Tyntec Inc. et al v. Syniverse Technologies, LLC

Middle District of Florida, flmd-8:2017-cv-00591

COMPLAINT against Syniverse Technologies, LLC filed by Tyntec Inc., Tyntec Group LTD. ; Receipt # TPA-042309.

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Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 1 of 27 PagelD 1 FLEO UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA, TAMPA DIVISION LES STORT STOFFLOADA TYNTEC INC., a Delaware Corporation, and TYNTEC GROUP LTD. f/k/a Phoenix Spring Ltd.,). a United Kingdom Corporation, Plaintiffs,) Case No. 8: 17-CN-591126-MAP SYNIVERSE TECHNOLOGIES, LLC, a Delaware Corporation Defendant. COMPLAINT 1. Plaintiffs tyntec Inc. and tyntec Group Ltd. f/k/a Phoenix Spring Ltd. (together " tyntec "), by and through its undersigned counsel, for its complaint against Syniverse Technologies, LLC (" Syniverse "), pursuant to: (a) Sections 1 and 2 of the Sherman Act (15 U. S. C. SS 1 and 2); (b) Sections 4 and 16 of the Clayton Act (15 U. S. C. 88 15 and 26); (C) Fla. Stat. S 542. 18 and 542. 19; and (d) claims pursuant to the common law of the State of Florida, pleads and alleges as follows: NATURE OF ACTION 2. To borrow a phrase from Yogi Berra, this complaint is " déjà vu all over again. " Approximately three years ago, tyntec's predecessor, Iris Wireless LLC (" Iris Wireless " or " Iris ") brought claims against Syniverse, in this Court, on a nearly identical fact pattern, alleging that Syniverse's attempt to terminate the same Peering Agreements discussed herein violated, inter alia, federal antitrust law. That case was captioned Iris Wireless LLC v. Syniverse Techs., No. 14-cv-1741-JSM-TGW (M. D. Fla.) (Moody, J.). 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 2 of 27 PagelD 2 3. In the Iris Wireless action, like here, Syniverse attempted to use its monopoly power to destroy a smaller competitor and further increase its overwhelming market share in the inter-carrier vendor (" ICV ") market. By eliminating one of its few remaining competitors (both then anc. now), Syniverse is plotting to raise prices to telecommunications carriers who will have no choice but to pay them. 4. On September 8, 2014, this Court held in the Iris Wireless case that Iris had properly stated claims against Syniverse for monopolization and attempted monopolization under Section 2 of the Sherman Act (the " September 2014 Ruling "). See Iris Wireless LLC v. Syniverse Techs., 49 F. Supp. 3d 1022 (M. D. Fla. 2014). 5. Following the September 2014 Ruling, Syniverse agreed to continue peering with Iris on the same terms that had been in effect for more than ten years (which terms still exist in the Peering Agreements today). i. tyntec acquired the Peering Agreements from Iris, and now Syniverse has renewed. its wrongful effort to terminate those Peering Agreements to prevent its smaller competitor from attempting to compete fairly in the ICV market, as discussed herein. The most compelling difference between then and now is that today Syniverse controls an even larger percentage of the relevant market that it monopolizes. 7. tyntec and Syniverse both operate as Inter-Carrier Vendors (" ICVs ") in the U. S. ICV market, providing interconnection services to connect one telecommunications carrier to another (" ICV services "), which enable text messages and other communications sent by a subscriber of one carrier (e. g., a T-Mobile subscriber) to reach a subscriber of another carrier (e. g., a Verizon subscriber). ICVs are also known as " hub providers, " because ICVs act as " hubs " to facilitate interoperability by transporting messaging traffic between carriers. N 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 3 of 27 PagelD 3 E. tyntec and Syniverse provide ICV services to different telecommunications carriers. Thus, the subscribers of tyntec's telecommunications carrier customers can reach the subscribers of Syniverse's telecommunications carrier customers through the exchange of ICV services between tyntec and Syniverse. 9. The exchange of ICV services between two ICVs is known as a " peering " arrangernent. ICVs " peer " with one another, without charging each other for providing reciprocal ICV services, through agreements that are continuous, uninterrupted and renewed automatically. The reciprocal connection that ICVs provide each other is referred to as a " peered connection " in the CTIA's newly-published manual entitled " Messaging Principles and Best Practices " (formerly known as the SMS and MMS Interoperability Guidelines). 10. tyntec and Syniverse currently have a peered connection arrangement, the terms of whiclı are governed by the two Peering Agreements that tyntec acquired from Iris Wireless: (1) the MMS Interworking Services Agreement Between Syniverse and Iris Wireless; and (2) the Wireless Peer-to-Peer Messaging Peering Services Agreement Between Syniverse and Iris Wireless, both dated April 7, 2015 (together the " Peering Agreements ").: 1. As set forth in the Peering Agreements, the current course of dealing between tyntec and Syniverse (per the industry custom) includes the exchange of inbound and outbound SMS and MMS text messages (SMS stands for " Short Message Service, " commonly called a text message; MMS stands for " Multimedia Messaging Service, " which enables pictures, video, and audio to be sent from one device to another). Consistent with all customary peered connection arrangeinents, both tyntec and Syniverse derive revenue, not by directly charging each other for carrying each other's messaging traffic, but by charging fees to the respective 722561314 Case 8: 17-CV-00591-RAL-MAP Document 1 Filed 03/10/17 Page 4 of 27 PageID 4 telecominunications carriers to which they provide interconnectivity. This is known as a " bill and keep " business model. 12. Syniverse and its predecessors have provided peered connection services to tyntec and its predecessor (Iris Wireless) on " bill and keep " terms, as contemplated by the Peering Agreements, since 2004 (i. e., more than twelve years). Indeed, the Peering Agreements were in existence: even prior to Syniverse's entry into the U. S. ICV market by virtue of Syniverse's acquisition of VeriSign, Inc. ' s mobile messaging division in October 2009. 