549 F.Supp.3d 6
D.D.C.2021Background
- 46 States, D.C., and Guam sued Facebook (Dec. 9, 2020), alleging it monopolized the Personal Social Networking Services market and unlawfully maintained that monopoly.
- Core factual allegations: Facebook acquired Instagram (2012) and WhatsApp (2014) to "buy or bury" rivals, and enforced Platform/API policies from ~2011–2018 that cut off API access to apps (specific revocations alleged 2013–2015).
- Plaintiffs seek equitable relief under Section 16 (Clayton Act): divestiture of Instagram/WhatsApp and injunctions prohibiting similar conduct going forward.
- The FTC filed a parallel enforcement action; this Opinion resolves only the States’ complaint dismissal motion.
- Court held Plaintiffs have parens patriae standing but dismissed the States’ case in full: (1) Section 2 and Section 7 claims based on acquisitions are barred by laches; (2) Section 2 claims based on Platform/API policies fail to state a claim because policy alone is lawful and alleged revocations are too old to support injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (parens patriae) | States allege broad economic harms to residents and advertisers from reduced competition. | Facebook contended States lacked Article III injury. | Standing: States plausibly pleaded quasi-sovereign economic injury; Article III satisfied. |
| Refusal-to-deal / API policy (Sherman Act §2) | Facebook’s API policy and selective revocations foreclosed rivals; amounted to illegal refusal to deal or conditional dealing. | Monopolists have no general duty to deal; policy alone lawful; unilateral refusals actionable only under narrow Aspen Skiing predicate. | Held: Policy alone not unlawful; specific revocations last occurred 2015 and cannot support present injunctive relief. |
| Conditional dealing / exclusive-dealing theory | Policies coerced developers not to interoperate with rivals (Lorain Journal analogy). | The 2011 policy applied to "Apps on Facebook," not freestanding apps, and did not condition API access broadly; Plaintiffs failed to plead requisite effect. | Held: Plaintiffs failed to plead conditional dealing that interfered with rivals; claim deficient as matter of law. |
| Acquisitions (Clayton §7 and Sherman §2) and timeliness | Instagram and WhatsApp acquisitions unlawfully lessened competition; ongoing harm justifies relief. | Facebook: suit filed years after acquisitions; laches and statute-of-limitations principles bar equitable remedies; divestiture now prejudicial. | Held: Acquisitions claims barred by laches (delay unreasonable, prejudice to Facebook apparent); hold-and-use and ongoing-harm theories insufficient to avoid laches. |
Key Cases Cited
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) (narrow refusal-to-deal exception where monopolist sacrifices short-term benefits to exclude rival).
- Verizon Commc'ns Inc. v. Trinko, 540 U.S. 398 (2004) (monopolist generally has no duty to deal; Aspen Skiing is a limited exception).
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (framework for monopoly maintenance and discussion of course-of-conduct theories).
- United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586 (1957) (Section 7 challenge may be brought when acquired assets are used to lessen competition).
- California v. American Stores Co., 495 U.S. 271 (1990) (private/state injunctive suits under Section 16 available; equitable defenses like laches may bar belated attacks).
- Georgia v. Pennsylvania R. Co., 324 U.S. 439 (1945) (state parens patriae standing to sue under antitrust law for widespread economic injury).
- Zenith Radio Corp. v. Hazeltine Rsch., Inc., 395 U.S. 100 (1969) (injunctive relief requires significant threat of future injury or ongoing violation).