Phantomalert Inc . v. Apple Inc .

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 11, 2025 Decided July 24, 2026
No. 25-7017
P HANTOMALERT I NC .,
APPELLANT
v.
APPLE INC .,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:24-cv-00786)
Matthew I. Summers argued the cause for appellant. With
him on the briefs was Thomas C. Willcox.
Deborah Elman and Bruce E. Gerstein were on the brief
for amici curiae Professor Eric A. Posner and the American
Antitrust Institute in support of appellant.
Julian Kleinbrodt argued the cause for appellee. With him
on the brief was Cynthia Richman.
Before: P ILLARD , WALKER and GARCIA, Circuit Judges.
Opinion for the Court filed by Circuit Judge P ILLARD.

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P ILLARD, Circuit Judge: When the Covid-19 pandemic
struck in March 2020, PhantomALERT retrofitted its mobile
traffic app to enable users to spot, report, and avoid viral
outbreaks. But Apple barred that update from the App Store,
explaining that PhantomALERT’s revamped app failed to meet
new guidelines Apple had put in place to ensure the reliability
of Covid-19-related information. PhantomALERT sued Apple
in federal district court here, claiming that the tech company
violated the Sherman Antitrust Act and California antitrust and
unfair-competition law by tying the sale of Apple devices to
use of the App Store and by monopolizing a market consisting
of means to access apps on the iPhone in the United States.
When plaintiff did not submit a brief in opposition to Apple’s
motion to dismiss—instead responding only by attempting to
file an amended complaint—the district court dismissed
PhantomALERT’s original complaint without prejudice and
denied leave to late-file the proffered amended complaint as
futile for failure to plead a relevant antitrust market. This
appeal followed.
We conclude that the district court’s dismissal order was
final and appealable, and we affirm. The amended complaint
fails to state a claim under the Sherman Act because it does not
plausibly allege a relevant product market, and
PhantomALERT does not dispute that its remaining state-law
claims must follow the federal claims out the door.
I.
A.
The Sherman Antitrust Act of 1890 makes a “basic
distinction between concerted and independent action,”
Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 767
(1984) (citation omitted), embodied in its two primary
provisions.

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Section 1, regarding concerted action (such as by
contract), “declare[s] . . . illegal” “[e]very contract . . . in
restraint of trade.” 15 U.S.C. § 1. Tying arrangements—in
which a seller of a “tying” good requires buyers to purchase a
separate, “tied” good—violate Section 1 of the Sherman Act
“as contracts in restraint of trade” when they suppress
competition in the market for the tied good. Ill. Tool Works
Inc. v. Indep. Ink, Inc., 547 U.S. 28, 34 (2006). To show that a
tying arrangement is illegal per se, a plaintiff must establish,
among other things, that the tying and tied goods are two
separate products, the defendant “has market power in the tying
product market,” and the “tying arrangement forecloses a
substantial volume of commerce.” United States v. Microsoft,
253 F.3d 34, 85 (D.C. Cir. 2001) (en banc) (per curiam).
Absent that showing of per se illegality, a plaintiff may
rely on the “rule of reason” framework, which is the
“prevailing standard of analysis” for Section 1 cases generally.
Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49
(1977). At its core, the purpose of the rule of reason is to
determine “whether the challenged [action] is one that
promotes competition or one that suppresses competition.”
Nat’l Soc’y of Pro. Engr’s v. United States, 435 U.S. 679, 691
(1978). Under the rule of reason’s “burden-shifting
framework,” a plaintiff must first show that the challenged tie
causes substantial anticompetitive effects in the market for the
tied good. Ohio v. Am. Express Co. (Amex), 585 U.S. 529, 541
(2018); see Microsoft, 253 F.3d at 95. If the plaintiff meets that
burden, the defendant can avoid liability by showing that there
is nonetheless a procompetitive rationale for the tie, see Amex,
585 U.S. at 541; Microsoft, 253 F.3d at 95, for instance, that
buyers find packaged sales in the market “attractive,” Jefferson
Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984)
(allowing hospital’s tying of anesthesiology services with
surgeries). Once that is shown, the burden then shifts back to

