well as direct mail, billboards, television, newspapers and leaflets. AOL does not do business in these alternative advertising methods. If these additional advertising methods are ultimately found to be reasonably interchangeable with electronic mail and included as part of the relevant product market, AOL would not control a large enough percentage of the relevant product market to justify a finding of monopoly power.
Finally, even if Cyber could prove that AOL exercises monopoly power in a relevant market, there is little likelihood that Cyber will be able to show that AOL willfully acquired that power. On the contrary, AOL has throughout this litigation offered a number of legitimate business justifications for blocking Cyber's e-mail including the numerous complaints it has received from its subscribers, the technical burden the millions of e-mail advertisements cause on AOL's servers and the fact that Cyber does not pay AOL any fee whatsoever to carry Cyber's e-mail.
Even if Cyber could prove AOL is a monopolist in the relevant market, there is little likelihood that Cyber could prove that AOL monopolizes an "essential facility".
"An 'essential facility' is one which is not merely helpful but vital to the claimant's competitive viability." Monarch Entertainment Bureau v. N.J. Highway Authority, 715 F. Supp. 1290, 1300 (D.N.J. 1989) (citing P. Areeda & D. Turner, Antitrust Law, P 736.2b at 680-81 (Supp. 1988), aff'd, 893 F.2d 1331 (3d Cir. 1989). The essential facility Cyber contends that AOL monopolizes is advertising to AOL's own subscribers via electronic mail. We believe there is little likelihood that Cyber will be able to show that the ability to advertise to AOL's subscribers is vital to Cyber's competitive ability.
In the first instance, as mentioned above, AOL has not even completely excluded Cyber from the AOL system. AOL's Preferred Mail simply gives the AOL subscriber the option to choose whether he wishes to view Cyber's e-mail advertisements. In addition, AOL currently has approximately seven million members who constitute no more than one-sixth to one-seventh of the current total e-mail population of 40 to 50 million and approximately one-half of the current total online population of 12 million. Cyber also has many other means of disseminating its advertising to Internet users in general and to AOL subscribers in particular besides electronic mail. Cyber can send its advertisements to the subscribers of the many other online services which compete with AOL, including CompuServe, the Microsoft Network and Prodigy. Cyber can send its advertisements to AOL members over the Internet through the World Wide Web which would allow access by AOL subscribers who want to receive Cyber's advertisements. Cyber, as an advertising agency, can disseminate its advertisements to AOL subscribers and others by non-Internet means including the United States mail, telemarketing, television, cable, newspapers, magazines, billboards and leaflets. And, of course, Cyber could attempt to lure AOL subscribers away from AOL by developing its own commercial online system or advertising web site and charging a competitive rate.
As a result, this case is not like the situation in United States v. Terminal Railroad Association, 224 U.S. 383, 56 L. Ed. 810, 32 S. Ct. 507 (1912) where the defendant railroads jointly owned the only feasible terminal for rail traffic coming to St. Louis from the west or the situation in MCI Communications v. AT & T, 708 F.2d 1081 (7th Cir.) cert. denied, 464 U.S. 891, 78 L. Ed. 2d 226, 104 S. Ct. 234 (1983) where AT&T controlled access to the communications facility essential to operation of its competitor or the situation in Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 738 F.2d 1509 (10th Cir. 1984) where the defendant ski operator controlled three of the four skiing mountains in the Aspen area and defendant refused to market a multi-day multi-mountain ticket with plaintiff leaving plaintiff unable to compete.
Instead, this case is much more similar to Colonial Penn Group v. American Association of Retired Persons, 698 F. Supp. 69 (E.D.Pa. 1988). The defendant in Colonial Penn was a publisher of several magazines targeted to individuals in the over-fifty age group. Plaintiff was a provider of travel services, homeowners and automobile insurance programs also targeted to individuals in the over-fifty age group. After endorsing plaintiff's services for a period of time in its publications, defendant decided to endorse only the services of plaintiff's rivals while at the same time excluding advertisements for plaintiff's services. Plaintiff brought an "essential facilities" claim, contending that advertising in defendant's publications is the only effective means to market its products to persons over the age of fifty in general and to defendant's members in particular. In reviewing plaintiff's definition of the relevant market as advertising access to defendant's members, the same market Cyber has defined here, this Court stated:
Moreover, plaintiff, to show that [defendant] members comprise a discrete market segment, must show distinguishing characteristics of defendant members from the broader population of persons over the age of fifty. Merely defining the relevant market by the readership of defendant publications without further distinction is plainly insufficient and an exercise in circular reasoning; i.e., defining a market merely by a publications's readership begs the question of whether that publication is an essential facility.
Colonial Penn, 698 F. Supp. at 71, n. 1.
Although the Court ultimately denied the defendant's motion to dismiss with leave to renew in the form of a motion for summary judgment after discovery was completed, the reasoning of Colonial Penn is equally applicable to the case sub judice. Merely defining the relevant market as Cyber has done by the subscribership of AOL without further distinguishing AOL's subscribers from the other online subscribers or other Internet e-mail users to whom Cyber provides advertising services is also insufficient as such a definition begs the question of whether the subscribership of AOL is an essential facility. In short, Cyber has failed to show why its advertising to AOL subscribers is any more vital than its advertising to the subscribers of the many other commercial online services or its advertising to other individuals with an Internet e-mail address.
Even if Cyber could prove an essential facility, it is unlikely that it could satisfy the remaining elements of its essential facilities claim. With regard to the second factor--the competitor's inability practically or reasonably to duplicate the essential facility--Cyber has not shown any reason why it could not (other than perhaps because it would have to pay its own way) use its servers to create its own commercial online internet service or advertising web site and attempt to lure away AOL subscribers.
With regard to the third element--denial of the use of the essential facility to a competition--we reiterate that Cyber has not been completely prevented from sending its e-mail advertisements to AOL subscribers. Although the onus is on the AOL subscriber who wants to view Cyber's advertisements to click the "I want junk e-mail!" box on the screen, we do not believe this process is unreasonably burdensome to AOL subscribers.
Finally, Cyber is unlikely to be able to show the feasibility of AOL providing its facility to Cyber without the PreferedMail tool. It is clearly unfeasible for AOL's e-mail servers, which the parties have stipulated have a finite capacity, to be burdened with up to 1.9 million e-mail advertisements each day from a single advertiser such as Cyber. In addition, as we noted in our Memorandum Opinion of November 4, 1996, the Court has received a plethora of letters from disgruntled AOL subscribers who complain of not only having to sift through Cyber's e-mail advertisements in their e-mail boxes but also of having to pay for the time it takes to erase these messages. AOL simply should not have to incur the wrath of its paying customers and resulting damage to its reputation in order to carry millions of Cyber's e-mail advertisements free of charge.
In sum, we find that there is little likelihood that Cyber will be able to establish the necessary elements of its claim under the "essential facilities" or "bottleneck" doctrine and that AOL has "refused to deal" with Cyber in violation of Section 2 of the Sherman Act. As there is little likelihood that Cyber will prevail on the merits of its antitrust claim at a final hearing or that it will be irreparably harmed in the absence of a temporary restraining order, its motion for injunctive relief in the form of a temporary restraining order must be denied.
The motion of Cyber Promotions, Inc. to amend its Complaint is GRANTED. Cyber Promotions, Inc. is GRANTED leave to file and serve a Second Amended Complaint in the form appended to its motion.
The motion of Cyber Promotions, Inc. for injunctive relief in the form of a temporary restraining order is DENIED.
IT IS SO ORDERED.
CHARLES R. WEINER