Metroplex Resists Arbitration in Antitrust Action Against Meta Platforms

A Wednesday opposition leveled multiple arguments at Meta Platforms Inc. with the hope of curtailing its bid to shift Metroplex Communications Inc.’s case to arbitration. The unfair competition class action concerns false statements Meta allegedly made in the promotion of its advertising products’ “reach,” among other things.

As previously reported, Metroplex and Meta both sell digital advertising to customers, with Metroplex selling ads for radio stations and other media outlets in Illinois. The plaintiff’s amended complaint claims that Meta promoted its advertising products with exaggerated metrics as to both the amount of people on the Facebook platform and its ability to deliver digital ads to those people.

In turn, Metroplex alleges that Meta diverted would-be customers away from it. Its class action complaint seeks restitution and injunctive relief under the Lanham Act and injunctive relief under the Illinois Uniform Deceptive Trade Practices Act.

Meta moved to dismiss the suit or compel arbitration in two motions.

Now, Metroplex responds to the latter by alleging that it is not bound by the agreement Meta claims it is. Metroplex says the arbitration agreement Meta presents to the court seeks to enforce an agreement entered into “by a Facebook user with a Facebook account—which necessarily had to be a human, not an entity.”

Next, Metroplex says that even assuming that it entered into an agreement, the unfair competition claims are beyond the agreement’s scope. Instead of pertaining to access or use of Meta Products for commercial or business purposes, the suit focuses on the unfair competition that Meta’s practices create for its competitors.

The suit is also unenforceable under a provision of the Federal Arbitration Act (FAA), the opposition says. Metroplex contends that the FAA’s Section 2 “only permits a contract evidencing a transaction to contain a provision ‘to settle by arbitration a controversy thereafter arising out of such contract or transaction.’”

Metroplex reasons that because the dispute does not arise out of any such contract or transaction, and instead relates to unfair competition by Meta based on Meta’s purportedly fraudulent actions toward third parties, it falls outside the provision.

Lastly, the plaintiff adds that the agreement is invalid because it is unconscionable or, alternatively, because it seeks to prohibit Metroplex from obtaining statutory remedies of public injunctive relief.

The case is before Judge David W. Dugan of East St. Louis, Ill.

Metropolex is represented by Goldenberg Heller & Antognoli P.C. and Margulis Gelfand LLC. Meta Platforms is represented by Latham & Watkins.