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the plaintiff to “demonstrate that the procompetitive
efficiencies could be reasonably achieved through less
anticompetitive means.” Amex, 585 U.S. at 541-42; Microsoft,
253 F.3d at 95.
Section 2 of the Sherman Act makes it unlawful for a firm
to “monopolize.” 15 U.S.C. § 2. That ban, which extends to
“unilateral activity,” Copperweld, 467 U.S. at 768, has “two
elements: ‘(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.’” Microsoft, 253 F.3d at 50 (quoting United
States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)). Thus,
“having a monopoly does not by itself violate” Section 2. Id.
at 58. A firm whose product or service dominates a market
because it offers better value than any potential substitute
product or service does not monopolize unlawfully; to be
viable, a plaintiff’s Section 2 claim must further allege that the
monopolist has engaged in anticompetitive conduct.
Anticompetitive conduct under the Sherman Act means
protection of a monopoly position “through a means other than
competition on the merits.” Id. at 62; see id. at 65. As it is for
most Section 1 claims, anticompetitive conduct supportive of
Section 2 claims is evaluated under the rule of reason’s burden
shifting analysis. See id. at 59.
B.
In its memorandum opinion, the district court reviewed the
amended complaint and concluded that it failed to state a claim
for relief. Our factual recitation accordingly draws from the
facts as the amended complaint alleges them, with reasonable
inferences drawn in plaintiff’s favor. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 554-56 (2007).

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Since 2010, PhantomALERT has provided a traffic app
that crowdsources real-time traffic data, similar to the more
widely known Waze, and has made its app available via
monthly, annual, and lifetime paid subscription options.
During that time, PhantomALERT’s traffic app “experienced a
healthy demand on the App Store for displaying live traffic
safety information, road hazards, natural disaster alerts and
other information to help drivers drive alert, safely and thus
ticket free.” Am. Compl. ¶ 18 (J.A. 73). In the wake of the
March 2020 outbreak of Covid-19 in the United States,
PhantomALERT “revamped” that app to include Covid-19
“hotspot map data and reporting,” and had plans to add
“symptom, test result and vaccination reporting, tracking,
tracing and mapping features.” Id. ¶ 21 (J.A. 74). On March
14, 2020, however, Apple “announced changes to the App
Store Review Guidelines,” limiting the App Store’s
distribution of apps “related to COVID-19” to “recognized
entities such as government organizations, health-focused
NGOs, companies deeply credentialed in health issues, and
medical or educational institutions.” Id. ¶ 27 (J.A. 77).
Apple’s new Guidelines also required apps in
“highly-regulated fields,” including healthcare, to be
“submitted by a legal entity that provides these services, and
not by an individual developer.” Id.
Apple’s Developer Program License Agreement requires
app developers to submit for Apple’s review any app they seek
to have included in the App Store to enable Apple to ensure the
new or updated app complies with Apple’s guidelines.
Pursuant to that requirement and its new Covid-19-related
Guidelines, Apple rejected PhantomALERT’s update for its
app; the Google Play Store, where plaintiff sought to publish
the Android version of its app, did likewise under its own
policy banning all COVID-related apps. Days after rejecting
PhantomALERT’s app, Apple launched its own Covid-19 app

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in collaboration with the federal government. Apple invited
PhantomALERT to “mak[e] the necessary changes to be in
compliance with the App Store Review Guidelines
and . . . resubmit[] [its] revised [app].” Id. ¶ 33 (J.A. 78).
According to PhantomALERT, hundreds of similar apps were
rejected under Apple’s and Google’s policies limiting the
COVID-related apps that users could access on iPhones and
Androids.
A couple of months later, in May 2020, Apple published
more new rules for contact-tracing apps. The new rules
required that exposure-notification apps merely be “endorsed
or approved by a governmental entity,” not—as before—issued
by one, and prohibited those apps from including any
advertising. Id. ¶¶ 43-44 (J.A. 82). That rule change appeared
in Apple’s “Exposure Notification Addendum” to the
Developer Program License Agreement, id. ¶¶ 42-44 (J.A. 82),
but PhantomALERT alleges that it never received notice of
such a change and, had it been notified, “would have pursued”
the endorsement-or-approval option, id. ¶ 45 (J.A. 83). At least
seven contact-tracing apps in addition to Apple’s own such app
were approved for use in the United States under the new
guidelines.
PhantomALERT sued Apple on March 26, 2024, and
Apple moved to dismiss the complaint for failure to state a
claim. Plaintiff got an extension until July 10 to file its
response to Apple’s motion. Minute Order of June 20, 2024
(J.A. 3). On July 11, 2024—a few minutes past the July 10
deadline—PhantomALERT filed an amended complaint
unaccompanied by any brief in opposition to Apple’s motion
to dismiss. See Am. Compl. (J.A. 62-98); Op. 3-4 (J.A. 227-
28).