13. Continuation of this mutual peering is critical to tyntec's survival in the ICV market and the commercial success of tyntec's business. Moreover, the ability of hundreds of thousands of wireless customers to send and receive low-cost and free text messages depends upon the continued existence of the tyntec/Syniverse Peering Agreement. 14. Despite this long-standing, customary and mutually-advantageous course of dealing, and without any legitimate pro-competitive justification, Syniverse announced on December 14, 2016, its intention not to renew its Peering Agreements with tyntec when the current terms of the Agreements terminate on April 7, 2017. 15. Syniverse instead seeks to enter into a new agreement with tyntec that would require tyntec to pay Syniverse per-message and other fees for carrying messaging traffic – fees that are comparable to or that exceed the fees that Syniverse charges its telecommunications carrier customers for messaging traffic. 15. Charging tyntec any per-connection fee, much less the above-market customer fees that Syniverse has proposed, would drive tyntec out of the ICV market and cripple its U. S. business operations. This would have the effect of reducing competition and thus stifling choice and raising prices for telecommunications carriers and their subscribers. Moreover, Syniverse's 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 5 of 27 PageID 5 unilateral decision to treat tyntec as a less-equal ICV-one subject to inferior business terms and conditions – will cause incalculable harm to tyntec's business reputation and goodwill. 17. On information and belief, Syniverse's intent in terminating the Peering Agreements is monopolistic and designed to squeeze tyntec out of the ICV market in order to increase Syniverse's own ICV market share, which is already at least 70%, and likely more. 18. Syniverse's conduct in terminating its Peering Agreements violates, inter alia, federal entitrust law and Florida statutory and common law. 19. Unless Syniverse is preliminarily and permanently enjoined from violating these laws and ordered to continue peering with tyntec pursuant to the terms of the Peering Agreements, tyntec (and its telecommunications carrier customers and their subscribers) will suffer inimediate and irreparable harm, as discussed herein. PARTIES 20. Plaintiff tyntec Group Limited f/k/a Phoenix Spring Limited is a United Kingdom corporation. It is the ultimate holding company of four global operating companies, including plaintiff tyntec Inc. Plaintiff tyntec Inc. is a privately-held operating company, incorporated in Delaware, with business operations in San Francisco, California and Dallas, Texas. It carries out tyntec's U. S. ICV business. For ease of reference, plaintiffs, tyntec Group Limited and tyntec Inc., shall be referred to as " tyntec. " 21. tyntec has provided telecommunications services to tyntec customers, with specialization in the area of messaging, since approximately 2002 — i. e., for over fourteen years. 22. In June 2016, tyntec acquired substantially all of the assets of Iris Wireless, including the Peering Agreements and its existing business. tyntec provided Syniverse with 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 6 of 27 PagelD 6 written notice of its acquisition of the Peering Agreements and otherwise complied with the express assignment provisions of the Peering Agreements. 23. On information and belief, Defendant Syniverse is a privately-held company, with its principal place of business located at 8125 Highwoods Palm Way, Tampa, Florida 33647. On March 8, 2017, at Syniverse's Fourth Quarter 2016 Conference Call, Syniverse CEO Steven Gray reported that Syniverse directly serves " 84% of the world with the network that we provide today " and serves the other 16% of the world indirectly. JURISDICTION AND VENUE 2. 4. The Court has subject matter jurisdiction over this action pursuant to 28 U. S. C. gs 1331 and 1337, as this is a civil action arising under U. S. federal law, including federal antitrust statutes protecting trade and commerce against restraints and monopolies. The Court has supplemental jurisdiction over tyntec's state law tort claims pursuant to 28 U. S. C. E 1367. 25. Defendant Syniverse resides in the Middle District of Florida and, accordingly, is subject to personal jurisdiction in this Court. 26. Venue is appropriate in the Middle District of Florida pursuant to 28 U. S. C. 8 1391 (6 (1) and 15 U. S. C. E 22, as this is the district in which the Defendant resides. FACTS COMMON TO ALL CLAIMS A. The Development Of The U. S. ICV Market and Established Bill and Keep Interconnection Practice 27. There are more than eighty-five wireless carriers operating in the United States and Canada, each of which is subject to the Communications Act of 1934, as amended (" The Communications Act "). 28. In the Communications Act's nascent years, pioneering wireless operators employed varied technologies, the effect of which was to prevent interconnecting with a 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 7 of 27 PagelD 7 consumer subscribed to another carrier. Thereafter, as wireless communication caught on and gained popularity, approximately in the 2001-2002 time period, these wireless carriers realized the econcmic importance of seamless interconnection with other carriers. The carriers came to the conclusion that all subscribers, no matter their carrier, ought to be able to communicate through text messages and otherwise with subscribers of other carriers. Without such interconnectivity, subscribers would be deprived of the full benefits of wireless services. The carriers recognized the benefits and efficiencies associated with uninterrupted interconnection among all wireless carriers and their subscribers. 