Date: 04-13-2018

Case Style:

Case Number: 17-1871

Judge: Rendell

Court: United States Court of Appeals for the Third Circuit on appeal from the Eastern District of Pennsylvania

Plaintiff's Attorney: John Innelli and Stephen R. Bolden

Defendant's Attorney: Steve A. Reed, R. Brendan Fee, Brian C. Rocca and Sujal J. Shah

Description: Philadelphia taxicab drivers, aggrieved by the influx of
taxis hailed at the touch of an app on one’s phone, brought
this antitrust action to protest the entry of Appellee Uber
Technologies, Inc. (“Uber”) into the Philadelphia taxicab
4
market. The Philadelphia Taxi Association (“PTA”), along
with 80 individual taxicab companies (collectively,
“Appellants”), appeal the District Court’s dismissal of their
Second Amended Complaint (“SAC”) alleging one count of
attempted monopolization under Section 2 of the Sherman
Act, 15 U.S.C. § 2, and seeking injunctive relief and treble
damages under Section 4 of the Clayton Act, 15 U.S.C. § 15.
Appellants urge us to reverse the District Court’s
Order, contending that Uber violated the antitrust laws
because its entry into the Philadelphia taxicab market was
illegal, predatory, and led to a sharp drop in the value of
taxicab medallions as well as a loss of profits. They contend
that this is evidence that Uber’s operation in Philadelphia was
anticompetitive and caused them to suffer an antitrust injury.
However, the conduct they allege falls short of the conduct
that would constitute an attempted monopoly in contravention
of the antitrust laws. Thus, we will affirm the District Court’s
dismissal of the SAC for failure to state a claim for attempted
monopolization and failure to state an antitrust injury.
I. Background & Procedural History1
From March of 2005 to October of 2014, taxicabs
operating in Philadelphia were required to have a medallion
and a certificate of public convenience, issued by the
Philadelphia Parking Authority (“PPA”). Medallions are
property, and are often pledged as collateral to borrow funds
to finance the purchase of the cab or to “upgrade and improve
1 As this appeal arises from the grant of a motion to dismiss,
the factual allegations set forth below are taken from the SAC
and are accepted as true. See Bridge v. Phoenix Bond &
Indem. Co., 553 U.S. 639, 642 n.1 (2008).
5
the operations of taxicabs.” 53 Pa. C.S.A. § 5712(a). Once
medallion-holders comply with the obligatory standards for
taxicabs, they may obtain a certificate of public convenience.
Those standards, which provide for safety and uniformity
among taxicabs, require vehicles to be insured and in proper
condition, and mandate that drivers are paid the prevailing
minimum wage, are proficient in English, and have the
appropriate drivers’ licenses.
As alleged in the SAC, when the medallion system
was mandated in Philadelphia in 2005, a medallion was worth
only $65,000. In October of 2014, there were approximately
500 taxicab companies in Philadelphia. Together, 7,000
drivers held 1610 medallions, each valued at an average of
$545,000.
Appellants are 80 of those 500 companies, which
collectively hold 240 of the 1610 medallions, as well as PTA,
which was incorporated to advance the legal interests of its
members—the 80 individual medallion taxicab companies.
Uber began operating in Philadelphia in October of
2014 without securing medallions or certificates of public
convenience for its vehicles. While a potential rider can avail
himself of a medallion taxicab by calling a dispatcher or
hailing an available cab, to use Uber, he can download the
Uber application onto his mobile phone and request that the
vehicle come to his location, wherever he is. Passengers enter
payment information, which is retained by Uber and
automatically processed at the end of each ride. Uber does not
own or assume legal responsibility for the vehicles or their
6
operation, nor does it hire the drivers as its employees.2 Uber
did not pay fines to the PPA or comply with its regulations
when it first entered the Philadelphia taxi market, as is
otherwise required for medallion taxicabs. Appellants
maintain that this rendered Uber’s operation illegal, and
enabled the company to cut operating costs considerably.
In October of 2016, the Pennsylvania state legislature
passed a law approving Uber’s operation in Philadelphia,
under the authority of the PPA. The law, which went into
effect in November of 2016, allows the PPA to regulate both
medallion taxicab companies and Transportation Network
Companies (“TNCs”)—a classification that includes Uber
and other vehicle-for-hire companies that operate through
digital apps—in Philadelphia. TNCs must now obtain licenses
to operate and comply with certain requirements, including
insurance obligations and safety standards for drivers and
vehicles. The law also exempts TNCs from disclosing the
number of drivers or vehicles operating in the city, and allows
TNCs to set their own fares, unlike medallion taxicab
companies, which comply with established rates, minimum
wages, and have a limited number of vehicles and medallions
operating at once in Philadelphia.