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Plaintiff’s proffered amended complaint alleges that
Apple’s longstanding policy of preventing its customers from
accessing apps outside the App Store, coupled with its shifting
guidelines that barred PhantomALERT from offering its
revamped app on the App Store, violated federal and state
antitrust law and state unfair competition law. Am. Compl. at
3-7 & ¶¶ 12, 17 (J.A. 64-68, 70, 73). The amended complaint
contains five counts: unlawful tying of the iPhone to the App
Store, in violation of Sherman Act Section 1 (Count I);
monopolization of “access to apps on iPhones,” in violation of
Sherman Act Section 2 (Count II); monopolization of “access
to Covid-19-related tracing apps in the App Store for use in the
United States,” in violation of Sherman Act Section 2 (Count
III); violation of the California Cartwright Act, a state antitrust
law (Count IV); and violation of California’s Unfair
Competition Law (Count V). Id. ¶¶ 72-106 (J.A. 90-97).
After PhantomALERT submitted its amended complaint
as its sole response to Apple’s motion, Apple filed a reply brief
arguing that (1) its motion should be granted as uncontested
because PhantomALERT did not timely oppose it, (2) the
amended complaint “should be stricken” because it was filed
after the 21-day window to amend a complaint as of right had
closed, and (3) the amended complaint was futile in any event
because it did not cure the deficiencies Apple’s motion
identified in the original complaint. Apple Reply ISO Mot. to
Dismiss (J.A. 99-114). PhantomALERT responded with
motions for leave to amend its complaint and for the court to
deem its amended complaint timely filed. The district court
issued a minute order denying the latter motion in part because
plaintiff “did not request, and the Court did not grant, an
extension of time to file a Rule 15(a)(1) amendment.” Minute
Order of July 26, 2024 (J.A. 4). PhantomALERT then sought
leave to late-file its amended complaint, focusing exclusively
on a technical error that led to the post-midnight filing. Apple

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opposed on the ground that amendment was still futile. In its
reply, PhantomALERT for the first time defended its claims on
their merits against Apple’s argument that neither the original
nor the amended complaint states a claim for relief.
After that flurry of filings, the district court entered the
order now on appeal. It dismissed PhantomALERT’s original
complaint without prejudice, deeming it conceded under Local
Civil Rule 7(b), and denied plaintiff leave to late-file an
amended complaint because doing so “would be futile.” Op. 6
(J.A. 230). In support of its futility determination, the court
reviewed the allegations of the proffered amended complaint
and held that its Sherman Act and Cartwright Act allegations
failed “for the same threshold reason”: they did not define the
relevant product market or geographic market. Id. at 9-19 (J.A.
233-43). The court also concluded that plaintiff failed to plead
the prerequisites for injunctive relief under California Unfair
Competition Law. Id. at 19-20 (J.A. 243-44).
II.
The de novo standard of review applies whether we are
considering an order dismissing a complaint for failure to state
a claim or one denying a motion to amend a complaint based
on futility. See Fed. Express Corp. v. U.S. Dep’t of Com., 39
F.4th 756, 763 (D.C. Cir. 2022); Ramos v. Garland, 77 F.4th
932, 940 (D.C. Cir. 2023). We first confirm the basis of our
appellate jurisdiction, which neither party briefed but is not
subject to waiver. See El Puente v. U.S. Army Corps of Eng’rs,
100 F.4th 236, 245 (D.C. Cir. 2024). We then evaluate whether
the amended complaint states a claim for relief.
A.
PhantomALERT invokes our appellate jurisdiction under
28 U.S.C. § 1291, which extends only to “final decisions” of

