Niemann's $100 million lawsuit (with video)

by Albert Silver
6/28/2023 – Readers will recall the scandal that shook the chess world, when Magnus Carlsen stated he thought US GM Hans Niemann had cheated against him. In spite of endless amounts of speculation and hand-waving, no evidence was ever produced, and Niemann struck back with an eye-watering $100 million-dollar lawsuit. The verdict is in. Updated with video.
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When Magnus Carlsen up and left the 2022 Sinquefield Cup, explaining later that he felt his opponent Hans Niemann had cheated against him, it rocked the chess world. There is no question it was the chess story of the year, gravitating to mass media all over and no publication failed to bring it up in one context or another. The author of these lines was even asked to speak to an English-spoken radio channel in Dubai to explain what it was about. Yes, really.

Lines were drawn and some spoke in his favor, 'innocent until proven guilty', and others against, 'once a cheat, always a cheat', based on past misdeeds online in his teens. While no end of statistical data was produced by experts on all ends of the spectrum, such as famed anti-cheat expert Ken Regan, or reams of charts published by Chess.com, in the end that was all it was. Statistics and circumstantial evidence. Nothing remotely concrete was ever produced. This is not to side with any point of view, these are simply the facts.

Then, months later, on October 20th, 2022, Hans Niemann struck back with the astounding lawsuit for $100 million against Chess.com, Magnus Carlsen, the Play Magnus group, and ... Hikaru Nakamura. Nakamura's name in the lawsuit was really the strangest, since while he has the largest following of any chess streamer bar none, and felt that Niemann likely cheated, it was no more damning than the rest of the world at large giving their opinions. He was not the one who had accused Niemann, nor one who went out of his way to bring up reports and data to condemn him. A high profile pundit for sure, but just a pundit nonetheless. 

The accusation: "...unlawfully colluding to blacklist him from the profession to which he has dedicated his life." and sought $100 million in damages from each and every party cited. A lot of proverbial ink has been spilled on this topic by now, and you can find links to numerous articles posted here at ChessBase News, or read the original suit filed here.

If one takes the time to read the full decision by the court on the dismissal, one will be quite surprised on the deciding factors that led to the dismissal. One might expect lack of proof, proper evidence and more, and certainly these are mentioned, but one of the deciding factors was the complaint claiming 'antitrust injury'. The court explains that on this point, it all falls apart.

Here are the material points and comments, which even a non-lawyer can readily understand:

“As the Supreme Court has noted repeatedly, Congress enacted the antitrust laws to protect competition, not competitors.” Thus, to recover damages under the Clayton Act for a  violation of either § 1 or § 2 of the Sherman Act, “a plaintiff must prove the existence of antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” This requires that the plaintiff “be the target of the anticompetitive activity, not one who has merely suffered indirect, secondary, or remote injury.” (p.22)

and

"Niemann fails to plausibly allege an antitrust injury. Again, Niemann defines the Competitive Chess Market as “professional chess tournaments and online recreational chess platforms.” SAC at ¶ 47. But Niemann’s alleged injuries are not connected to any harm to competition in this market. Indeed, Niemann does not even compete in this market as he operates neither a professional chess tournament nor an online recreational chess platform." (p.23)

It is clear. Even had all the parties accused truthfully colluded, as he claimed, to cut him out of the chess competing world, it would not count as an antitrust injury. Antitrust is where he is competing against Chess.com as an event organizer or potential rival as a recreational chess platform. This is not the court's interpretation only, it is the result of Niemann's definition of the Competitive Chess market in which he has suffered an antitrust injury as “professional chess tournaments and online recreational chess platforms.” Since he competes as neither, he cannot have suffered an antitrust injury.

There was also the question of whether Hans Niemann had suffered injury as a result of his ban from Chess.com, and simply put: "can they do that with impunity?" Again the claim of monopolization looms to defeat his own complaint.

"The parties devote much of their briefs to debating whether the alleged group boycott of Niemann on the Chess.com platform should be considered a per se, or presumptively unreasonable, restraint or whether it should instead be analyzed under the so-called “rule of reason,” under which the Court must consider the actual effect of the restraint on the relevant market.

