In an antitrust lawsuit filed yesterday in the U.S. District Court for the Western District of North Carolina, SmartSky Networks accused Gogo Business Aviation of “illegal monopolistic practices in the air-to-ground (ATG) broadband inflight connectivity market for business aviation…The lawsuit seeks substantial damages potentially exceeding $1 billion.” 

Gogo’s alleged behavior “ultimately forced its only ATG competitor out of the market,” according to the lawsuit. SmartSky shut down its ATG network on August 16 without warning customers that their airborne connectivity was suddenly ending.

“The complaint is a highly inaccurate representation of Gogo’s behavior and does not confront the reality that SmartSky failed as a business, despite more than half-a-billion dollars of backing from numerous well-heeled investors,” Gogo Business Aviation executive chairman Oakleigh Thorne told AIN. “This is just a last-ditch effort by SmartSky’s creditors to recover some money on what amounts to a bad investment.”

Network developer Apcela said in October that it was acquiring SmartSky, and the transaction was expected to take place by year-end. That transaction has not yet occurred, according to Mark Casey, Apcela founder and CEO. “We are acquiring the SmartSky ATG Network from SmartSky Networks. We are not a party to this lawsuit. SmartSky Networks is pursuing these legal claims.”

SmartSky had gained only a 2% share of the ATG market, the lawsuit claims, “before being forced to cease operations despite having a far superior product.” The company raised more than $700 million in investor capital, and its ATG service began in July 2022. According to SmartSky, “without competition, Gogo returned to a 100% ATG monopoly position, with its legacy systems as the only ATG solution currently available for business aviation customers in the U.S.”

The lawsuit accuses Gogo of violating the Sherman Act and Clayton Act, the Unfair and Deceptive Trade Practices Act, and North Carolina state tort laws. It claims “that Gogo engaged in predatory pricing, misleading advertising, and exclusive dealing agreements to maintain its monopoly position in the ATG market.”

Despite what SmartSky said is “a superior technology…SmartSky argues that it was systematically undermined through a multitude of deceptive practices, including Gogo's misrepresentation of its own technology, the implementation of illicit below-cost pricing strategies, and ‘vaporware’ promises of a future 5G internet solution that has still yet to materialize.”

According to the lawsuit, “Knowing that SmartSky was going to beat it to market and desperate to prevent SmartSky from capturing its market share, Gogo launched a massive misinformation campaign to convince the market (including MROs/dealers, aircraft manufacturers, end-users, and investors) that Gogo’s ‘Next-Generation’ network was always just around the corner. But each time its fake launch date came near, Gogo delayed it just a little while longer. This pattern went on for years and continues today.”

Gogo completed its 5G service tower installations in October 2022 and initially said that service would begin in 2023, but that has been repeatedly delayed by issues around delivery of 5G chips. The 5G service is now expected to begin in 2025.

In March 2022, SmartSky filed a patent infringement lawsuit and sought a preliminary injunction to block Gogo Business Aviation from rolling out its 5G service, one of a series of lawsuits that SmartSky had previously filed against Gogo. An intellectual property case filed in Delaware is still set to go to trial in April next year.

An example of the alleged deceptive practices (a claim for tortious interference with prospective economic advantage), according to the antitrust lawsuit, is a competition between SmartSky and Gogo for a fleet operator’s business.

Although SmartSky had already won the bid and was close to finalizing the agreement, “Gogo interfered with that relationship and prevented SmartSky and the fleet operator from entering into a contract. Through its wrongful actions described herein, Gogo induced the fleet operator not to enter into an agreement with SmartSky, and SmartSky eventually was forced to close its doors and cease business operations.”