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U.S. district courts. For purposes of Section 1291, a “decision
is not final . . . unless it ends litigation on the merits and leaves
nothing for the court to do but execute the judgment.”
Cunningham v. Hamilton County, 527 U.S. 198, 204 (1999)
(quotation marks omitted).
We conclude that we have jurisdiction over this appeal.
“Finality under section 1291 turns on whether the district court
intended the judgment to represent the final decision in the
case,” N. Am. Butterfly Ass’n v. Wolf, 977 F.3d 1244, 1253
(D.C. Cir. 2020) (quotation marks omitted), and here, the order
on appeal shows that the district court intended to
“disassociate[] itself from [the] case,” Gelboim v. Bank of Am.
Corp., 574 U.S. 405, 408 (2015) (quotation marks omitted).
The district court denominated its order “final” and
“appealable” and directed the clerk to “close the case.” Order
1 (J.A. 246). That characterization, while not binding on us,
shows “that the district court thought the order had terminated
the action.” Ciralsky v. CIA, 355 F.3d 661, 667 (D.C. Cir.
2004). The text and context are to the same effect. The district
court dismissed the complaint and denied plaintiff leave to
amend because it determined that amendment would be futile,
given that the amended complaint would not withstand a
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6). See Hall & Assocs. v. EPA, 956 F.3d 621, 629-30
(D.C. Cir. 2020). Reading the order’s text and accounting for
its “surrounding circumstances,” Wolf, 977 F.3d at 1253, we
conclude that it “le[ft] nothing more for the court to do,” Attias
v. Carefirst, Inc., 865 F.3d 620, 624 (D.C. Cir. 2017). It was,
as the district court said, a “final, appealable Order.” Order 1
(J.A. 246).

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B.
The issue before us de novo is whether the amended
complaint states a claim for relief. See Appellee Br. 16; Reply
Br. 2. We conclude that it does not. PhantomALERT must
allege relevant product markets for each of its Sherman Act
claims, but the amended complaint fails to do so.
As for its tying claim, PhantomALERT never mentions the
per se theory of liability for tying, so we assume it means to
proceed under the more commonly utilized rule of reason.
Regardless, “any inquiry into the validity of a tying
arrangement must focus on the market or markets in which the
two products are sold.” Jefferson Parish, 466 U.S. at 18. That
is because an antitrust plaintiff must show either (under the per
se theory of liability) that the tying and tied goods are in distinct
markets and the tie forecloses a substantial volume of
commerce in the market for the tied good, see Microsoft, 253
F.3d at 85; Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124
F.3d 430, 443 (3d Cir. 1997), or (under the rule of reason) that
the arrangement produces substantial anticompetitive effects in
the tied-good market that are unsupported by any
procompetitive rationale defendant has put forward, see Amex,
585 U.S. at 541.
So, too, a monopoly claim ordinarily depends on
identifying the relevant market in which monopolistic conduct
occurred. Market definition “establishes a context for
evaluating the defendant’s actions”—whether it possesses
monopoly power in the relevant market. Microsoft, 253 F.3d
at 81. To be sure, where there is direct evidence that a firm can
“profitably raise prices substantially above the competitive
level” (i.e., exercise monopoly power), no market definition is
needed. Id. at 51; see Broadcom Corp. v. Qualcomm Inc., 501
F.3d 297, 307 n.3 (3d Cir. 2007) (collecting cases). But such

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direct evidence is only “rarely available,” Microsoft, 253 F.3d
at 51, and PhantomALERT does not allege it here. More
commonly, monopoly power is inferred from “circumstantial
evidence” through a “structural approach” that looks to “a
firm’s possession of a dominant share of a relevant market that
is protected by entry barriers.” Id.; cf. Amex, 585 U.S. at 543
(“[C]ourts usually cannot properly apply the rule of reason
without an accurate definition of the relevant market.”). Only
once the plaintiff establishes that defendant has monopoly
power in a relevant antitrust market do we ask whether that
monopoly was acquired or maintained through anticompetitive
means—or, conversely, whether a procompetitive rationale
explains it. See Microsoft, 253 F.3d at 58.
For any antitrust claim, a relevant market consists of “all
products reasonably interchangeable by consumers for the
same purposes.” Id. at 52. It is, in short, the “arena within
which significant substitution in consumption . . . occurs,”
Amex, 585 U.S. at 543 (quotation marks omitted), and it
typically contains both a “geographic” component and a
“product” component, United States v. Marine
Bancorporation, Inc., 418 U.S. 602, 618 (1974). We focus
here solely on PhantomALERT’s deficient product-market
allegations “[b]ecause that is all this case requires.” Connelly
v. United States, 602 U.S. 257, 267 n.2 (2024).
To define a relevant product market, antitrust plaintiffs
may resort to tools aimed at measuring the “cross-elasticity of
demand,” defined as the “degree to which a similar product will
be substituted for the product in question.” Rothery Storage &
Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 218 (D.C. Cir.
1986). If products are not realistic substitutes, then they do not
compete in the same product market. If, conversely, consumers
would, in the absence of the conduct challenged as
monopolistic, substitute between products in response to

