Jika Inc. v. Loop Solutions, Inc., No. 2:26-CV-05530-JAK
(MARx), 2026 WL 2138604 (C.D. Cal. Jul. 20, 2026)
Jika, d/b/a Skio & Recharge, sued Loop for false
advertising/tortious interference/unfair competition/trade libel for ads it ran
in response to Recharge’s acquisition of Skio. [Relatedly.] The
court denied a preliminary injunction.
Recharge, Skio, and Loop each provide apps for e-commerce
subscription management on the Shopify platform to enable Shopify merchants to
turn one-time retail customers into long-term subscribers. According to its
advertising materials, Recharge “power[s] 71% of subscriptions sold on Shopify
stores.” Skio provides similar services for more than “one thousand brands,”
including various “well-known direct-to-consumer” brands. It offers a
“subscription management platform” that enables Shopify merchants to place a
“subscribe and save” widget on their product pages. Skio’s app is “integrate[d]
with Shopify’s native checkout and subscription” services. E.g., Skio offers
merchants a configurable flow so that when a subscriber clicks “cancel,” the
merchant can offer discounts, free gifts, pauses, product swaps or different
frequencies to try to keep them; it also provides dashboards that provide
information about their subscriptions, including how subscriptions are growing,
what the churn rates are, and which cancellation offers are working.
Loop “offers many of the same products and services to the
same category of merchants” as Skio, including “subscription management,
customer portals, cancellation flows, dunning and payment recovery tools,
bundle builders, and API integrations.” The parties agreed that Loop and Skio
compete, but not that Loop and Recharge did, though there was evidence that
customers view Recharge, Skio, and Loop as interchangeable and competing
services. “For a large business processing 10,000 subscription orders per
month, with an average order value of $50, subscription-management costs would
be $7599 per month for Skio, $9099 per month for Recharge, and $4149 per month
for Loop.”
Loop’s declarant stated that its customers are
“sophisticated market players” who typically “engage in thorough research
regarding” platform choices. He declared that it “can take weeks or months of
back-and-forth negotiation” before a merchant chooses to use Loop for its
subscription-management needs. Skio’s declarant said things consistent with
this, e.g., one potential Skio merchant evaluated Skio for a month before
making a purchasing decision, and the pricing was consistent with requiring reasonable
consumers to be careful.
Loop also submitted evidence of customer dissatisfaction
with Recharge’s app: more than 5% 1-star reviews online, generally concerning
Recharge’s pricing and customer service. “Skio’s Shopify reviews reflect that
many Skio merchants reported that they elected to migrate from Recharge to Skio
based on problems with Recharge’s app.” Loop has less than 0.75% 1-star reviews
out of 670 total reviews.
Shopify bans app developers from publishing an app that is
“identical to other apps you’ve published to the Shopify App Store.” “Recharge
has acknowledged that its acquisition of Skio could raise questions about the
application of these policies.” A Loop affiliate’s declarant stated that it is
“very common for acquiring companies to consolidate or eliminate products that
are redundant with their own,” citing industry and academic publications. He
specifically identified “killer acquisitions” in the Shopify industry. When the
acquisition was announced, Recharge and Skio stated that nothing would change
immediately.
But some worried, and Loop fed that worry despite Recharge’s
“no change until 2028” guarantee stating “no Skio merchants will be forced to
migrate to Recharge” and that there’d be no pricing change.
Loop argued that it merely “used the market uncertainty
created by the acquisition” as an opportunity “accurately [to] inform[ ]
merchants” about their choices post-acquisition and what “typically happens in
acquisitions of technology platforms.”
“Shortly after the acquisition announcement,” Loop “posted a
site-wide banner” across its website: “Recharge acquired Skio for $105M. Loop
is now the second largest Shopify subscription app. Your choice just got
simpler: Loop or Recharge. Book your priority migration slot.” Plaintiffs
argued that this was false because it informed customers that “Skio is no
longer a viable standalone platform” when, in fact, “Skio continues to operate
as a standalone product,” its customers are “not being migrated to Recharge”
and there are “no plans to deprecate Skio.” It made similar statements on its
blog:
Recharge’s official position: both
platforms continue to operate as normal. Nothing changes immediately.
But here’s what historically
happens when a platform gets acquired by its largest competitor:
The acquiring company says
“business as usual” for 6-12 months. Then feature roadmaps merge. Then pricing
consolidates — usually upward. Then the smaller platform’s app gets sunset or
rolled into the acquirer’s product. The merchants who waited get migrated on
the acquirer’s timeline, not their own.
Skio merchants now face a set of
questions nobody has answers to yet. Will Skio’s $599/month pricing stay? Will
the passwordless login and clean portal UX survive integration into Recharge’s
architecture? Will the small, responsive support team that Skio reviewers
praised remain intact — or get absorbed into Recharge’s support infrastructure,
which its own reviewers have documented as slow and unresponsive?
What that uncertainty looks like in
practice depends on where you stand today.
If you’re currently on Skio:
Your platform’s future is now
controlled by Recharge.
...
If you’re currently on Recharge:
The same pricing escalation and
support patterns documented in 116 one-star reviews haven’t changed. They’ve
gotten bigger.
...
If you’re evaluating platforms for
the first time:
The decision just got simpler. It’s
Loop or Recharge.
[The blog post went through various revisions; I smell some
AI.]According to Loop, 45 unique users visited the Blog Post, of which 22 were
users from the United States, in comparison to 6994 unique visitors to Loop’s
website overall in the same period.
Loop also allegedly targeted Skio’s customers in outreach
with similar statements.