The Court agrees with Defendants that Niemann’s ban from Chess.com for alleged cheating is likely subject to the rule of reason. And as facially neutral rules that prohibit cheating are essential to promote fair competition and to preserve the integrity of the game,” Chess.com’s enforcement of its anti-cheating rule would not constitute an illegal boycott." (p.26)

(...)

"As noted above in the discussion of antitrust injury, Niemann has not plausibly alleged that Chess.com’s enforcement of its rules—whether fair or not as applied to Niemann—adversely affected competition among the professional chess tournaments and online recreational chess platforms that comprise the Competitive Chess Market.

Niemann has not plausibly alleged that the ban was intended to or did result in anticompetitive effects in the Competitive Chess Market." (p.27)

The federal court claimed points 3 and 4 of the original complaint were dismissed with prejudice, meaning they can never be retried, but other points fell out of its jurisdiction and can be refiled under state law. According to the WSJ, that is exactly what is happening, and Niemann's lawyers have stated their intention to refile the suit for slander and libel under state law.

Video

Links:

Born in the US, he grew up in Paris, France, and after college moved to Rio de Janeiro, Brazil. He had a peak rating of 2240 FIDE, and was a key designer of Chess Assistant 6. In 2010 he joined the ChessBase family as an editor and writer at ChessBase News. He is also a passionate photographer with work appearing in numerous publications, and the content creator of the YouTube channel, Chess & Tech as well as the author of Typing Tomes, a powerful typing program.

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shivasundar shivasundar 7/5/2023 08:08
@DrRegan, in case it was not clear - you have managed to catch the most egregious cheaters - both *OTB and online* - just not all of them.
shivasundar shivasundar 7/5/2023 06:00
@fgkdjlkag "I don't understand why FIDE didn't publish their ethics report. " My guess is the CEO-lawyer of FIDE is scared of Hans appealing to CAS (The Court Of Arbitration for Sport - sort of a 'world court' for sports), Lausanne, Switzerland, where FIDE will lose - just like Karpov won unspecified damages AND sanctions against it in the late 90's. [I believe even Susan Polgar won against it... can't remember the details though]. Now WHY did Anand not do the same, is something I've always asked myself :-) [him not being part of the Prague agreement, etc.. and THAT reputational damage!! The YEARS of life (he only had his son close to when he was 40), world title prestige (#2 or #3 in the world for ~15 years BEFORE 2008 - the *racism* against him by Kasparov AND FIDE! The 'failed negotiations' for a rematch from 1998-1999, the 'pushover' by the *other K* AFTER he won in 2007!), money, etc. lost due to 'non-recognition' as an all-time great in the early 2000s...] The man is amazingly friends with *both (all 3 I think) Ks* :-)

They cannot 'anger/appear to upset even' Carlsen because that's 50% of where chess gets its money from - wherever he participates, basically!! :-)

Bringing Carlsen back to the WC cycle wud also get affected due to this!! :-)

Like they say "damned if you do, damned if you don't!" :-)....
shivasundar shivasundar 7/4/2023 09:28
@Albert, yes, we all obviously saw that Neimann appeals pretty quickly. However, when I read the chesscom article, it was (to me) surprisingly well-adjusted/balanced reportage. The facts I specified from the full lawsuit PDF checked out . yes the title obviously was designed by their legal/marketing team. That wud get search engines to pick it up, and do 'that' work of repairing 'their reputational damage' - is their calculation I think - haha :-).

The reportage was also more detailed, but I liked your article overall as well. Thanks for the forum also [I know Dr. Regan reads this, as does Fred Freidel! Another 'power/money pole' (albeit a little smaller one, admittedly) in the chess world - ChessBase!]

Love (and respect deeply) Dr. Regan, but people cannot be right - just because of statistics!! :-) I mean, you have caught the 'most egregious' cheaters (like in cricket: the Hawk Eye, Snicko, Hot Spot and other tech - can 'catch' the 'so called worst howlers' in umpire decisions). But no tech, even in cricket - is perfect. I think the tennis 'line calls' are similar... there is no such thing as perfect in the world of 'cheat detection' in sport.

Thanks to your work on the online games though. I have only one q to you though: how will you fight the obvious 'appearance of bias' as an American in case you are called to testify *for Niemann* at CAS?! Or even for FIDE... even in American courts?!

