Turning to the third element, plaintiffs fail to state a claim for per se unlawful tying. As the Second Circuit has noted, the "essential characteristic" of an unlawful tying arrangement is the seller's exploitation of its dominance in the tying market to force the purchase of the tied product. Hack, 237 F.3d at 85 (citation omitted). No one of the five families of companies named as Defendants is alleged to dominate the wireless service market. To the contrary, the market for nationwide wireless services is alleged to contain at least these five major competitors.    Although plaintiffs have failed to allege the market dominance necessary to state a per se claim, they have alleged that each of the Defendants possesses sufficient market power such that its tying arrangement adversely affects competition in the tied market. This is sufficient under the "rule of reason" doctrine. At the fact-finding stage, a burden-shifting scheme will control the analysis undertaken through the application of the rule of reason. Plaintiffs must prove that "the challenged action had an adverse effect on competition as a whole in the relevant market and, if the defendant shows a pro-competitive redeeming virtue of this action, that the same pro-competitive effect could be achieved through an alternative means that is less restrictive of competition." In re VisaCheck/Mastermoney Antitrust Litig., 280 F.3d at 134 n.5 ; see also Clorox Co. v. Sterling Winthrop, Inc., 117 F.3d 50, 56 (2d Cir. 1997). At the pleading stage, however, Rule 8 governs. Plaintiffs need only make a short, plain statement that gives the Defendants fair notice of the claim that they each possess market power in the national wireless services market and that each Defendant's tying arrangement had an adverse effect on competition in the tied market. Cf. Swierkiewicz, 534 U.S. at 512.    Defendants argue that the intense competition among them (and with others) in the national market for wireless services means, as a matter of law, that no Defendant can exercise control or market power over the handset market. They argue further that their competition within the wireless services market in fact promotes competition in the handset market and makes any allegation that any one of them has or could constrain competition within the handset market implausible. These are issues that must await factual development. It may very well be true that the evidence will show that the bundling of wireless services and handsets has been beneficial to competition in the handset market. Indeed, the Defendants argue that the FCC made such findings in 1992. In the context of this motion, however, the issue is solely the adequacy of the pleadings. The plaintiffs have alleged that each of the five Defendants, through their FCC spectrum licenses, the high cost to consumers of switching to another service, and otherwise, have market power in the wireless services market. Their individual lack of dominant power prevents resort to a per se tying theory, but does not preclude application of a rule of reason analysis. As the concurrence in Jefferson Parish noted, the precise amount of market power necessary to prevail on a rule of reason tying claim remains an open question. Jefferson Parish, 466 U.S. at 37 n.6 (O'Connor, J., concurring). "In Northern Pacific R. Co. v. United States, 356 U.S. 1, 6-8, 11, 2 L. Ed. 2d 545, 78 S. Ct. 514 (1958) , the Court required only a minimal showing of market power." Id. While a plaintiff will have to show the existence of market power in the tying market to prevail, since without market power it would be impossible to exert an anticompetitive impact in the tied product market, at the pleading stage all that is necessary is a plausible allegation of market power in the tying market.    Plaintiffs have also sufficiently alleged an adverse effect on competition. Plaintiffs allege that the fact that new handsets must be marketed through and are programmed and locked by the wireless service carrier presents an "absolute barrier" to entry into the handset market. Plaintiffs have also alleged that although the overall market for wireless products and services has grown substantially, the number of handset manufacturers has shrunk from scores of manufacturers in the mid-1990s to a mere ten or so manufacturers today. Plaintiffs also allege that by requiring handsets to conform to their specific requirements, Defendants' bundling and programming requirements have prevented the development of technology that would allow handsets to access the signals provided by multiple providers of wireless services. Plaintiffs allege that the Defendants' tying arrangements have raised the price of the bundle of service and handset by increasing the cost of switching carriers. Bundling services and handsets also conceals the price of the individual components, and discourages competition among Defendants by discouraging consumers from comparing the prices of each of the two components. As evidence of these anticompetitive effects, plaintiffs allege that the average monthly price of wireless services rose slightly during a time when the price in a competitive market should have fallen.    Defendants contend that plaintiffs' allegations are implausible. They again rely primarily on the argument that plaintiffs' allegations do not make sense from an economic standpoint: since Defendants are the largest purchasers of handsets, and since they compete for customers through both their services and their handset products, each Defendant's continued success depends on its ability to offer the best handsets at the lowest prices. These are factual issues that must await development through discovery.    The Defendants also assert that the anticompetitive effects are alleged to be due to the Defendants' collective action, and not to any individual Defendant's exercise of market power. The Complaint does not allege a conspiracy or agreement among the Defendants, and therefore must allege a violation by each Defendant. It does. While the decision to name the five Defendants together in a single tying claim may complicate the analysis of the adequacy of the pleadings, at trial the plaintiffs will have the burden to show that each Defendant's market power and tying arrangement had an anticompetitive impact on the handset market.    