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Judge refuses to toss out class action lawsuit against Gogo

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Gogo in-flight internet STOCK
Gogo in-flight internet STOCK

A federal judge last week refused to toss out a class action lawsuit targeted at Gogo. Plaintiffs have accused the company of running a monopoly with its in-flight Wi-Fi service, and US District Judge Edward Chen saw no reason to dismiss the case. He said plaintiffs have offered up "plausible antitrust claims" with their complaints, which allege that Gogo has violated antitrust law by signing lengthy contracts with most major airlines and making it unreasonably difficult for those companies to back out of existing deals. They claim that Gogo dominates the in-flight Wi-Fi market with a share of 85 percent, though Chen isn't so sure about that number.

In his filing, the judge points out that plaintiffs have made some factual errors; they've claimed that Gogo and Southwest had an agreement for Wi-Fi service when in fact the companies were never linked. In the case of United Airlines, Chen also disputes the idea that the airline's entire fleet has been "locked up" by Gogo for several years. But those reasons aren't enough to toss out the lawsuit, he says. "Even if the 85 percent figure is not correct, plaintiffs allege with specificity other major airlines — including American, Delta, and US Air — whose fleets in their entirety or near entirety are or were locked up by Gogo's contracts. Thus, it is plausible that even if not an 85 percent market share, Gogo has a substantial enough market share such that, together with the allegations in plaintiffs complaint that there are high barriers to entry, a substantial share of the market has been foreclosed."