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modest price increases (or economically equivalent quality
decreases), then the products compete.
One prominent approach to detecting whether the
plaintiff’s proposed market definition includes all reasonable
substitutes is known as the hypothetical monopolist test. Its
basic mechanism is to ask whether a hypothetical monopolist
controlling all suppliers in the entire proposed market could
profitably impose a “small but significant non-transitory
increase in price.” FTC. v. Whole Foods Mkt., Inc., 548 F.3d
1028, 1038 (D.C. Cir. 2008). If so, the market is properly
defined; if not, the market definition must be adjusted to
encompass any substitutes available to consumers that could
limit or negate the profitability of a price increase by the
monopolist. See Husky Mktg. & Supply Co. v. FERC, 105 F.4th
418, 421 n.* (D.C. Cir. 2024).
Plaintiffs’ proposed market definitions may also rely on
various “practical indicia” of a relevant product market, first
outlined in Brown Shoe Co. v. United States, 370 U.S. 294
(1962). That case also “introduced into [antitrust] law the
concept of submarkets within the relevant market,” Rothery
Storage, 792 F.2d at 218, “which, in themselves, constitute
product markets for antitrust purposes,” Brown Shoe Co., 370
U.S. at 325. To determine the contours of a market, courts may
consider “industry or public recognition of the submarket as a
separate economic entity, the product’s peculiar characteristics
and uses, unique production facilities, distinct customers,
distinct prices, sensitivity to price changes, and specialized
vendors.” Id. at 325. Our circuit has described the Brown Shoe
factors as “evidentiary proxies for direct proof of
substitutability.” Rothery Storage, 792 F.2d at 218.
“[T]he process of defining a product market often involves
inquiry into economic realities and industry practice,” Nat’l

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Aviation Trades Ass’n v. Civ. Aeronautics Bd., 420 F.2d 209,
213-14 (D.C. Cir. 1969), and so is ordinarily a “deeply fact-
intensive inquiry” unsuited to resolution before any
opportunity for discovery, Todd v. Exxon Corp., 275 F.3d 191,
199-200 (2d Cir. 2001) (Sotomayor, J.). Whatever approach it
uses to define the market, an antitrust plaintiff must plausibly
allege a product market that bears “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.” Id. at 200 (citation omitted). Such
allegations need not be “detailed,” but they must consist of
“more than labels and conclusions” or a “formulaic recitation
of the elements of a cause of action.” Twombly, 550 U.S. at
555.
Scattered through its amended complaint,
PhantomALERT postulates the existence of three product
markets, one “foremarket” and two related “aftermarkets”: (1)
a U.S. smartphone market; (2) a market for “access to apps on
the iPhone” in which Apple, via the App Store, has a monopoly
within the United States; and (3) within that initial aftermarket,
a “submarket of access to Covid-19-related tracing apps . . . for
use in the United States.” Am. Compl. ¶¶ 15-16, 73, 84, 87
(J.A. 71-72, 90-91, 93); see Appellant Br. 31. Plaintiff’s
antitrust claims focus on the latter two.
PhantomALERT’s central claims are that Apple has
unlawfully tied the App Store to the sale of the iPhone (Count
I) and, via the App Store, has maintained a monopoly in the
“access to apps on the iPhone” and “access to Covid-19-related
tracing apps” markets (Counts II & III). Am. Compl. ¶¶ 72-90
(J.A. 90-94). To prevail on Counts I and II, therefore,
PhantomALERT must allege a relevant product market of
“access to apps on the iPhone,” and to prevail on Count III, it
must allege a relevant product market of “access to Covid-19-

