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DOJ Tells DC Circ. to Reassemble States’ Facebook Claims


January 31, 2022

The U.S. Department of Justice has thrown its weight behind 48 attorneys general trying to revive their lawsuit accusing Facebook of illegally monopolizing personal social networking services, telling the D.C. Circuit that a district judge wrongly broke the suit down without looking at the allegations cumulatively.

The DOJ Antitrust Division was one of several parties to file amicus briefs Friday backing the coalition of enforcers from 46 states, the District of Columbia and Guam trying to upend a district court’s conclusion that they waited too long to challenge conduct that included the acquisitions of Instagram and WhatsApp by the company now known as Meta.

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Filed in December 2020, alongside a parallel enforcement action by the Federal Trade Commission, the coalition of states accused Facebook of violating the Sherman Act and the Clayton Act, which bars anti-competitive mergers. The FTC case is moving forward after a rejiggered version survived dismissal earlier this month.

Enforcers allege that the social networking giant maintained monopolies and engaged in anti-competitive mergers, including with its purchases of Instagram and WhatsApp, as well as through restrictions on third-party developers that access its networks.

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In the Facebook appeal, the attorneys general also received backing Friday from a group of former state antitrust enforcement officials and antitrust professors, a group of economists, and antitrust advocacy groups the American Antitrust Institute and the Committee to Support the Antitrust Laws.

The former state antitrust officials targeted their brief to support the idea of state enforcers generally, without touching on the merits of the allegations against Facebook. They argued that the district court wrongly deemed the state’s case as filed too late by equating enforcers with “private persons,” suggesting “that state enforcement was less important than federal enforcement.”

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AAI argued in its own amicus brief that the district court never considered the claims against Facebook “as a whole scheme.”

“Properly viewed as a coordinated scheme, all the scheme’s elements are designed with the common purpose of thwarting nascent and future competitors, not inducing the exit of current competitors. The alleged scheme’s common purpose cannot be ignored; it is what makes the scheme a scheme,” the group said.

AAI’s vice president of legal advocacy, Randy M. Stutz, further said in an email that the court was “clearly misguided” in relying on “restrictive unilateral-refusal-to-deal law.”

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Also arguing for a holistic perspective were the economists, who argued in their brief that the pieces of Facebook’s “buy or bury” strategy scooping up or cutting off would-be rivals must be looked as reinforcing one another.

“The district court erred in analyzing and dismissing the ‘buy’ and ‘bury’ components of Facebook’s conduct separately, thereby disregarding both the temporal progression of Facebook’s conduct and the cumulative anti-competitive effects of the conduct,” they said. “The effects of Facebook’s acquisitions and the limitations it placed on interoperability between itself and other applications — including targets that declined Facebook’s buyout offers — should not, and indeed, cannot be decomposed.”

In breaking down those components, “the district court minimized the states’ allegations,” an attorney for the economists, Jessica B. Weiner of Cohen Milstein Sellers & Toll PLLC, said in an email.

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The economists are represented by Sharon Robertson and Jessica Weiner of Cohen Milstein Sellers & Toll PLLC.

The case is New York et al. v. Facebook Inc., case number 21-7078, in the U.S. Court of Appeals for the District of Columbia Circuit.

The complete article can be viewed here.