Before this law passed, in Uber’s first two years in
Philadelphia, nearly 1200 medallion taxicab drivers left their
respective companies and began to drive for Uber. In those
2 We are aware that the issue of whether drivers can be
classified as employees or independent contractors is the
subject of ongoing litigation. See, e.g., Razak v. Uber Techs.,
Inc., No. 16-cv-573, 2017 WL 4052417 (E.D. Pa. Sept. 13,
2017).
7
two years, there were 1700 Uber drivers and vehicles
operating in Philadelphia, serving over 700,000 riders, for
more than one million trips. Simultaneously, medallion taxi
rides reduced by about 30 percent, and thus Appellants
experienced a 30 percent decrease in earnings. The value of
each medallion dropped significantly, to approximately
$80,000 in November of 2016. Fifteen percent of medallions
have been confiscated by the lenders due to default by
drivers.
The PTA and 75 individual taxicab companies filed a
Complaint, alleging three counts: attempted monopolization
under Section 2 of the Sherman Act, tortious interference
with contract under Pennsylvania law, and unfair competition
under Pennsylvania law. Uber moved to dismiss the
Complaint.
Appellants, the PTA and now 80 individual taxicab
companies, then filed an Amended Complaint, alleging the
same three counts. Uber moved to dismiss the Amended
Complaint. The District Court granted the dismissal, without
prejudice. The District Court noted that Plaintiffs alleged
merely harm to their business after Uber entered the
Philadelphia taxicab market, and that Plaintiffs pointed to
Uber’s supposed illegal participation in the taxicab market as
evidence of attempted monopolization. However, the District
Court concluded that these harms are “not the type of injuries
that antitrust laws were intended to prevent, and thus do not
establish antitrust standing.” Phila. Taxi Ass’n, Inc. v. Uber
Techs., Inc., 218 F. Supp. 3d 389, 392 (E.D. Pa. 2016). The
Court also dismissed the state law claims, for failure to plead
the proper elements of an unfair competition or a tortious
interference claim.
8
Appellants then filed the SAC, alleging one count of
attempted monopolization under Section 2 of the Sherman
Act and seeking treble damages under Section 4 of the
Clayton Act. Uber responded with a Motion to Dismiss,
which the District Court granted, with prejudice. Phila. Taxi
Ass’n, Inc. v. Uber Techs., Inc., 2017 WL 5515953 (E.D. Pa.
Mar. 20, 2017). The District Court held that Appellants, in
spite of multiple opportunities for amendment, had pled no
antitrust injury sufficient for antitrust standing, and were
unlikely to cure the lack of standing with any amendments to
the SAC. The Court also held that the PTA could not satisfy
the requirements for associational standing because the
association’s members lacked standing to sue on their own.
II. Standard of Review
The District Court had jurisdiction over the Sherman
Act claim pursuant to 28 U.S.C. §§ 1331, 1337(a), and 15
U.S.C. § 4. We have jurisdiction under 28 U.S.C. § 1291. We
exercise plenary review of the District Court’s dismissal of
the SAC, In re Lipitor Antitrust Litig., 868 F.3d 231, 249 (3d
Cir. 2017), and may affirm the judgment below on any basis
that is supported by the record. Murray v. Bledsoe, 650 F.3d
246, 247 (3d Cir. 2011). We accept as true the factual
allegations in the complaint, and draw all reasonable
inferences in the plaintiff’s favor. W. Penn Allegheny Health
Sys., Inc. v. UPMC, 627 F.3d 85, 91 (3d Cir. 2010).
III. Discussion
Competition is at the heart of the antitrust laws; it is
only anticompetitive conduct, or “a competition9
reducing aspect or effect of the defendant’s behavior,” that
antitrust laws seek to curtail. Atl. Richfield Co. v. USA
Petroleum Co., 495 U.S. 328, 344 (1990). “[I]t is inimical to
the antitrust laws to award damages for losses stemming from
continued competition.” Cargill, Inc. v. Monfort of Colo.,
Inc., 479 U.S. 104, 109–10 (1986) (alternations and internal
quotation marks omitted). This comports with the principle
underlying antitrust laws: to protect competition, not
competitors. See Brown Shoe Co. v. United States, 370 U.S.