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related tracing apps.” We thus focus on whether plaintiff has
adequately alleged any such product markets; we assume
without deciding that it has alleged a relevant smartphone
market.
1.
As just discussed, PhantomALERT alleges that Apple has
unlawfully tied the App Store to the sale of the iPhone while
simultaneously monopolizing the App Store market (which
plaintiff describes as the market for “access to apps on the
iPhone”) to exclude plaintiff’s app. Am. Compl. ¶¶ 74, 84 (J.A.
91, 93). According to PhantomALERT, Apple bundles the
App Store with the iPhone and then “forces iPhone users to
acquire apps exclusively through the App Store,” thus banning
the act of “sideloading” apps by downloading them from other
app marketplaces or the internet. Id. ¶¶ 74-75 (J.A. 91); see id.
¶¶ 82-84 (J.A. 92-93). As a result, plaintiff alleges, iPhone
users in the United States were unable to access
PhantomALERT’s updated app at all after Apple rejected it.
Id. at 6-7 (J.A. 67-68). The amended complaint thus alleges
that the App Store constitutes “a special type of market, known
as a single-brand aftermarket.” Appellant Br. 39.
“[I]n some instances one brand of a product can constitute
a separate market.” Eastman Kodak Co. v. Image Tech. Servs.,
Inc., 504 U.S. 451, 482 (1992). That occurs most often in
“aftermarkets,” where “demand for a good is entirely
dependent on the prior purchase of a durable good in a
foremarket.” Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 976
(9th Cir. 2023). In Eastman Kodak, for example, the demand
for the parts and servicing of Kodak photocopiers (the
aftermarkets) depended on the purchase of Kodak equipment
(the foremarket). See 504 U.S. at 456-58.

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Our circuit has never articulated the circumstances under
which a single-brand aftermarket is accurately defined. On
appeal, PhantomALERT presses two alternative theories.
Neither succeeds.
The first would find a single-brand aftermarket when
customers’ foremarket purchases “lock them into the
aftermarket,” thus preventing substitution away from that
brand. Appellant Br. 39-45 (citing Eastman Kodak, 504 U.S.
451). Under this theory, if customers are “generally unaware”
of an aftermarket restriction when buying a foremarket
product, they will be unable to price that restriction into their
purchasing decisions. Id. at 40. That dynamic can constrain
competition in the aftermarket even if the defendant does not
have market power in the foremarket. See Posner Amicus Br.
9-11. The App Store, according to PhantomALERT,
constitutes a single-brand aftermarket for the iPhone because
“Apple customers are locked into the App Store” when they
purchase iPhones. Appellant Br. 40.
To identify a market under that “lock-in” theory, plaintiff
asks us to embrace the test in Epic Games. There, the Ninth
Circuit held that a plaintiff seeking to identify a single-brand
aftermarket must nonetheless show that the market the plaintiff
identifies encompasses all reasonable substitutes. See 67 F.4th
at 977; see Appellant Br. 40-44 (tracking the Epic Games
factors); Oral Arg. Rec. 39:24-54 (plaintiff’s counsel stating
that the Epic Games factors “pretty accurately describe” the
appropriate test and “include . . . a general understanding of
cross-elasticity”); Posner Amicus Br. 11 (listing Epic Games
factors). We therefore assume without deciding that such a
requirement applies to a complaint alleging a single-brand
aftermarket on the basis of Eastman Kodak-style lock-in.

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The amended complaint does not clear that hurdle. It is
bereft of allegations speaking to either a hypothetical
monopolist test, the Brown Shoe factors, or the availability of
substitutes with regard to a market of “access to apps on the
iPhone” consisting solely of the App Store. Material relevant
to those legal requirements is absent from the amended
complaint outside of allegations about the smartphone
market—allegations copied from a complaint filed by the U.S.
Department of Justice in a separate case. See Am. Compl.
¶¶ 15-16 (J.A. 71-73) (quoting United States v. Apple, Inc., No.
24-4055 (D.N.J. June 11, 2024), ECF No. 51 (Am. Compl.)
¶¶ 172-79). As already noted, we are assuming that plaintiff
has sufficiently alleged the smartphone market. The amended
complaint’s shortcoming is that it does not plausibly allege a
lack of substitutes for the App Store, so fails to plausibly allege
that the App Store is a relevant single-brand product market.
Indeed, one potential substitute comes immediately to mind:
accessing apps on a web browser. See Appellee Br. 34-35;
Reilly v. Apple, Inc., 578 F. Supp. 3d 1098, 1108 (N.D. Cal.
2022) (making this point). Perhaps websites are not a
substitute for the App Store in the market for “access to apps
on the iPhone.” But if they are not, the amended complaint
does not explain why.
Resisting this conclusion, PhantomALERT asserts that
“practical indicators” and the “hypothetical monopolist test”
point to the App Store as a relevant single-brand market.
Appellant Br. 37-38; Reply Br. 17-23. But those allegations
were never before the district court. The amended complaint
barely identifies—much less plausibly alleges—a relevant
product market consisting solely of the App Store. That
“fail[ure] to draw the market’s boundaries to encompass the
product at issue as well as all economic substitutes for [it]”
dooms plaintiff’s attempt to allege a single-brand aftermarket.