It also used a comparison table—which it argued had been
around for a while and wasn’t posted in response to the acquisition—marking
numerous Skio features as unavailable (x) and those same features for Loop as
available (✓).” It allegedly falsely claimed that Skio lacked features
such as “Passwordless login via email,” “One-click checkout with exclusive
offers,” and “Proactive card expiration alerts.” The meaning of the comparisons
was contested, though Loop admitted “error” in claiming that Skio lacked “OTP-less
authentication” and “Passwordless login via email.” (Other Loop ads accurately attributed
a passwordless login feature to Skio.) The table was removed before litigation
began. [Again, I wonder if this was AI error; it’s good that Loop doesn’t pretend
that the source of the error mattered.]
Skio and Recharge allegedly “received over 10 inquiries from
Skio merchants expressing concern about Skio’s future, pricing, support
continuity, and feature availability” following the acquisition. One customer
informed Recharge that it had “received unsolicited emails from Loop that
contained no identifying signature, footer, or other disclosure indicating that
the messages came from Loop.” Because the email stated that the sender “wanted
to get them started on migrating,” the customer “initially believed the emails
were coming from Recharge and called Recharge expressing concerns about Skio’s
post-acquisition future.” Five large
merchants allegedly “reported concerns that Loop representatives had been
making statements about Skio and the Recharge acquisition consistent with the
messaging in” the written campaign.
Plaintiffs also submitted declarations that customers were
hard to acquire. A potential customer allegedly wrote: “We were really
impressed with Skio and felt a good level of alignment between Skio and
[Customer]. However, the news that Skio merged with Recharge did catch us
really off-guard! We felt a bit torn since we had pretty much disregarded
Recharge completely by that point as we didn’t enjoy the sales process, and the
pricing was completely unrealistic for our brand. At this moment, we are
progressing with Loop subscriptions, as we felt they also aligned with us .…” It
didn’t reference the Loop ads.
Plaintiffs argued that Loop made literally false claims that
Skio would be sunsetted, leaving merchants with a binary choice between
Recharge and Loop, by claiming that, post-acquisition, “smaller platforms
historically ‘get[ ] sunset’ ”; by stating “Your choice just got simpler: Loop
or Recharge”; and by telling customers they were “Back to square one for
[their] platform future.”
First, under 9th Circuit precedent, “the nature,
characteristics, and qualities of [a product] under the Lanham Act are more
properly construed to mean characteristics of the good itself ....” Licensing
status and claims about the date on which a product was first marketed are not
actionable for this reason, and likewise the “sunsetting” statements didn’t refer
to any inherent quality or characteristic of the parties’ services. “Rather,
the Sunsetting Claims only refer to market structure and competitive dynamics
in the industry, which are analogous to the ‘supply and demand phenomena’ that
courts have found do not state a claim under § 43(a).”
Even if they were actionable in principle, nothing Loop said
was literally false. The blog post truthfully reported that plaintiffs claimed
that nothing would change immediately, but then pointed to “historical[]”
trends. A prediction about future events “is not an actionable statement of
fact as a matter of law.” Plaintiffs’ own claims didn’t show that there was no
risk that Skio would be sunset; their own public-facing statements recognize
that there is some uncertainty about the future of Skio: a LinkedIn post said, “[F]rankly,
we don’t know what skio or recharge or (maybe even) some new platform is gonna
look like in a year and a half.” Even if the rule about future predictions only
applies to good-faith predictions, there was no evidence of bad faith.
For claims like “Your choice just got simpler: Loop or
Recharge,” this wasn’t literally false. “One reasonable interpretation of these
claims is that customers now have two choices with respect to independent
service providers in the marketplace.” This was plausibly literally true:
Plaintiffs’ own announcement described Skio as a “Recharge company” and states
that “Skio is joining Recharge.” [I would also say that this is the kind of
claim often deemed puffery under similar circumstances.] Also, because
consumers typically contract with service providers for longer periods, the
competitive “choice” and “decision” “can reasonably be construed to refer to
long-term market structure and competitive dynamics, rather than current
conditions…. Consistent with that, many of the challenged advertisements frame
customer choice in terms of long-run impact, rather than immediate market
conditions.” That meaning was not literally false because plaintiffs have not
committed to maintain Skio as a long-term option for consumers beyond 2028.
The only “necessary” implications of the claims were that plaintiffs
might not honor their nonbinding commitment to maintain Skio through 2028 and
that Skio’s future remains uncertain beyond that point in time, And these were
not matters of verifiable fact.
Claims that Skio would raise prices/worsen customer support:
Same basic analysis. “Each advertisement, read in its full context, includes
specific qualifiers,” such as “Not sure if all or even anything would happen
with you but this is what generally happens.”
Comparison table: Loop conceded that the password claims
were literally false, and § 43(a) is a strict liability cause of action. But
there wasn’t sufficient evidence of materiality. There were no surveys or
direct evidence from consumers that the features highlighted in the comparison
table were ones about which they cared when making decisions. “[N]umerous
courts have found an absence of materiality in Lanham Act false-advertising
cases when the target audience consisted of sophisticated individuals who were
unlikely to be swayed by promotional materials.”
The rest of the claims went the same way. Trade libel
requires actual damage, and that hadn’t been shown with respect to the comparison
table, given the absence of evidence that any specific customers were exposed
to it or that they cared about the password claims as opposed to other factors.
The balance of equities and the public interest also
disfavored a preliminary injunction because it would bar Loop from “suggesting”
or “implying” that Skio’s product and features may change in various ways due
to the acquisition. “[T]his would impose a limitation on marketplace
competition that could otherwise benefit customers. It would, in effect,
preclude Defendant from responding to Plaintiffs’ nonbinding commitment to
maintain Skio as an independent service in the marketplace.”
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