294, 320 (1962).
If the challenged conduct has an effect on “prices,
quantity or quality of goods or services,” Mathews v.
Lancaster Gen. Hosp., 87 F.3d 624, 641 (3d Cir. 1996), we
will find a violation of antitrust laws only when that effect
harms the market, and thereby harms the consumer.
Anticompetitive conduct is the hallmark of an antitrust
claim. An allegation of anticompetitive conduct is necessary
both to: (1) state a claim for attempted monopolization; and
(2) aver that a private plaintiff has suffered an antitrust injury.
Appellants’ SAC, however, is deficient in averring conduct
that is, in fact, anticompetitive.
While our caselaw is unresolved regarding which to
address first—an antitrust violation or an antitrust injury3—
3 Compare, e.g., Matthews v. Lancaster Gen. Hosp., 87 F.3d
624, 639–41 (3d Cir. 1996) (first holding that plaintiff had
failed to state a claim for attempted monopolization, and then
concluding that plaintiff had also failed to allege an antitrust
injury), with, e.g., Angelico v. Lehigh Valley Hosp., Inc., 184
F.3d 268, 274 (3d Cir. 1999) (assuming the allegation of
10
we need not resolve that here, because Appellants’ claim fails
on both counts. We begin by discussing how Appellants’
allegations in the SAC fall short of demonstrating
anticompetitive conduct, and thus fail to state a claim for
attempted monopolization,4 and then discuss how in the
alternative, Appellants fail to allege antitrust injury to have
antitrust standing. For both reasons, we affirm the judgment
of the District Court dismissing the SAC with prejudice.
A. Attempted Monopolization
To prevail on a claim under Sherman Act Section 2 for
attempted monopolization, a plaintiff must prove: “(1) that
the defendant has engaged in predatory or anticompetitive
conduct with (2) a specific intent to monopolize and (3) a
dangerous probability of achieving monopoly power.” Mylan
Pharm. Inc. v. Warner Chilcott Pub. Ltd. Co., 838 F.3d 421,
defendant’s anticompetitive motive and then concluding that
the plaintiff had adequately alleged an antitrust injury).
4 Because the District Court found that Appellants had not
alleged an antitrust injury to have standing, the Court did not
reach the underlying attempted monopolization claim.
Appellants nevertheless raised the issue on appeal, and
because we may affirm the dismissal of the SAC on any basis
that is supported by the record, Murray, 650 F.3d at 247, we
will address this issue.
11
433 (3d Cir. 2016) (quoting Broadcom Corp. v. Qualcomm
Inc., 501 F.3d 297, 317 (3d Cir. 2007)). Moreover, to survive
a motion to dismiss under Rule 12(b)(6), the claim must be
“plausible on its face,” allowing us to “draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Liability hinges on whether valid business reasons, as part of
the ordinary competitive process, can explain the defendant’s
actions that resulted in a dangerous probability of achieving
monopoly power. See Avaya Inc., RP v. Telecom Labs, Inc.,
838 F.3d 354, 393 (3d Cir. 2016).
In the SAC, Appellants allege that Uber: (1) flooded
the market with non-medallion taxicabs, entered the market
illegally without purchasing medallions, operated at a lower
cost by failing to comply with statutory requirements and
regulations, and lured away drivers from Individual Plaintiffs,
which allegedly impaired the competitive market for
medallion taxicabs; (2) knew of PPA’s regulatory jurisdiction
over vehicles for hire, purposefully ignored or avoided the
regulations and rulings of the Court of Common Pleas, and
thereby excluded rivals from competing in the taxicab
market; and (3) is dangerously close to achieving monopoly
power with its market share and by operating in an unfair
playing field with the “financial ability” to be the only market
player and to destroy competitors’ business. SAC ¶ 83.
Appellants also complain that the new legislation authorizing
the TNCs’ operation would facilitate the creation of an illegal
monopoly.
We find that the SAC fails to plausibly allege any of
the three elements of an attempted monopolization claim.
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1. Anticompetitive Conduct
Allegations of purportedly anticompetitive conduct are
meritless if those acts would cause no deleterious effect on
competition. This is where the SAC falters: Appellants set
forth a litany of ways in which Uber’s entry into the market
has harmed Appellants’ business and their investment in
medallions; yet none of the allegations demonstrate a harmful
effect on competition.