29. At the same time, the carriers learned that achieving SMS and MMS interconnectivity presented serious technological and cost issues. To overcome these significant obstacles, ICVs emerged to develop and operate ICV services for the benefit of their telecommunications customers. As a consequence, a relevant market for ICV services in the United States developed and continues to exist today. 31). For more than fifteen years, ICVs have provided one another with peered connections, at no charge, through agreements that have been honored without interruption, and have been renewed automatically. 31. This course of dealing includes a reciprocal " bill and keep " arrangement for inbound messages from other ICVs and for outbound messages to other ICVs. As noted above, " bill and keep " refers to an arrangement in which neither of two interconnecting networks charges ihe other for terminating traffic that originates on the other network. Instead, each ICV recovers from its own subscribers the cost of both originating traffic that it delivers to the other network and terminating traffic that it receives from the other network. Under this longstanding approach, each ICV has earned its profits by charging fees to the carriers to which it provides 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 8 of 27 PagelD 8 interconnectivity. The telecommunications carriers pay the ICVs for their services but the ICVS do not pay each other for connecting messages. This bill and keep model means that ICVs, such as tyntec and Syniverse, each bill their own carrier customers and keep all of the proceeds of that revenue. On information and belief, ICVs never have and currently do not share revenue with each other. 32. Peering without charge is the foundation upon which the ICV business has been able to develop. No ICV would be competitive if required to pay other ICVs for peering services while a competing ICV enjoyed services at no cost. The ICV owners built their businesses by investing millions of dollars in reliance on the mutually-beneficial and profitable effects of bill and keep peering. Indeed, each ICV became more valuable by being part of a larger mutually interconnected universe. Currently, as a result of various acquisitions (discussed further below) there are only three ICVs operating in the United States: Syniverse, tyntec and non-party SAP. 34. The following graphical depiction provides a visual illustration of the relationships between these three ICVs and their telecommunications carrier customers: Syniverse Customers Syniverse SAP SAP Customers tyntec tyntec Customers 8 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 9 of 27 PagelD 9 35. As is evident from the above diagram, in order for each of the ICVs to effectively provide services to their telecommunications carrier customers, and ultimately the individual mobile phone users, the ICVs must have direct connection to one another's networks. tyntec's custome: ' s cannot communicate with Syniverse's customer base without access to Syniverse's network through Syniverse's peering services. This arrangement is mutually beneficial to both parties to the peering arrangement. For instance, Syniverse's relationship with tyntec allows Syniverse's customers to reach tyntec's customers and thus improves the value of Syniverse's service. B. ICV Competition, Evolution and Acquisitions 36. Since ICVs began operating in about 2001, numerous ICVs have competed to provide interconnection services to telecommunications carriers in the United States. Over time, certain ICVs acquired other ICVs or their assets and continued their functions. 27. For example, Syniverse entered the ICV market in October 2009, through its acquisition of VeriSign, Inc. ' s mobile messaging division. On information and belief, Syniverse's business has developed through various other acquisitions, including the 2006 acquisition of Interactive Technology Holdings, Billing Services Group's financial clearing business in 2007, MACH in 2013 (which acquisition, upon information and belief, occurred after Syniverse prevented MACH from entering the U. S. market itself), and Aicent in 2014. 58. At its inception in 1987, Syniverse was owned by GTE and called GTE Telecommunications Services. Later, when GTE was sold to Verizon, the company was renameci TSI Telecommunications. Thereafter, the company was sold to a private equity group, had its rame changed to Syniverse Technologies, went public, and went private again in 2011. 39. On information and belief, Syniverse has invested millions of dollars in its ICV business.. 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 10 of 27 PagelD 10 40. On information and belief, non-party SAP entered the ICV market through its acquisition of Sybase in May 2010. Prior to that acquisition, in November 2006, Sybase acquired Mobile365, which had been formed by the merger of Mobileway and Inphomatch in September 2004. 4. 1. On information and belief, SAP has invested millions of dollars in its ICV business. 42. As noted above, in June 2016, tyntec, via its parent company tyntec Group Limited (fkla Phoenix Spring Limited) acquired Iris Wireless's U. S. ICV business by virtue of its acquisition of the Peering Agreements. At this same time, tyntec also acquired Iris Wireless's peering agreement with SAP (the " SAP peering agreement "), which together constituted substantially all of the assets of Iris Wireless. tyntec also took over Iris's existing business. 43. tyntec has invested millions of dollars in its ICV services business, keeping the assets it acquired from Iris Wireless functioning in order to maintain, preserve and enhance the presence of a third " hub " in the U. S. ICV services market. 44. Today, as a result of the various acquisitions described above, there are only three ICVs left in the United States: Syniverse, SAP and tyntec. There are no suitable substitutes for ICV services available to the telecommunications carriers. There have been no new entrants into the ICV market in years and there are substantial barriers to entry. 