Facebook Files Motion To Dismiss First Amended Complaint In Antitrust Suit

On Friday in the Northern District of California, Facebook filed a motion to dismiss plaintiffs Reveal Chat Holdco and Beehive Biometric’s First Amended Complaint (FAC) against it for antitrust violations. The initial complaint was filed in January; in June Facebook filed a reply in support of a motion to dismiss, and in July Judge Beth Labson Freeman granted the motion to dismiss with partial leave to amend. Facebook argued that the plaintiffs failed to address the shortcomings of their original complaint and the court’s concerns.

Facebook stated that in April 2014, it announced that “it was changing the policy that allowed the plaintiffs’ apps to access certain user data using Application Programming Interfaces, or ‘APIs.’” A year later, in April 2015 it enforced that policy change. The plaintiffs proffered that they asked for an exception at the time, but Facebook denied this request. Facebook asserted that the plaintiffs “did nothing until January 2020,” when they sued Facebook for antitrust violations. This court dismissed the plaintiffs’ original complaint, stating that their claims were time-barred and that the complaint failed to state a claim.

Furthermore, Facebook argues that the “FAC reveals why plaintiffs initially said so little about themselves: plaintiffs were not putative competitors of Facebook’s, nor were they – or competition more generally – inhibited by any of Facebook’s actions. Instead, plaintiffs were (an in one case are) ‘app’ developers that hoped to operate on Facebook Platform, using Facebook’s data to offer niche products.” Facebook moves to dismiss the plaintiffs’ FAC “on the grounds that plaintiffs’ claims are time-barred, no plaintiff has suffered antitrust injury, and plaintiffs have otherwise failed to state claims upon which relief can be granted.”

Facebook said in its motion that the “plaintiffs’ attempt to toll the statute of limitations by alleging fraudulent concealment remains unavailing.” Facebook denied any such activity, as everything at issue was public knowledge and that asking for an exception and not doing anything else “but reading a blog post is not ‘due diligence.’”

Facebook claims that the FAC should also be dismissed because the plaintiffs’ effort to address the court’s concerns about if they are customers or competitors of Facebook “is unsuccessful, since plaintiffs now claim to be both, at the same time, in the same market.” They added that the plaintiffs’ claims “make clear that plaintiffs were customers of Facebook’s and had no plans or ability to compete.”

Lastly, Facebook alleged that the plaintiffs’ unlawful monopolization and attempted monopolization allegations fail “across every dimension.” For example, Facebook stated that even if their claimed relevant markets are true, “Facebook is not plausibly alleged to have monopoly power – or anything close.” Moreover, Facebook states that the plaintiffs did not amend their “previously deficient refusal-to-deal theory.” Facebook adds that the FAC points out the “implausibility of the plaintiffs’ claims” that “Facebook designed a scheme to strengthen its largest competitors while killing off smaller firms that only ‘planned’ to compete in the future.” Facebook notes that at the hearing for Facebook’s motion to dismiss the original complaint, the plaintiffs “were challenged repeatedly to come forward with facts that would support their conclusory facts,” however, according to Facebook, the plaintiffs did not and cannot do so because of their defects and incurable flaws.

Facebook requested the court to dismiss the plaintiffs’ First Amended Complaint with prejudice. Facebook’s motion to dismiss will be heard on December 3.

Facebook is represented by Wilmer Cutler Pickering Hale and Dorr LLP. The plaintiffs are represented by Bathaee Dunne LLP.