Finally, Defendants place particular reliance on Cancall PCS, LLC v. Omnipoint Corp., 2001 U.S. Dist. LEXIS 3267, No. 99 Civ. 3395 (AGS), 2001 WL 293981 (S.D.N.Y. Mar. 26, 2001). In Cancall, the Honorable Allen G. Schwartz dismissed a similar tying claim. The plaintiffs in Cancall alleged that defendant Omnipoint (a predecessor corporation to one of the Defendants), unlawfully tied the sale of handsets compatible with its wireless network to the sale of airtime on that network. Cancall alleged that the tying arrangement had anticompetitive effects in the market for handsets compatible with the Omnipoint network. 2001 U.S. Dist. LEXIS 3267, [WL] at *4. The court compared Cancall's claims to those in Coniglio v. Highwood Servs. Inc., 495 F.2d 1286 (2d Cir. 1974), and found that, as in Coniglio , the defendant had not limited competition in the market for the tied product because there were no actual or potential competitors in the tied market due to defendant's monopoly of that market. Cancall, 2001 U.S. Dist. LEXIS 3267, 2001 WL 293981, at *5. The court explained that "Cancall's own allegations demonstrate that Omnipoint's alleged tie did not foreclose any handset sales by any other entity." Id.    Although the facts -- and indeed one of the parties -- in Cancall are similar to those presented here, one crucial difference remains. Plaintiffs in this action have alleged that Defendants' tying arrangements have restrained competition in the handset market, specifically, that the tying arrangements have driven numerous handset manufacturers from the market, have deterred entry into the handset market, and have had deleterious effects on the development of handset technology.    Applying the Rule 8 standard, plaintiffs have stated a claim for unlawful tying. Whether or not each Defendant has sufficient market power, whether the bundling arrangement has redeeming procompetitive effects or has been found by the FCC to have such effects, and whether handset manufacturers have been excluded from the market by a Defendant, are matters to be addressed at a later stage of the litigation. Motions to dismiss antitrust actions should be granted "very sparingly," see Todd, 275 F.3d at 198, and Rule 8 requires only that plaintiffs provide "fair notice" of a plausible claim. Given these parameters, plaintiffs' tying arrangement allegations are sufficient to survive the motion to dismiss. Monopoly    To state a claim for monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2, a plaintiff must allege "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." Pepsico, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1996)) (summary judgment decision); see also Clorox Co., 117 F.3d at 61.    A monopolization claim generally requires a definition of the relevant product and geographic market. Pepsico, 315 F.3d at 108. The relevant product market "consists of products that have reasonable interchangeability for the purposes for which they are produced -- price, use and qualities considered. " Id. at 105 (quoting United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404, 100 L. Ed. 1264, 76 S. Ct. 994 (1956)). Products that consumers treat as acceptable substitutes are considered to be "reasonably interchangeable." Pepsico, 315 F.3d at 105.    "The core element of a monopolization claim is market power, which is defined as the ability to raise price by restricting output." Id. at 107 (citation omitted). To prove a monopolization claim, plaintiffs may demonstrate market power in one of two ways: either through direct evidence that the defendant can control prices or exclude competition, or through demonstrating defendants' share of the relevant market. Tops Market, Inc. v. Quality Markets, Inc., 142 F.3d 90, 98 (2d Cir. 1998). As the Second Circuit has stated, the key inquiry in addressing a monopoly claim is whether the defendant has engaged in improper conduct that has or is likely to have the effect of controlling prices or excluding competition, thus creating or maintaining market power. In the absence of direct measurements of a defendant's ability to control prices or exclude competition, however, market power necessarily must be determined by reference to the 'area of effective competition' -- which, in turn, is determined by reference to a specific, defined 'product market.'" Pepsico, 315 F.3d at 108 (citation omitted).    Since the definition of the relevant market is a deeply fact intensive inquiry, it is not ordinarily a ground for dismissal of an antitrust claim. Nonetheless, where a pleading's market definition fails to bear a "rational relation to the methodology courts prescribe to define a market for antitrust purposes -- analysis of the interchangeability of use or cross elasticity of demand," dismissal is appropriate. Todd, 275 F.3d at 200 and n.3 (Section 1 Sherman Act claim).    Counts II through VI separately but identically allege that each Defendant unlawfully monopolizes the market for handsets that are compatible with that Defendant's wireless services. Because plaintiffs fail properly to define the relevant market, the monopoly claims are dismissed.    Plaintiffs' own allegations undermine any contention that any one of the Defendants is a monopolist with the power to control prices or stifle competition. To the contrary, plaintiffs allege that the Defendants compete with each other for wireless consumers: they sell handsets at similar prices, through the same or similar channels, to similar numbers of people. These allegations, taken as true, demonstrate that no one Defendant can unilaterally raise prices for handsets, and that each actively competes with the others for customers. The plaintiffs' contention that one Defendant's handsets are incompatible with another Defendant's network is insufficient to overcome this deficiency in pleading a plausible market definition. From a consumer's point of view, when deciding which wireless service plan to purchase, as alleged in the Complaint, each Defendant's service plans (and accompanying handsets) are reasonably interchangeable.    Conclusion    For the reasons stated above, the Defendants' motion to dismiss is denied as to Count I of the Complaint, and granted as to Counts II through VI. SO ORDERED: Dated: New York, New York    August 12, 2003    DENISE COTE    United States District Judge