45. The terms of the Peering Agreements, which have been in existence for over a decade, iare consistent with the long-standing norm among participants in the U. S. ICV market, in that they involve a bill and keep revenue model whereby Syniverse and tyntec do not charge each other for carrying messaging traffic, but where Syniverse and tyntec generate revenue by billing their respective telecommunications carrier customers and keeping the proceeds. The 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 11 of 27 PagelD 11 Peering Agreements also contain automatic renewal provisions whereby the terms of the Peering Agreements automatically renew for successive one year periods unless validly terminated. 1.-6. The SAP peering agreement, which has also been in existence for years, and which tyntec acquired from Iris Wireless, likewise includes a bill and keep arrangement and an automatic renewal provision. 4. 7. Notably, since tyntec's June 2016 acquisition of the SAP Agreement, SAP (unlike Syniverse) has been cooperative with tyntec, has honored the terms of the SAP peering agreement, and has facilitated the Iris-to-tyntec transition so that there would be no interruption in the course of dealing that SAP and Iris (now tyntec) have enjoyed for years. 48. SAP, unlike Syniverse, is not attempting to terminate its mutually beneficial peering arrangement with tyntec. 49. On information and belief, Syniverse and SAP peer with each other on " bill and keep " and other terms that renew automatically. 50. Thus, presently, all of the three ICVs remaining in the U. S. (Syniverse, SAP and tyntec) peer with each other at no charge. 51. This arrangement has been beneficial to Syniverse because it enables Syniverse to offer its telecommunications carrier customers the capability to have their subscribers intercornect with subscribers of carriers that use the services of other ICVs. This also has been profitable to Syniverse because it enables Syniverse to collect substantial fees from the carriers with which it has contracts. In particular, Syniverse collects a fee from its carrier customers for each message sent from a subscriber of one of its carriers to a subscriber of another ICV's telecommunications carrier customer. 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 12 of 27 PageID 12 C. Syniverse's Intent To Terminate The Peering Agreements 52. On December 14, 2016, Syniverse formally notified tyntec that it will no longer " peer " viith tyntec on a bill and keep basis and will break with longstanding precedent by not renewin; g the terms of the Peering Agreements upon their expiration in April 2017. $ 3. tyntec has since learned, as noted above, that Syniverse will refuse to carry tyntec's messaging traffic unless tyntec pays Syniverse fees for carrying that messaging traffic-fees that Syniverse does not charge to SAP, and fees that SAP does not charge either tyntec or Syniverse. 54. The fees that Syniverse seeks to charge tyntec are the sort of fees that Syniverse would charge a customer for carrying traffic. Indeed, the fees Syniverse has proposed charging tyntec are actually higher than the customer fees that would be acceptable to telecommunications carriers n that market.: 5. Thus, Syniverse intends to fundamentally change the nature of its business relationship with tyntec by treating tyntec like (or worse than) a telecommunications carrier customer (which tyntec is not) rather than as a fellow ICV and peering partner. 16. Syniverse's refusal to maintain a peered connection with tyntec would make it impossible for tyntec to remain competitive in the U. S. ICV market. 57. tyntec would disappear from the market altogether, thus enabling Syniverse to demand even higher fees from carriers, which would have only one other option, SAP – assuming that Syniverse does not then use the same tactic to eliminate SAP. 58. Syniverse's specific intent is to unilaterally terminate a voluntary, beneficial, and profitab e multi-year course of dealing in order to achieve an anticompetitive end — the destruct on of tyntec-even at the risk of degrading Syniverse's own service in the short run by jettisoning its connectivity with tyntec and the subscribers that tyntec delivers. 12 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 13 of 27 PagelD 13 59. The result would be to leave telecommunications carriers in the United States with only two ICVs to compete for their business – Syniverse and SAP. And, if Syniverse eliminates SAP, telecommunications carriers would be left with no choice at all-only Syniverse. This would leave Syniverse with the unrestricted ability to raise prices in the long run. 60. tyntec has made reasonable requests that Syniverse reconsider its decision to terminate the Peering Agreements. tyntec's CEO sought a meeting with Syniverse's CEO to discuss renewal of the Peering Agreements, but this request was rejected. 61. Syniverse agreed to participate in a VP-level meeting with tyntec, on January 27, 2017, te discuss the Peering Agreements, Syniverse's termination notice and the future of the tyntec/Syniverse business relationship (" January 27 Meeting "). 62. During the January 27 meeting, Syniverse representatives specifically stated that Syniverse's decision to terminate the Peering Agreements was rooted in the fact that Syniverse did not want tyntec to be a competitor in the ICV market. On information and belief, Syniverse does not want tyntec to have the ability to attract, and possibly convert, any of Syniverse's existing customers by offering them ICV services at competitive prices. 163. Even before its attempt to terminate the Peering Agreements, Syniverse has, at every turn, made it difficult for tyntec to do business in the U. S. market. For example, after tyntec acquired the Peering Agreements from Iris Wireless, Syniverse took approximately five months to take tyntec " live " on the Syniverse network and neglected to provide tyntec the technical and other approvals it needed to bring telecommunications carriers and their customers on line. Similarly, with each new carrier that tyntec seeks to connect, Syniverse employs delay tactics (lesigned to frustrate tyntec's ability to service its customers and to interfere with those 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 14 of 27 PagelD 14 customer relationships for its own benefit. For example, Syniverse has exceeded, for no legitimate reason, the contractual maximum number of days to connect a new tyntec customer and the reby improperly prevented the subscribers of tyntec's customers from exchanging messages with the subscribers of Syniverse's telecommunications carrier customers. 