To determine whether conduct is anticompetitive,
“courts must look to the monopolist’s conduct taken as a
whole rather than considering each aspect in isolation.”
LePage’s Inc. v. 3M, 324 F.3d 141, 162 (3d Cir. 2003) (en
banc).
Here, Appellants claim that Uber inundated the
Philadelphia taxicab market illegally with their non-medallion
vehicles. They contend that Uber’s entry into the market was
predatory because it failed to comply with statutory and
regulatory requirements, failed to purchase medallions, failed
to pay drivers a minimum wage, and failed to obtain the
proper insurance, among other actions. All of these actions,
Appellants assert, enabled Uber to operate at a significantly
lower cost than the medallion companies, and thereby acquire
a stronghold in the Philadelphia taxicab market.
Appellants also maintain that Uber “flooded” the
Philadelphia taxicab market by improperly luring drivers
away from medallion companies, including Individual
Plaintiffs. Appellants cite Uber’s practice of sending
representatives to 30th Street Station and the Philadelphia
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International Airport, where medallion taxicab drivers often
congregate, to disseminate information about its services and
to recruit potential drivers. They argue that Uber promised
new drivers financial inducements, such as reimbursements
for the cost of gasoline, as an incentive to leave their
medallion companies and instead drive for Uber.
Considering the averments regarding Uber’s conduct
in their totality, Uber’s elimination of medallion taxicab
competition did not constitute anticompetitive conduct
violative of the antitrust laws.
First, inundating the Philadelphia taxicab market with
Uber vehicles, even if it served to eliminate competitors, was
not anticompetitive. Rather, this bolstered competition by
offering customers lower prices, more available taxicabs, and
a high-tech alternative to the customary method of hailing
taxicabs and paying for rides. It is well established that lower
prices, as long as they are not predatory, 5 benefit
consumers—“regardless of how those prices are set.” Atl.
Richfield, 495 U.S. at 340. “Cutting prices in order to increase
business often is the very essence of competition.” Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 592
(1986). Thus, lost business alone cannot be deemed a
5 To allege predatory pricing, a plaintiff must first
demonstrate that prices are set below costs, and that the
competitor had a dangerous probability of recouping those
lost profits after it had driven other competitors out of the
market. Brooke Grp. Ltd. v. Brown & Williamson Tobacco
Corp., 509 U.S. 209, 222, 224 (1993). Appellants have not
alleged predatory pricing in this case.
14
consequence of “anticompetitive” acts by the defendant. See
Atl. Richfield, 495 U.S. at 337.
Second, Uber’s ability to operate at a lower cost is not
anticompetitive. Running a business with greater economic
efficiency is to be encouraged, because that often translates to
enhanced competition among market players, better products,
and lower prices for consumers. Even if Uber were able to cut
costs by allegedly violating PPA regulations, Appellants
cannot use the antitrust laws to hold Uber liable for these
violations absent proof of anticompetitive conduct. Even
unlawful conduct is “of no concern to the antitrust laws”
unless it produces an anticompetitive effect. Brunswick Corp.
v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 487 (1977).
Finally, hiring rivals may be anticompetitive, but only
in certain cases. For example, if rival employees were hired in
an attempt to exclude competitors from the market for some
basis other than efficiency or merit, such as to acquire
monopoly power or to merely deny the employees to the
rival, this could violate the antitrust laws if injurious to the
rival and to competition at large. W. Penn, 627 F.3d at 109
(citing cases).
However, Appellants acknowledge that the nearly
1200 medallion taxicab drivers that Uber recruited did not
remain idle, but rather they drove for Uber. In sum, what
Appellants allege does not give rise to an inference of
anticompetitive or exclusionary conduct and suggests, if
anything, that Uber’s ability to attract these drivers was due to
its cost efficiency and competitive advantage.
Thus, the SAC is devoid of allegations of truly
anticompetitive conduct.
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2. Specific Intent to Monopolize
Appellants allege specific intent to monopolize from
Uber’s knowledge that the PPA maintained regulatory
authority over vehicles-for-hire, and its choice to avoid
regulation by being a TNC that neither owned vehicles nor
employed drivers. They also point to Uber’s alleged willful
disregard of the rulings of the Court of Common Pleas.