I really wish, Niemann, AND Carlsen *both* express deep anguish, sorrow, and a very detailed apology to the chess world - Niemann for his online cheating [and reveals his full extent of it], and Carlsen for what he did!! I also believe Carlsen owes some damages to Niemann. Regarding letting Niemann back onto chesscom, I will just stay silent....
arzi arzi 7/2/2023 11:05
To Albert Silver:

Relieved? All? Niemann too? Why should people be relieved at the outcome of this event? Proof that anyone can say anything with no consequences? Thanks, I'm also really relieved too, just like chess.com!
Albert Silver Albert Silver 6/30/2023 10:14
@arzi - The chess.com piece is essentially is a list of thank yous and how relieved everyone is. The fact is that Niemann's lawyers have already announced they are refiling the suit, for libel and slander under state law, minus the antitrust complaints. You can see this development in the WSJ.
GR2 GR2 6/30/2023 11:05
I hope the St Louis Rapid and Blitz and the Sinquefield Cup events include him in their fields later this year.
arzi arzi 6/30/2023 06:13
fgkdjlkag: "In any case, a lawsuit was not a smart decision from Niemann. What tournament organizer is going to want him? And he cheated online a lot, per chess.com. With that kind of history he shouldn't cry foul."

In fact, it was the only possible decision to do by Niemann. Besides, the issue was Carlsen's and chess.com's cooperation against Niemann. They had a financial and business relationship with each other before, during and after the game. The fraud that Niemann admitted had taken place BEFORE this event, which is when the actual fraud accusations started. Carlsen could have refused to play against Niemann, but he chose to play and lost his game. Only after the lost game did the public accusations from both Carlsen and chess.com begin. How long should Niemann have waited for FIDE's decision? A year? 10 years? Eternity?
fgkdjlkag fgkdjlkag 6/30/2023 03:01
I don't understand why FIDE didn't publish their ethics report. Hans could appeal so if FIDE wants to wait for everything to be decided it will be a long time. And the chess world should have some data/evidence/a conclusion regarding possible cheating.

In any case, a lawsuit was not a smart decision from Niemann. What tournament organizer is going to want him? And he cheated online a lot, per chess.com. With that kind of history he shouldn't cry foul.
arzi arzi 6/29/2023 06:43
chess.com:"Hans Niemann's $100 Million Defamation Lawsuit Dismissed."
chessbase:"Niemann's $100 million lawsuit...Niemann fails to plausibly allege an antitrust injury"

Which news is factually correct? One of these two news is like a fake news distributed by Russia to its own citizens and the whole world. Cheers!
Green22 Green22 6/29/2023 02:36
He beat Carlsen on and off day. Get over it. They are scanned and re-scanned for any electronic devices before entering the playing hall. Carlsen is human. Hans beat him fair and sq. or Carlsen would have the proof by now and he does not. He took a hissy fit and thats that. Hans is still winning he went from 35 in the world to 50 something. IN THE WORLD, so how is he cheating OTB again... good luck with proving that when now he;s being double and triple checked..
shivasundar shivasundar 6/29/2023 12:49
The word 'recreational' IMHO has been the bane of the petition. I mean, 'professional' would have been better as a definition for online chess, because there is, in the last 2 years, equal if not more money to be made here. Certainly, online platforms have payouts - and the "top-100" have increasingly played there. Wherever there is money, it is professional and affects players' reputation and hence livelihoods [ratings be damned - this is what the court has missed by thinking "oh unrated by FIDE, therefore just 'hobby chess' "].

"And Niemann provides little to no
information about the relative strength of Chess.com’s or Play Magnus’s share of this
portion of the market." [p.29] The legal team could have/would now easily - provide enough financial statements, prize money details, merger details, etc. to provide a full financial appreciation of the market! Surprising they didn't do so in both amended versions!!

Come on guys (Niemann's legal team), lichess.org is non-profit.. they don't conduct tournaments as well. Not sure what dollars n cents were provided.... Where else is money in the chess world?!: 2 billionaire benefactors in the US, and then chess.com. That's it. [Yes, some corporates now coming in, in Europe, and private player-sponsors in India - irrelevant to the whole market/money still mainly goes to players mainly the top-100 mostly]. They would *do well* to also focus on the General Atlantic investment in chesscom that gave them a lot of private equity money (before the Play Magnus deal - my suspicion is: this is *why* they invested in the first place)!
shivasundar shivasundar 6/28/2023 10:24
@Albert: how is "[it] clear"?!!: "Indeed, Niemann does not even compete in this market as he operates neither a professional chess tournament nor an online recreational chess platform." Simple question to the judge, why take Niemann's definition? That's quite convenient, why not take the opinions of (neutral) experts?!

