Facebook Says Users and Advertisers Fall Short of Alleging Plausible Antitrust Claims

Social media giant Facebook has sought dismissal of six related cases that claim it illegally monopolized the social networking market and engaged in other anticompetitive behavior to eradicate competition and swindle users into parting with their personal data. Last Thursday’s motion argues that the plaintiffs, who first filed suit last December, have alleged “unfounded and untimely” allegations that fail to state a cognizable antitrust case.

Facebook defended its case on several grounds. First, it claimed that the plaintiffs’ federal monopolization claims are time-barred and no tolling theory applies. Because the vast majority of the users’ complaint centers on allegedly deceptive conduct that occurred more than decade ago, the statute of limitations and laches bars those contentions, Facebook argued.

Second, the defendant asserted that the plaintiffs fail to plausibly define a relevant product market. With regard to the advertiser plaintiffs, Facebook contended that they have pleaded a sub-market for “social” advertising distinct from online advertising that, in reality, ignores the competitive landscape, and was recently rejected by another Northern District of California court.

Third, the plaintiffs have not adequately alleged exclusionary conduct, according to the 47-page motion. “Users seek to turn alleged misrepresentations about Facebook’s privacy policies into a theory of unlawful monopolization, but that rewrite of history is implausible on its face,” the motion states. The plaintiffs’ allegation that Facebook’s so-called “copy, acquire, kill” strategy was anticompetitive is also incorrect, the defendant contended, because none of the alleged conduct violates the antitrust laws.

Fourth, Facebook asserted that the plaintiffs lack antitrust standing. As for the users, Facebook claimed that they have not alleged antitrust injury. The company claimed that lost “information and attention” is not a cognizable injury, and that the users’ alleged injury derived from their monopoly acquisition theory is speculative rather than concrete.

The advertisers reportedly lack standing because the theory that they paid “supracompetitive prices” to place ads is conclusory. Finally, the filing claims that the users fail to state a claim for unjust enrichment because, among other things, there is no cause of action for unjust enrichment under California law.

Facebook’s motion asks Judge Lucy H. Koh to dismiss the plaintiffs’ claims with prejudice. The briefing is set to conclude June 10, and the motion to dismiss hearing is scheduled for July 15 in San Jose, California.

Facebook is represented by Wilmer Cutler Pickering Hale and Dorr.