Following dismissal briefing and oral argument, Judge William Alsup issued an opinion in the competition and conspiracy case brought by several adult entertainers on behalf of a similarly situated class against Meta Platforms and the operators of OnlyFans, an adult entertainment website. In denying defendants’ motions to dismiss late last week, the court ruled that the plaintiffs put forward plausible allegations that the defendants choked off online traffic from the plaintiffs’ Instagram and Facebook accounts for OnlyFans’ benefit.
As previously covered by Law Street Media, the plaintiffs post links on social media to adult entertainment websites that allow users to watch their content for a price. The plaintiffs profit through a revenue sharing agreement with website owners, who compete with rival service OnlyFans, the complaint says.
According to the lawsuit, Meta Platforms and OnlyFans colluded to buoy OnlyFans’ traffic and boost its revenue. Allegedly, the defendants, including unknown Meta employees who accepted bribes, manipulated Facebook and Instagram databases to include the plaintiffs in lists of “dangerous individuals or organizations” like terrorism groups. Further, the defendants allegedly shared this information with other social media platforms via the “Global Internet Forum to Counter Terrorism Shared Hash Database,” thus demoting the plaintiffs’ accounts on other platforms too.
The adult entertainers argue that the defendants’ conduct constitutes unfair competition and tortious interference with contract and business relations. They further accuse the OnlyFans defendants of civil conspiracy.
After their initial motion to dismiss, all defendants sought dismissal of the second amended complaint for failure to state a claim, while the Meta defendants once again moved to strike the claims under California’s anti-SLAPP statute.
The court’s multifaceted holding said that the plaintiffs put forward sufficient evidence of anticompetitive behavior. Among other allegations, Judge Alsup pointed to wire transfers from the OnlyFans defendants to Meta accounts and found it reasonable to infer that one 2018 money transfer, with its subject line listing adult entertainment websites that compete with OnlyFans, was a bribe to Meta employees. The court also highlighted a graph showing that in late 2018, competitors of OnlyFans experienced significant drops in web traffic while OnlyFans experienced a significant increase.
Further, Judge Alsup declined Meta’s Section 230 of the Communications Decency Act (CDA) defense on two grounds. First, the court said that the CDA provision is inapplicable when “automated content-moderation tools are allegedly designed to facilitate unlawful conduct. Second, the opinion said that allowing Meta the defense would create a “backdoor to CDA immunity” contrary to the law’s history and purpose of preserving a competitive and free market for the internet and interactive computer services.
Lastly, the court held that the Meta defendants were not entitled to constitutional Free Speech protection from their decisions to remove the plaintiffs’ content from their platforms. In declining the argument, Judge Alsup pointed to Supreme Court precedent holding that the First Amendment does not immunize anticompetitive conduct.
The plaintiffs are represented by Milberg Coleman Bryson Phillips Grossman PLLC, the Meta defendants by Kirkland & Ellis LLP, and the OnlyFans defendants by Quinn Emanuel Urquhart & Sullivan LLP.