64. Syniverse is flexing its dominant market share muscle to drive a smaller competizor out of the ICV market, for the purpose and with the specific intent of reducing competicion, achieving and maintaining monopoly power, and enabling itself to raise prices and foreclosa competition. I). Syniverse's Historical Pattern Of Similar Conduct Designed to Eliminate Competitors 65. Syniverse's acquisition of most of the market for ICV services in the United States is largely the result of anticompetitive conduct, including bundling, delaying interconnections, disparagement and other tactics alleged herein, designed to foreclose competition. In short, Syniverse is no " innocent monopolist. " Coi 1. Anticompetitive Behavior in Europe-MACH Acquisition 66. Syniverse tried similar anticompetitive tactics in Europe in 2013, where it undertook to acquire its largest competitor, MACH. Following an in-depth review, the European Commission approved Syniverse's acquisition of MACH, but only subject to strict conditions. The approval was conditional upon the divestiture of MACH's Data Clearing services and Near Trade Roaming Data Exchange services in the European Economic Area (" EEA "). These two types of services are technical steps of the roaming process enabling people to use their mobile phones while travelling abroad. 167. The E. C. noted that " Syniverse and MACH are the two largest providers of these services in the EEA and globally. After a preliminary investigation, the E. C. raised concerns that 14 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 15 of 27 PagelD 15 the transaction, as initially notified, would have allowed Syniverse to increase prices or decrease the quality of these services. Indeed, the proposed merger would combine the first and the second largest supplier, creating a dominant player with virtual monopoly market shares. " 68. The E. C. investigation revealed that there are significant barriers to expansion in these markets and that the remaining smaller competitors would " neither be in a position to act as credible providers to large customers nor to replace effectively the competitive constraint that MACH exerts on Syniverse today. " Further, the E. C. found that customers have no significant buyer power to countervail the negative impact of the proposed concentration. Ominously, the investigation also indicated that the entry of new competitors into this wireless peering market would b: " unlikely. " 2. Syniverse's Refusal To Deal with Iris Wireless 69. As noted above, Syniverse tried similar tactics in the United States with tyntec's predecessor, Iris Wireless. 70. In July 2011, Syniverse demanded that Iris, which at the time had a much smaller share of the market, begin paying Syniverse 1. 5 cents per text message for every message above a Syniverse-devised threshold. This proposed change would have reversed a long-established course of business among the ICVs, raised rival Iris's costs, and destroyed the company's ability to compete against other ICVs. 21. Meanwhile, Syniverse also spread the word among Iris's customers that Syniverse would no longer honor its existing agreement with Iris. On information and belief, Syniverse also offered to provide free ICV services to Iris's largest customer, Metro PCS, if Metro PCS would nove its business from Iris to Syniverse. 122561814 Case 8: 17-CV-00591-RAL-MAP Document 1 Filed 03/10/17 Page 16 of 27 PageID 16 72. Iris filed suit against Syniverse and, on September 8, 2014, after the case was transferred to this Court from federal court in Virginia, Judge Moody denied Syniverse's motion to dismiss Iris's claims under Section 2 of the Sherman Act, 15 U. S. C. S 2. " 3. Subsequently, Iris Wireless's case against Syniverse was settled, with Syniverse agreeing, to renew its Peering Agreements with Iris on the same terms that had been in existence for year: 5 – i. e., a peered connection on a bill and keep basis. " 4. However, despite Syniverse's agreement to renew the Peering Agreements, Syniverse's predatory and anticompetitive conduct directed at Iris Wireless and its customers (discussed above) caused Iris's business to falter. The impact of Syniverse's conduct on Iris's business was compounded by: (i) a break in ICV service for Iris Wireless customers during the pendency of the litigation, which caused some of those customers seek ICV services from other providers, such as SAP; and (ii) Syniverse's lack of cooperation following the litigation settlement, whereby Syniverse refused to restore interconnection for certain Iris Wireless customers, making it impossible for Iris to successfully " onboard " those customers. Syniverse's Anti-competitive Bundling Practices 75. For at least the past seven years, Syniverse offered customers bundled discounts. These discounts foreclosed its competitors' ability to compete on a level playing field. Specifically, Syniverse offered messaging services that other ICVs (such as tyntec, Iris before it, and SAP) also offered. In addition, Syniverse offered a combination of additional services unrelated to messaging that other ICVs in the United States did not provide but which telecommunications carriers had to have in order to operate successfully. 