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Coronavirus Reporter v. Apple, Inc., 85 F.4th 948, 956 (9th
Cir. 2023) (quotation marks omitted).
PhantomALERT fares no better on its alternative theory.
Plaintiff and its amicus assert that significant market power in
the foremarket (here, smartphones in the United States) can
enable a defendant to suppress competition in a related
aftermarket, regardless of whether customers are locked in to
purchasing the aftermarket product (here, the App Store). See
Appellant Br. 45-48 (citing Lambrix v. Tesla, Inc., 737 F. Supp.
3d 822 (N.D. Cal. 2024)); Posner Amicus Br. 6-9. But plaintiff
never pressed such a “foremarket power” framework before the
district court. See Reply ISO LTF at 12-21 (J.A. 211-20). It
therefore forfeited any reliance on that theory. See Keepseagle
v. Perdue, 856 F.3d 1039, 1055 (D.C. Cir. 2017); compare also
Appellee Br. 40 (arguing that PhantomALERT waived the
“foremarket power” theory), with Reply Br. 22-24 (failing to
address the waiver assertion). Having proceeded solely on a
lock-in theory before the district court, PhantomALERT may
not switch theories on appeal and ask for reversal on that basis.
See Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905
F.2d 438, 453 (D.C. Cir. 1990).
In sum, the amended complaint does not satisfy a threshold
requirement that plaintiff itself has asked us to apply to its
primary theory for treating the App Store as a relevant product
market, and plaintiff failed to claim in the district court and so
has forfeited any reliance on its alternative theory. Either way,
PhantomALERT has failed to plausibly allege a single-brand
aftermarket consisting of the App Store. That defect dooms
Counts I and II in the amended complaint.
2.
Plaintiff also alleges that Apple monopolized a
“submarket” of the App Store it describes as “access to Covid-

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19-related tracing apps in the App Store for use in the United
States.” Am. Compl. ¶ 87 (J.A. 93). But here, too, the
amended complaint fails to adequately draw the boundaries of
the proposed market.
The first and most basic problem is that PhantomALERT’s
own allegations are imprecise and self-contradictory. The
amended complaint speaks in terms of a market of “access” to
Covid-19-related apps. Id. On its own terms, that allegation
proposes a market consisting of means to access Covid-19-
related apps within the App Store that is distinct from, and
contained within, a market consisting of means to access apps
on the App Store without limitation as to type of app—a
“single-brand subset of an alleged single-brand aftermarket.”
Appellee Br. 44. But PhantomALERT pervasively confuses a
market of “access” to such apps, as it alleged, with the market
for such apps themselves, to which it sparingly alludes in its
amended complaint and more frequently mentions in its
briefing and argument to us. See, e.g., Am. Compl. ¶ 87 (J.A.
93) (“[Covid-19-related apps] are not substitutable for other
apps . . . because they perform/ed a specific purpose relating
only to Covid-19 tracing and related actions.”); Appellant Br.
48 (“PhantomALERT properly alleges that the market for
COVID-tracing apps on the iPhone is a relevant antitrust
market.”); Reply Br. 25 (“PhantomALERT alleged the special
non-substitutability of COVID-tracing apps . . . .”); Oral Arg.
Rec. 14:53-59 (referring to the “Covid tracing app market” as
the “central market”).
The two markets are not the same. Just as the App Store
is not interchangeable with the apps available on it, a market
consisting of “Covid-19-related apps” is distinct from a market
of “accessing” such apps. A market of “access” to Covid-19-
related apps on the iPhone would include every competitor to
the App Store as a means for iPhone users to access Covid-19-