Appellants’ claim, in essence, is that Uber’s knowledge that
their operation was illegal reveals a specific intent to
monopolize.
“[I]n a traditional § 2 claim, a plaintiff would have to
point to specific, egregious conduct that evinced a predatory
motivation and a specific intent to monopolize.” Avaya, 838
F.3d at 406 (citing Spectrum Sports, Inc. v. McQuillan, 506
U.S. 447, 456 (1993)).
Some courts have inferred specific intent from
anticompetitive or exclusionary conduct, Advo, Inc. v.
Philadelphia Newspapers, Inc., 51 F.3d 1191, 1199 (3d Cir.
1995), for instance, when business conduct is “not related to
any apparent efficiency.” Aspen Skiing Co. v. Aspen
Highlands Skiing Corp., 472 U.S. 585, 608 n.39 (1985)
(quoting R. Bork, The Antitrust Paradox 157 (1978))
(alterations omitted); see also 4 Phillip E. Areeda & Herbert
Hovenkamp, Antitrust Law ¶ 805d, (4th ed. 2017) (discussing
how some courts “would find for the plaintiff only if the
defendant’s acts were not motivated by ‘reasonable’ or
‘legitimate’ business purposes”).
16
While Uber’s alleged conduct might have formed the
basis of a regulatory violation, its knowledge of existing
regulations alone cannot reasonably be said to demonstrate
specific intent to monopolize. Further, Uber’s choice to
distinguish itself from other vehicles-for-hire, eschewing
medallions in favor of independent drivers who operate their
own cars at will, can instead be reasonably viewed as
“predominantly motivated by legitimate business aims.”
Times Picayune Publ’g Co. v. United States, 345 U.S. 594,
627 (1953). Appellants have not averred any other motive.
The allegations suggest that these business choices allowed
Uber to operate more efficiently, and to offer a service that
consumers find attractive, thus enabling it to acquire a share
of the Philadelphia taxicab market.
Thus, Uber’s alleged competitive strategy of creating a
vehicle-for-hire business model, presumably to acquire
customers, does not reflect specific intent to monopolize.
Accordingly, Appellants have failed to allege specific intent
on Uber’s part.
3. Dangerous Probability of Achieving Monopoly Power
We held in Broadcom Corp. v. Qualcomm Inc. that
because the dangerous probability standard is a complex and
“fact-intensive” inquiry, courts “typically should not resolve
this question at the pleading stage ‘unless it is clear on the
face of the complaint that the “dangerous probability”
standard cannot be met as a matter of law.’” 501 F.3d at 318–
17
19 (quoting Brader v. Allegheny Gen. Hosp., 64 F.3d 869,
877 (3d Cir.1995)).
We may consider factors such as “significant market
share coupled with anticompetitive practices, barriers to
entry, the strength of competition, the probable development
of the industry, and the elasticity of consumer demand” to
determine whether dangerous probability was alleged in the
pleadings. Id. Entry barriers include “regulatory requirements,
high capital costs, or technological obstacles[] that prevent
new competition from entering a market.” Id. at 307 (citations
omitted). “No single factor is dispositive.” Id. at 318.
Appellants argue that Uber has a dangerous probability
of achieving monopoly power because it has pushed
numerous competitors out of the market. As discussed,
however, the SAC fails to allege anticompetitive practices by
Uber. Nor does the SAC mention Uber’s market share; it
merely suggests that Uber and medallion taxicabs had similar
numbers of vehicles operating in Philadelphia as of October
2016. This allegation falls short of indicating Uber’s market
share in the context of all the competitors in the Philadelphia
taxicab market, such as other TNCs.
Similarly, the SAC makes no allegation of current
barriers to entry or weak competition from other market
participants. Appellants make the bold allegation that Uber
holds the power to raise barriers to entry in the market,
without any factual support. In fact, the SAC alleges that
Uber was readily able to enter the Philadelphia market.
“[E]asy entry—particularly historical evidence of entry—is
even more significant in the attempt case than in
monopolization cases generally.” Areeda & Hovenkamp, ¶
18
807a.6 Surely other competitors, such as Lyft, are able to
enter without difficulty, as well.
Nor does the SAC describe any potentially harmful
industry developments. It only vaguely claims that Uber may
be able to drive out competition and raise entry barriers.