76. These non-messaging services include, but are not limited to: (1) mobile data roaming; (ii) CRX and GRX data transport services; (iii) data clearing; (iv) financial clearing & settlement; (v) hosted data optimization; (vi) calling name service; (vii) number portability; (viii) 16 722561314 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 17 of 27 PagelD 17 Signaling Transport-INLink® (a transport service for ANSI-41 operators that includes a set of network-based services targeted specifically to the mobile industry); and (ix) ISUP Services LATALinkSM (service that helps operators reach local access transport areas more efficiently and economically) (collectively, " Non-Messaging Services "). 17. Syniverse " bundled " its messaging and Non-Messaging Services by offering carriers deep discounts on each service, but only on the condition that the carriers purchased both messaging and Non-Messaging Services from Syniverse. If the carriers chose to take only certain of the " bundled " services from Syniverse, the special prices did not apply and the telecommunications carrier customers would be forced to pay more to do business with both Syniverse (e. g., for Non-Messaging Services) and another ICV (for messaging services). 78. Other ICVs could not match the Syniverse bundle without providing messaging services unprofitably because carriers seeking to purchase messaging services from ICVs other than Syniverse would still have to purchase the Non-Messaging Services from Syniverse separately, at a much higher price, and would expect any competitor of Syniverse to make up the difference. This was not sustainable for competitors of Syniverse. 79. In addition to discounting bundled services, on information and belief, Syniverse further sequired that telecommunications carrier customers commit to multi-year deals in order to secure the discounts associated with the " bundle, " effectively locking up carriers for extended periods of time and making it commercially unreasonable for them to obtain messaging services from other ICVs. In particular, if a customer that was locked into a multi-year contract with Syniverse sought to purchase messaging services from tyntec, that customer would have to pay tyntec for messaging services and continue to pay Syniverse for those same messaging services as part of the bundle agreement. 722361814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 18 of 27 PagelD 18 80. As a result of Syniverse's anticompetitive tactics, carrier after carrier has given its business to Syniverse for messaging and Non-Messaging Services, because purchasing the two types of services together as part of Syniverse's bundle is the lowest price available to the carriers for each service. Syniverse's specific intent in bundling services has been to foreclose competitors in order to acquire and maintain a monopoly over the ICV market in the United States. Presently, Syniverse commands at least 70% of the market. 81. On information and belief, now that Syniverse has succeeded in acquiring such a large share of the market, it has retreated or intends to retreat from bundling its services and will begin (or has begun) offering its services on different terms. 82. Nevertheless, with this large a share, Syniverse has the power to force remaining competitors out of the market. Exercising this market power, Syniverse has the unmitigated ability to forgo the benefits of peering with tyntec in favor of reducing competition and inflicting harm on tyntec. E. Syniverse's Conduct Will Cause tyntec Irreparable Harm 83. As discussed above, tyntec invested millions of dollars in acquiring Iris's Peering Agreements in order to revive and preserve the existence of a third hub in the U. S. ICV market. 84. Syniverse's refusal to continue a " peered connection " arrangement with tyntec on customery bill and keep terms would destroy tyntec's ability to compete against Syniverse or to compete in the ICV market at all. 85. As Syniverse knows, tyntec recently signed a contract to provide ICV services to Shell Communications (" ShellCom "), a telecommunications carrier registered with the Commercial Mobile Radio Services Board. 36. If tyntec is unable to continue peering with Syniverse under the current terms of the Peer ing Agreements, tyntec will not be able to honor the terms of its contract with Shelicom, 18 722561314 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 19 of 27 PagelD 19 and ShellCom will have no choice but to do business with an ICV other than tyntec, namely Syniverse itself or SAP. 87. In addition, and as Syniverse is likewise aware, tyntec currently provides ICV services to the telecommunications company Flyp, Inc. (" Flyp "). 88. If tyntec is unable to continue peering with Syniverse under the current terms of the Peering Agreements, tyntec will be unable to honor the terms of its contract with Flyp, and Flyp will have no choice but to do business with an ICV other than tyntec, namely Syniverse itself or SAP. 89. As Syniverse knows, tyntec recently signed a contract to provide ICV services to more than twenty (20) wireless carriers (the " Twenty Carriers ") affiliated with a telecommunications company that supplies service providers with networking, integrated data and voice services, and telecommunications network solutions. 90. If tyntec is unable to continue peering with Syniverse under the current terms of the Peeling Agreements, tyntec will be unable to honor the terms of its contract with the Twenty Carriers, and the Twenty Carriers will have no choice but to do business with an ICV other than tyntec, namely Syniverse itself or SAP. 91. In addition to tyntec's existing customer contracts, several telecommunications carriers have indicated their desire to purchase messaging services from tyntec and are negotiating contracts with tyntec. 92. If Syniverse refuses to honor the longstanding arrangement with tyntec, tyntec's current and prospective customers will be forced to seek the services of other ICVs, namely Syniverse itself or SAP, and at higher prices. If this occurs, tyntec will suffer irreparable and 722561314 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 20 of 27 PagelD 20 incalculable damage to its reputation in the ICV market and will lose the goodwill that it has built up and continues to cultivate with existing and prospective customers. 