And certainly, are you (and the judge) saying, Albert that chess organizers (like IOs) are the only *and the biggest* money spinners in the chess world? :-) [Neimann *never claimed* to be an organizer!] This simple 'application of the mind' by the judge, would have led him to properly evaluate the chess market, and the players!

We all know the players make >80% of the money in the official world championship (small portion retained by FIDE). We all know that the (nowadays) million+ dollars of money in several serious tourneys go to the players directly. Corporate sponsors are also bringing in money to the game and players, (I read somewhere FIDE will take even less of a cut). It is agreed that chesscom makes a little bit of money in general in the chess world - off of tournaments, that's all. That's not where their money comes *from* though: it's from the eyeballs, subscriptions, fees, etc. and some deals with FIDE nowadays I'm guessing (broadcasting, etc.)

The top-100 players of the world is the chess market - them, their wealth (mainly top-20 or so), influence and power.
shivasundar shivasundar 6/28/2023 10:09
@Albert Silver, now my responses to your article. It is actually surprising that the judge has been *pretty dense* in this para you quote: This requires that the plaintiff “be the target of the anticompetitive activity, not one who has merely suffered indirect, secondary, or remote injury.”

I strongly disagree with that!! I mean, everybody in the chess world knows, for example, that Niemann will likely never in the near future be invited to any of the top-flight tournaments (GCT, CCT, and Tata, Norway, all chess.com tournaments) which promise $100k plus earnings in a year. He will likely NOT buy his home using chess as a career. While Carlsen, Danny and Erik are laughing their way to the bank with $50mil+ paydays saying "oh I donno, that weird guy, he can be a teacher or a trainer I guess", now with this dismissal!
Somebody should have educated the judge on the "chess world/chess news" - in India we have the concept of the Amicus Curiae (Friend Of the Court) who is an expert but reports to the judge - in this case a strong 2600+ European GM may be (to preclude the bias of a US grandmaster).

So yeah- Neimann is suffering DIRECTLY, not indirectly or 'remote injury'! :-)
shivasundar shivasundar 6/28/2023 10:08
Also @Albert, I disagree with this [that line of thinking] to some extent: "A high profile pundit for sure, but just a pundit nonetheless. "

First off, let us remember as well that big social media personalities with million+ followers viewers on their accounts have an outsized influence (*bully pulpits*) on not only lay viewers but good chess players as well. Reputational damage is a serious thing. May be Naka did not *intentionally* hurt Niemann, but unintentionally he certainly did. I mean, he describes his own profession as a "full time streamer/entertainer/semi-retired chess player". So, it is his full time job. Now, this is where educational levels come in. We think big CEOs, top-flight chess players are super intelligent and they can solve the world's problems, and can *always be right* about every opinion. But don't forget, he "jumped the gun" clearly in the streams and said something like "I donno, man... looks shaky" while a bunch of people in the live chat (JUST like this thread in the past) are screaming "cheater, cheater, cheater". Even ONE word like that - immediately gets put into a youtube Short, marketed by twitter by his team in the night - while this guy sleeps - I donno - after 10 hours of streaming!

This ALSO contributes to chesscom saying "oh none of the top-100 players want Niemann, they dont like him! So we dont want him in this event!" [basically their argument for banning him!] All for what, he cannot really talk though his thoughts after a tough game?! How many chess players even fluently talk English! Hope people clearly understand this... I am not blaming Naka (like him - but just a high school pass-out - like many top CEOs :-)), but he could have put out some video of "may be I was wrong" in some version - instead they all *shut up* after a lawsuit!

We all make mistakes Naka, you should know that at least from any game you lost!
shivasundar shivasundar 6/28/2023 09:27
Now, I hope FIDE finally releases the Ethics report - since I know this has been on hold "till October" just for this. I mean, please don't have a lawyer as the CEO of any serious organization (much less FIDE)!
shivasundar shivasundar 6/28/2023 09:24
It is important to note that, out of the 6 counts, only 2 were dismissed "with prejudice" - meaning Hans will appeal to state, if not further fora.