Appellants assert in the SAC that once Uber becomes the
dominant competitor, it would be able to charge higher prices,
and consumers who do not own smartphones would be
deprived of the ability to hail taxis on the street. Absent any
allegations of a dangerous probability of achieving monopoly
power, this argument fails. And, as counsel for Uber stated at
oral argument, if Uber raised its prices, this would encourage
other rivals to enter the market and charge lower prices,
battling Uber through price competition.
Because the elements of attempted monopolization are
often interdependent, proof of one element may provide
“permissible inferences” of other elements. Broadcom, 501
F.3d at 318 (quoting Barr Labs., Inc. v. Abbott Labs., 978
F.2d 98, 112 (3d Cir.1992)). Even so, none of the other
elements of attempted monopolization allow us to infer a
dangerous probability that Uber will achieve monopoly
6 Areeda and Hovenkamp explain that in an attempt case,
when “the defendant is not yet a monopolist,” market prices
are more competitive. ¶ 807g. On the other hand, “[i]n a
monopolization case the defendant is already a dominant firm
and the market already presumably exhibits monopoly prices
that have not been effectively disciplined by new entry.” Id.
Thus, easy entry into the market is indicative that the market
lacks barriers to entry that may otherwise protect a dominant
firm’s monopoly power. Id.
19
power. Acknowledging Broadcom’s reticence to resolve the
dangerous probability question at the pleadings stage, we
nevertheless find that the SAC does not allege any of the
relevant factors to prove that Uber had a dangerous
probability of achieving monopoly power.
In sum, Appellants have failed to set forth a plausible
claim of attempted monopolization under Section 2 of the
Sherman Act, as a matter of law.
III. Antitrust Standing
Alternatively, Appellants’ antitrust claim fails for lack
of antitrust standing, which is a threshold requirement in any
antitrust case. Rooted in prudential principles, antitrust
standing is distinct from Article III standing, which is rooted
in the Constitution. Ethypharm S.A. Fr. v. Abbott Labs., 707
F.3d 223, 232 (3d Cir. 2013).7 While “[h]arm to
the antitrust plaintiff is sufficient to satisfy the
constitutional standing requirement of injury in fact,” courts
must also consider “whether the plaintiff is a proper party to
bring a private antitrust action.” Associated Gen. Contractors
of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S.
519, 535 n.31 (1983); see also Areeda & Hovenkamp, ¶ 335.
7 Because antitrust standing is prudential, we are not bound to
address it first, because it “does not affect the subject matter
jurisdiction of the court, as Article III standing does.”
Ethypharm, 707 F.3d at 232.
20
Of the requirements for antitrust standing,8 antitrust
injury is “a necessary but insufficient condition,” and is the
only requirement in dispute here. Barton & Pittinos, Inc. v.
SmithKline Beecham Corp., 118 F.3d 178, 182 (3d Cir. 1997).
In Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., the
Supreme Court rejected the notion that antitrust injury could
be alleged by a private plaintiff averring that it would have
fared better without the defendant’s alleged conduct. 429 U.S.
477. Rather, the plaintiff must prove the existence of an
antitrust injury, which is an “injury of the type the antitrust
laws were intended to prevent and that flows from that which
makes defendants’ acts unlawful.” Id. at 489; see also Alberta
Gas Chems. Ltd. v. E.I. du Pont de Nemours and Co., 826
F.2d 1235, 1240 (3d Cir. 1987) (explaining that to establish
antitrust injury, “plaintiffs must prove more than harm
causally linked to an illegal presence in the market”). The
injury must “reflect the anticompetitive effect either of the
violation or of anticompetitive acts made possible by the
8 The test for antitrust standing is: “(1) the causal connection
between the antitrust violation and the harm to the plaintiff
and the intent by the defendant to cause that harm, with
neither factor alone conferring standing; (2) whether the
plaintiff’s alleged injury is of the type for which the antitrust
laws were intended to provide redress; (3) the directness of
the injury, which addresses the concerns that liberal
application of standing principles might produce speculative
claims; (4) the existence of more direct victims of the alleged
antitrust violations; and (5) the potential for duplicative
recovery or complex apportionment of damages.” Ethypharm,
707 F.3d at 232–33 (quoting In re Lower Lake Erie Iron Ore
Antitrust Litig., 998 F.2d 1144, 1165–66 (3d Cir. 1993)).
21
violation.” W. Penn, 627 F.3d at 101 (quoting Brunswick, 429
U.S. at 489).