93. In sum: (i) Syniverse's recent refusal to renew the Peering Agreements and its unwillingness to maintain a peered connection with tyntec on " bill and keep " terms; (ii) its prior, nearly identical, and ultimately successful effort to drive Iris Wireless from the ICV market; and (iii) the anticompetitive bundling practices described herein, demonstrate that Syniverse's goal is to drive tyntec, a smaller competitor, out of the ICV market, for the purpose and with the specific intent of reducing competition, achieving and maintaining monopoly power, and enabling itself to raise prices and foreclose competition. 194. As discussed above, Syniverse, which commands at least 70% of the ICV market, has used its monopoly power to destroy smaller competitors and decrease competition. Alternatively, to the extent Syniverse does not already possess monopoly power, there is a dangercus probability that Syniverse will achieve that power if left unchecked. 95. tyntec has no adequate remedy at law and will be irreparably harmed unless Syniverse is enjoined from refusing to continue the current bill and keep peering arrangement with tyritec. 96. The harm to tyntec is immediate because Syniverse is undermining tyntec's ability to attract and retain carriers as customers. Further, if the Peering Agreements are allowed to expire on April 7, 2017, tyntec's customers will lose the ability to interconnect with Syniverse's customers and will be forced immediately-or even preemptively – to seek the services of another ICV. 97. The harm to tyntec is also irreparable, because there is no way fully to measure all of the business that tyntec is losing as a result of Syniverse's threats and because tyntec's entire 20 722561814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 21 of 27 PageID 21 U. S. operation will be destroyed if tyntec cannot peer with Syniverse on customary bill and keep terms. The only way to make tyntec whole is to prevent the harm from being inflicted in the first place. FIRST CLAIM FOR RELIEF (Monopolization in violation of 15 U. S. C. & 2) 98. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 97 hereinabove as though set forth in their entirety. 99. Syniverse has monopolized the market for ICV services throughout the United States. Syniverse's conduct, alleged herein, has been undertaken to achieve and maintain such monopoly by, among other things, impeding and eliminating competition. 100. Syniverse has monopolized and is acquiring and maintaining monopoly power in the market for ICV services throughout the United States in interstate commerce in violation of Section 2 of the Sherman Act, 15 U. S. C. E 2.: 01. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and wil. continue to be so threatened unless Syniverse is enjoined from refusing to continue peering with tyntec, from engaging in other practices designed to foreclose and purposefully exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. SECOND CLAIM FOR RELIEF (Attempted Monopolization in violation of 15 U. S. C. & 2) 102. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 101 hereinabove as though set forth in their entirety. 103. Syniverse has the specific intent to monopolize the market for ICV services throughout the United States. Syniverse's conduct, alleged herein, has been undertaken to 21 722361814 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 22 of 27 PageID 22 achieve and maintain such monopoly by, among other things, impeding and eliminating competition. 104. There is a dangerous probability that Syniverse will succeed in obtaining monopoly power in the market for ICV services.: 05. Syniverse is attempting to monopolize the market for ICV services throughout the United States in interstate commerce in violation of Section 2 of the Sherman Act, 15 U. S. C. $ 2.. 06. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and wil: continue to be so threatened unless Syniverse is enjoined from refusing to continue to peer with tyntec, from engaging in other practices designed to foreclose and purposefully exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. THIRD CLAIM FOR RELIEF (Monopolization in violation of Fla. Stat. 8 542. 19) 107. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 106 hereinabove as though set forth in their entirety. 108. Syniverse has monopolized the market for ICV services throughout the State of Florida. Syniverse's conduct, alleged herein, has been undertaken to achieve and maintain such monopoly by, among other things, impeding and eliminating competition. 109. Syniverse has monopolized and is acquiring and maintaining monopoly power in the market for ICV services in the State of Florida in violation of Fla. Stat. S 542. 19. 110. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and will continue to be so threatened unless Syniverse is enjoined from refusing to continue 22 72256181. Case 8: 17-CV-00591-RAL-MAP Document 1 Filed 03/10/17 Page 23 of 27 PagelD 23 peering with tyntec, from engaging in other practices designed to foreclose and purposefully exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. FOURTH CLAIM FOR RELIEF (Attempted Monopolization in violation of Fla. Stat. 8 542. 19) 111. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 110 hereinabove as though set forth in their entirety. 112. Syniverse has the specific intent to monopolize the market for ICV services throughout the State of Florida. Syniverse's conduct, alleged herein, has been undertaken to achieve and maintain such monopoly by, among other things, impeding and eliminating competicion. 113. There is a dangerous probability that Syniverse will succeed in obtaining monopoly power in the market for ICV services.! 14. Syniverse is attempting to monopolize the market for ICV services throughout the State of Florida in violation of Fla. Stat. 8 542. 19. 115. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and wil. continue to be so threatened unless Syniverse is enjoined from refusing to continue to peer with tyntec, from engaging in other practices designed to foreclose and purposefully exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. FIFTH CLAIM FOR RELIEF (Tortious Interference With Contract) 116. