A federal judge has refused to throw out a class action complaint by air travelers who claim that in-flight internet provider Gogo is violating antitrust laws through its long-term contracts with major airlines.
In a decision published in San Francisco and embedded below, U.S. district judge Edward Chen concluded last week that passengers had provided evidence to go forward with claims that Gogo(s gogo) has an unlawful monopoly on in-flight Wi-Fi services. The passengers claim that Gogo has an 85 percent market share and that airlines can’t easily terminate Gogo agreements. As Judge Chen notes, the company has deals with major airlines like “American, Delta, and US Air — whose fleets in their entirety or near entirety are or were locked up by Gogo’s contract.”
Gogo pricing varies by flight, but a 24-hour pass purchased before takeoff is $14. In their lawsuit filed in October, the passengers claimed that competitor Row44 charges only $5 per flight, and that Gogo’s long-term contracts were an illegal restraint on trade. The initial complaint was thrown out, but the judge is letting the amended version go forward after the plaintiffs added new facts.
The passengers have also claimed that Gogo’s internet technology is inferior because it relies on ground-to-air tower transmission rather than the satellite service offered by Row44 and JetBlue’s ViaSat service.
Gogo denies that it controls 85 percent of the in-flight Wi-Fi market, and argues that the lawsuit wrongly states it had a contract with Southwest. In the ruling, Judge Chen acknowledged that Gogo’s objections may be legitimate, but added that the passengers supplied enough other other facts to let the case go forward. The ruling means that the company will have to respond in detail to the passengers’ allegations and the case will move toward a trial.
Update: A Gogo spokesperson stated, “We continue to believe that the suit is without merit and we will continue to vigorously defend ourselves.”
Whatever the outcome, frustrated flyers are unlikely to have cheap and fast in-flight Wi-Fi anytime soon. As my colleague Stacey Higginbotham has explained, “it’s all about the pipe” — meaning that there are limits to how much broadband can be delivered to a metal tube flying through the skies.
Here’s the latest ruling, which was spotted by Law360:
[protected-iframe id=”d7001ee4dcbd04cc2a8edb770151bd71-14960843-34118173″ info=”//www.scribd.com/embeds/204240862/content?start_page=1&view_mode=scroll&show_recommendations=true” width=”100%” height=”600″ frameborder=”0″ scrolling=”no”]
This story was updated at 12:15pm ET to include the statement from Gogo.