Compensating plaintiffs injured by the effects of truly
anticompetitive conduct serves the purpose of antitrust laws,
namely, to foster competition. Thus, the antitrust injury
requirement ensures that damages are only awarded for losses
that “correspond[] to the rationale for finding a violation of
the antitrust laws in the first place.” Atl. Richfield, 495 U.S. at
342; Areeda & Hovenkamp, ¶ 337a. That is, there must be a
causal link between the alleged injury and an antitrust
violation’s anticompetitive effects.
Appellants decry Uber’s entry into Philadelphia as a
campaign to inflict economic harm and to cause Appellants to
lose their market share. They argue that all vehicles-for-hire
legally operating in Philadelphia, and the riding public, have
been harmed by Uber’s allegedly illegal presence in
Philadelphia between October of 2014 and October of 2016,
when TNCs were officially permitted to operate. Appellants
allege that they experienced financial harm and a reduced
market share through fewer drivers, medallion cabs sitting
idle, a decline in ridership, and loss of medallion value. The
effect of the decrease in earnings, Appellants argue, is that
taxicab companies are nearing default on their medallions and
are close to being driven out of business.
Appellants allege their own injury, namely, financial
hardship. Tellingly, they fail to aver an antitrust injury, such
as a negative impact on consumers or to competition in
general, let alone any link between this impact and the harms
22
Appellants have suffered.9 Perhaps this is because Appellants
cannot do so. According to Appellants’ own pleadings,
Uber’s entry into the Philadelphia market, regardless of its
legality, increased the number of vehicles-for-hire available
to consumers and product differentiation in the market,
thereby increasing competition.
The facts of Brunswick illustrate this point. There, a
bowling equipment manufacturer acquired several failing
bowling alleys that had defaulted on their equipment
payments. 429 U.S. at 479–80. Three active bowling alleys
brought an antitrust claim against the manufacturer, arguing
that if the alleys had been allowed to fail, former patrons
would have frequented plaintiffs’ alleys, increasing plaintiffs’
profits and market share. Id. at 481.
The Supreme Court held that even if the acquisition
was unlawful because it provided the manufacturer with
monopoly power, the plaintiffs failed to prove that there were
anticompetitive effects of that acquisition in order to establish
an antitrust injury. Id. at 487–88. Plaintiffs sought to recover
lost profits from bolstered competition—the manufacturer’s
keeping the defaulting alleys in business. Id. The presence of
more bowling alleys resulted in more competition, and thus
the Supreme Court held that plaintiffs had not sustained an
antitrust injury. Id. at 489.10
9 Appellants allege the potential detriment to consumers in the
event that medallion taxicabs are driven out of the market,
entirely. See, e.g., SAC ¶ 62. Yet they fail to aver any facts
suggesting that this is an imminent, realistic possibility.
10 See also Areeda & Hovenkamp, ¶ 337 (“At its most
fundamental level, the antitrust injury requirement precludes
23
Similarly here, Appellants urge the application of
antitrust laws for the express opposite purpose of antitrust
laws: to compensate for their loss of profits due to increased
competition from Uber. However, harm to Appellants’
business does not equal harm to competition. “Conduct that
merely harms competitors, . . . while not harming the
competitive process itself, is not anticompetitive.” Broadcom,
501 F.3d at 308. Were we to award Appellants antitrust
damages to compensate for their financial injuries, we would
condemn vigorous competition, rather than encourage it. See
Travelers Ins. Co. v. Blue Cross of W. Pa., 481 F.2d 80, 84
(3d Cir. 1973).
Without demonstrating a harmful effect on price, such
as predatory or monopoly pricing, Appellants instead argue
that Uber’s ability to operate at a lower cost caused
Appellants economic harm and caused Appellants to lose
their market share. But Appellants never argue that the lower
cost—evidence of increased competition—failed to result in
lower prices for consumers. “A plaintiff who wants . . . less
competition or higher prices, that would injure consumers,
does not suffer antitrust injury.” U.S. Gypsum Co. v. Ind. Gas
Co., 350 F.3d 623, 627 (7th Cir. 2003).
Nor do Appellants aver a negative effect on the
availability of taxicab services. Appellants themselves admit
that Uber’s 1700 vehicles took over 700,000 riders on more
than one million trips in its first two years in Philadelphia,
while the number of medallion cabs allegedly decreased by at
any recovery for losses resulting from competition, even
though [in Brunswick] such competition was actually caused
by conduct violating the antitrust laws.”).