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related apps; a market consisting of such apps themselves
would include every competitor to PhantomALERT’s Covid-
tracing app itself.
The amended complaint provides no allegations showing
that a market of “access to Covid-19-related tracing apps”
exists. At oral argument, plaintiff disclaimed the word
“access” in its market definition. Oral Arg. Rec. 17:50-18:12.
But that is the framing plaintiff presses in the amended
complaint—not once, but multiple times, see Am. Compl.
¶¶ 86-90 (J.A. 93-94)—and our review is “limited to the
complaint,” Coronavirus Reporter, 85 F.4th at 956. Besides,
“access” is a pivotal term if the proposed product market is to
be, in the words of the amended complaint, a “submarket” for
access to apps within “the relevant market of the App Store,”
Am. Compl. ¶ 87 (J.A. 93), as a submarket must be “a smaller
grouping within the main market,” IIB Phillip E. Areeda &
Herbert Hovenkamp, Antitrust Law, ¶ 533(b) n.4 (5th ed.
2021), and plaintiff pleads both a market for means to use apps
in general and a submarket of means to use Covid-tracing apps
as markets for “access.”
Even were we to accept plaintiff’s belated reframing,
moreover, it would fall short. The only allegation about a
potential market for “Covid-19-related tracing apps” states
simply that such apps “are not substitutable for other apps”
because they perform a “specific purpose relating only to
Covid-19 tracing and related actions.” Am. Compl. ¶ 87 (J.A.
93). Such a bare, unadorned assertion is little more than a
“label[] and conclusion[].” Twombly, 550 U.S. at 555. The
district court therefore correctly concluded that
PhantomALERT had not plausibly alleged a “submarket”
consisting of Covid-19-related apps on the iPhone, much less
of access to such apps. Count III of the amended complaint
accordingly fails to state a claim.

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* * *
The amended complaint does not plausibly allege the
product markets on which its Sherman Act counts are
premised. It therefore does not state a claim for relief under
that statute. PhantomALERT does not dispute the district
court’s conclusion that the California Cartwright Act count
rises or falls with the Sherman Act allegations, see Op. 8 (J.A.
232) (first citing Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236
F.3d 1148, 1160 (9th Cir. 2001); and then citing Golan v.
Pingel Enter., Inc., 310 F.3d 1360, 1369 (Fed. Cir. 2002)), so
we do not separately address that claim. Plaintiff also does not
appeal, and has forfeited any challenge to, the district court’s
dismissal of the California Unfair Competition Law claim. See
id. at 19-21 (J.A. 243-45). We therefore affirm the district
court’s conclusion that the amended complaint fails to state a
claim for relief.
III.
One final wrinkle bears ironing out. PhantomALERT
expressed concern at oral argument that the district court’s
judgment not be treated as dismissal “with prejudice.” Oral
Arg. Rec. 0:35-1:12, 24:19-27:45 (citing Moyar v. U.S. Dep’t
of Def., 2024 WL 2795958 (D.C. Cir. May 31, 2024) (per
curiam)). A with-prejudice dismissal of the case might have
carried res judicata effect. See Cohen v. Bd. of Trs. of the Univ.
of D.C., 819 F.3d 476, 478 (D.C. Cir. 2016). Unlike in Moyar,
however, the district court here did not hold that no conceivable
amended pleading could “‘possibly cure the deficiency’
warranting dismissal in the first place,” Moyar, 2024 WL
2795958, at *4 (quoting Belizan v. Hershon, 434 F.3d 579, 583
(D.C. Cir. 2006)), but only that plaintiff’s proffered amended
complaint did not do so, see Op. 6, 21 (J.A. 230, 245).
Measured by this circuit’s “high” bar for dismissing an action

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with prejudice, Belizan, 434 F.3d at 583, we see no reason to
construe the district court’s order here to have effected such a
dismissal. Provided it could clear any other limitations to suit,
PhantomALERT remains free to file a separate action in the
district court. See Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 396 (1990) (dismissal without prejudice does not have res
judicata effect).
* * *
For the foregoing reasons, we affirm the judgment of the
district court.
So ordered.

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