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 115 hereinabove as though set forth in their entirety. 23 722561814 Case 8: 17-CV-00591-RAL-MAP Document 1 Filed 03/10/17 Page 24 of 27 PagelD 24 117. Syniverse is aware and has been aware at all relevant times that tyntec has contracts with different customers in the U. S. ICV market, including ShellCom and Flyp the Twenty Carriers (" Customer Contracts "). 118. Syniverse's intent in engaging in the anticompetitive conduct described herein, including its refusal to continue peering with tyntec on a " bill and keep " basis going forward is to cause the breach and termination of tyntec's Customer Contracts. 119. If tyntec is unable to peer with Syniverse under the current terms of the Peering Agreements, neither tyntec nor its customers will be able to honor the terms of the Customer Contracts and tyntec's customers will have no choice but to do business with an ICV other than tyntec, namely Syniverse itself or SAP. 120. Syniverse's stated intent in terminating the Peering Agreements is to foreclose tyntec entirely from the market for ICV services and from competing for customers in that market. 121. There is no legitimate business justification for Syniverse's conduct, which has the purpose and effect of excluding or destroying competition. 122. But for Syniverse's interference, there is a reasonable likelihood that these telecommunications carriers would continue to purchase ICV services from tyntec pursuant to the term is of the Customer Contracts. 123. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and will continue to be so threatened unless Syniverse is enjoined from refusing to peer with tyntec at no charge, from engaging in other practices designed to foreclose and exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. 24 7225618 Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 25 of 27 PagelD 25 SIXTH CLAIM FOR RELIEF (Tortious Interference With Business Relations) 124. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 123 hereinabove as though set forth in their entirety. 125. Syniverse is aware that its conduct, as described herein, has interfered and will continue to interfere with prospective business relations between tyntec and the carriers who have indicated their desire to enter into contracts with tyntec. 126. Syniverse's intent is to foreclose tyntec entirely from the market for ICV services and to prevent tyntec from gaining any additional customers or business in the ICV market. 127. There is no legitimate business justification for Syniverse's conduct, which has the purpose and effect of excluding or destroying competition. 128. But for Syniverse's interference, there is a reasonable likelihood that these telecommunications carriers would purchase ICV services from tyntec. · 29. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and will continue to be so threatened unless Syniverse is enjoined from refusing to peer with tyntec at no charge, from engaging in other practices designed to foreclose and exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. SEVENTH CLAIM FOR RELIEF (Unfair Competition) 130. tyntec repeats, realleges and incorporates by reference the allegations set forth in Paragraphs 1 through 129 hereinabove as though set forth in their entirety. 131. Syniverse's conduct as described above, including its refusal to continue peering with tyntec at no charge, its bundling of messaging and Non-Messaging Services and its locking 25 722561814 Case 8: 17-cy-00591-RAL-MAP Document 1 Filed 03/10/17 Page 26 of 27 PagelD 26 customers into multi-year contracts, is deceptive, fraudulent, unfair and unlawful, and constitutes unfair co npetition under the common law of the State of Florida. 132. As a direct and proximate result of the foregoing, tyntec has been injured in its business and property, is threatened with immediate and irreparable additional loss and damage, and will continue to be so threatened unless Syniverse is enjoined from refusing to continue peering vwith, from engaging in other practices designed to foreclose and exclude tyntec from the market, and from engaging in the other illegal conduct alleged herein. PRAYER FOR RELIEF WHEREFORE, tyntec prays that judgment be entered: A. Enjoining Syniverse from refusing to peer with tyntec at no charge; 13. Enjoining Syniverse from taking any action or threatening to take any action against telecommunications carriers that use tyntec's services; C. Enjoining Syniverse from engaging in any other exclusionary practices that directly or indirectly foreclose tyntec from providing ICV services to carriers;!). Alternatively, awarding tyntec damages in an amount to be determined, and trebled as provided in Section 4 of the Clayton Act, 15 U. S. C. E 15 (a); 8. Awarding tyntec the cost of this suit, including a reasonable attorney's fee, as provided in Sections 4 and 16 of the Clayton Act, 15 U. S. C. 8 $ 15 and 26; and F. Ordering Syniverse to be divided into two or more viable, independent, and separately-owned firms offering ICV services in competition with one another. G. Granting such other and further relief as the Court deems just and proper. 26 72256181. Case 8: 17-cv-00591-RAL-MAP Document 1 Filed 03/10/17 Page 27 of 27 PagelD 27 Dated: March 10, 2017 BURR & FORMAN LLP Β. Ομοί POut Ronald B. Cohn Florida Bar No. 599786 Daniel P. Dietrich Florida Bar No. 934461 201 North Franklin Street, Suite 3200 Tampa, Florida 33602 Telephone: (813) 221-2626 Facsimile: (813) 221-7335 rcohn@burr.com ddietrich@burr.com Attorneys for Plaintiffs tyntec Group Ltd. and tyntec Inc. OF COUNSEL: Joseph De Simone (to be admitted pro hac vice) Richard M. Steuer (to be admitted pro hac vice) Michelle J. Annunziata (to be admitted pro hac vice) MAYER BROWN LLP 1221 Avenue of the America New York, New York 10020 Telephone: (212) 506-2500 jdesimone@mayerbrown.com rsteuertamayerbrown.com mannunziata@mayerbrown.com 27 722561814 2 5