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least 15 percent, or roughly 240 vehicles, from its peak of
1610. Thus, the SAC alleges an increase in the availability of
vehicles-for-hire for Philadelphia passengers.
Appellants also insist that Uber’s alleged illegal
presence in Philadelphia caused an antitrust violation.11 They
attempt to circumvent the antitrust injury requirement by
focusing on how Uber’s purportedly illegal operation enabled
it to cut costs and increase its market share. But again, the
Supreme Court has squarely rejected illegal conduct as a basis
for antitrust injury. A competitor’s illegal presence in a
market is not a per se antitrust violation, and any resulting
injury is alone insufficient for a private plaintiff to state an
antitrust injury. Atl. Richfield, 495 U.S. at 334 (quoting
Brunswick, 429 U.S. at 489).
Finally, Appellants do not cite any case in support of
the contention that Uber’s violation of state regulations, even
if that gave Uber a competitive advantage, renders its
operation in violation of antitrust laws. Even if we were to
find Uber’s operation in Philadelphia unlawful in its first two
years, we would do so under PPA regulations, and not under
antitrust laws. Ultimately, Uber’s presence in the market, as
alleged, created more competition for medallion taxicabs, not
less, and thus Uber’s so-called “predation”—operating
without medallions or certificates of public convenience—
does not give rise to an antitrust injury.
11 “The antitrust injury in this case is the anticompetitive
effect made possible by the violation of the laws and
regulations in place at the time.” SAC ¶ 75.
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In sum, we affirm the dismissal of the SAC for the
additional reason that it fails to assert an antitrust injury.
IV. Associational Standing
To have associational standing, the PTA must meet
three requirements: “(1) the organization’s members must
have standing to sue on their own; (2) the interests the
organization seeks to protect are germane to its purpose; and
(3) neither the claim asserted nor the relief requested requires
individual participation by its members.” Blunt v. Lower
Merion Sch. Dist., 767 F.3d 247, 279 (3d Cir. 2014) (quoting
Pa. Prison Soc. v. Cortes, 508 F.3d 156, 163 n.10 (3d Cir.
2007)).
The District Court concluded that the PTA failed the
first requirement of associational standing that the Supreme
Court articulated in Hunt v. Washington State Apple
Advertising Commission, 432 U.S. 333, 343 (1977), because
the Individual Plaintiffs lack standing to sue on their own in
light of their failure to aver an antitrust injury.
However, as we discussed in Section III, supra, Article
III standing is a constitutional requirement, separate from
antitrust standing, and Article III standing could be satisfied if
a plaintiff presents a “case or controversy.” United Food &
Commercial Workers Union Local 751 v. Brown Grp., Inc.,
517 U.S. 544, 554–55 (1996).
Here, the Individual Plaintiffs do have Article III
standing by virtue of their alleged competitive injury in the
taxicab market, such that the PTA satisfies the first
requirement, and could plausibly meet the other two
requirements, for associational standing. However, even if the
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PTA has associational standing, they do not have antitrust
standing in order to maintain an antitrust cause of action.
V. Conclusion
Appellants may have been better off, financially, if
Uber had not entered the Philadelphia taxicab market.
However, Appellants have no right to exclude competitors
from the taxicab market, even if those new entrants failed to
obtain medallions or certificates of public convenience. See
Ill. Transp. Trade Ass’n v. City of Chicago, 839 F.3d 594, 597
(7th Cir. 2016) (Posner, J.), cert. denied sub nom. Ill. Transp.
Trade Ass’n v. City of Chicago, Ill., 137 S. Ct. 1829 (2017).
If medallion taxicabs could prevent TNCs from
entering the Philadelphia market, and if incumbents could
prevent new entrants or new technologies from competing
because they fear loss of profits, then “economic progress
might grind to a halt.” Id. at 596–97. “Instead of taxis we
might have horse and buggies; instead of the telephone, the
telegraph; instead of computers, slide rules.” Id. at 597.
Absent any allegations of anticompetitive conduct,
Appellants fail to allege any of the elements for a claim for
attempted monopolization under Section 2 of the Sherman
Act and fail to allege antitrust standing.

Outcome: For the foregoing reasons, the judgment of the District
Court is AFFIRMED.

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