Claims dismissed without prejudice: slander, libel, tortious interference with business expectancies, and civil conspiracy (according to the chess.com article).

Yes, the Sherman act provisions under US defamation law are a joke [the ones dismissed with prejudice] (like everybody knows - just like Indian defamation law, btw with both civil and criminal defamation). But this only strengthens the case for appeal - because most claims have been dismissed without prejudice. Glad the judge was wise there!

Serious enough claims, still.
calvinamari calvinamari 6/28/2023 08:58
I don't doubt that you are not a legal expert. Among other things, Carlsen did not accused Niemann or anyone else of a "crime." Cheating at chess is not a criminal offense and nobody ever suggested that. Nor did Carlsen do anything "without evidence." There is plenty of evidence. Admitted past cheating on chess.com is valid evidence. Chess.com's report document cheating beyond what Nieman admitted to is valid evidence. Even Niemann's reputation as a cheater before the episode in St Louis is valid evidence. Being unable explain your game in a postmortem interview is valid evidence. It may not be incontrovertible evidence, but it is evidence.

When did metaphysical certitude become the standard for action and opinion? Most human actions are taken based on evidence that is less than incontrovertible. If you heard from others that the food at a restaurant was bad, you very likely will not choose to go there when you have the option to go to restaurants with a excellent reputations. You might even tell others why you choose not to eat at the restaurant with the bad reputation -- a perfectly reasonable thing to do notwithstanding the lack of incontrovertible proof that the restaurant is bad. Your choice not to patronize the restaurant harms the restaurant economically, as does your telling others the reason for your choice. But it is ludicrous to suggest that you accused the restaurant of a "crime" or that your actions constitute "behaving in an unacceptable manner."
lajosarpad lajosarpad 6/28/2023 04:53
I'm not a legal expert, but I know that accusing someone of some crime without evidence is bad conduct. So, if the current lawsuit was legally unsound, then the legal experts were right to dismiss it. But it is by far not proving that Carlsen was behaving in an acceptable manner when he accused Niemann. Also, if we apply common sense, then it's clear that Niemann will be less likely to be invited at tournaments and, if he has a fantastic win, there will always be some suspicion. All this would have not happened if Carlsen did not wage, with the help of chess.com a defamation crusade against him, without any convincing proof about his alleged cheating.
Albert Silver Albert Silver 6/28/2023 03:11
@hansj - Thanks and fixed.
calvinamari calvinamari 6/28/2023 01:32
If you cheated multiple times and then got caught — and admitted it — in one casino in Las Vegas, do you think you would have a God-given or legal right to play at the next casino on the strip? You would be thrown out on your ass, assuming you were not first barred at the front door.

A deserved result.
tamango tamango 6/28/2023 01:08
What a soy boy
arzi arzi 6/28/2023 12:47
To Jack Nayer, didn't Nieman beat Carlsen in their last meeting? That's why Carlsen is so hurt and angry. Maybe Carlsen is no longer good enough after giving up his title? If the antitrust injury didn't work, maybe the defamation accusation will work? There should be no ambiguity about defamation. This trial wouldn't even have started if Carlsen had been able to be a real man and admit to the rash statement after the lost game and apologize for what he said. No one would remember this event anymore. The only ones benefiting from this case are lawyers.
pierre2020 pierre2020 6/28/2023 12:29
Guys, nothing weird here. I mean he just beat a bunch of players (Carlsen, Fedoseev, Firouzja, Nakamura (online), Mamedyarov, Repport (online and over the board)) nothing else. Let me told you something, Last weak I went to the pub and I beat few guys too, but no one accused me of cheating. Strange word, no?
Jack Nayer Jack Nayer 6/28/2023 12:21
GR: Niemann's rating is 2695, he is number 34 in the world. There is no reason to invite Niemann to a top tournament. He is not good enough.
Jack Nayer Jack Nayer 6/28/2023 12:17
Good!
hansj hansj 6/28/2023 11:36
The link to " full decision by the court" is not to the decision of the court but to the complaint filed.
GR2 GR2 6/28/2023 10:28
Why isn't Hans Niemann getting invited to the top tournaments? His rating warrants it.
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