The parent company of Facebook, Meta, has faced its share of scrutiny and legal complications recently. However, Meta won a victory last week in the U.S. Court of Appeals for the District of Columbia Circuit. This federal appellate court upheld a decision by a trial court, dismissing a lawsuit against Meta by nearly all the states. The lawsuit had asserted that Facebook had violated antitrust laws by acquiring Instagram and WhatsApp, which allegedly undermined competition.
These acquisitions had occurred in 2012 and 2014. The judge in the lower court found that the states had waited too long to challenge the acquisitions, since they did not file their complaint until December 2020. A three-judge panel of the D.C. Circuit agreed. Judge Raymond Randolph pointed out that an injunction undoing these acquisitions “would have severe consequences” that could have been avoided if the states had brought the lawsuit in a timely manner. During the eight-year and six-year periods between the acquisitions and the lawsuit, Facebook had worked to integrate Instagram, combine WhatsApp data across all Facebook products, and modify its own products and services based on the acquisitions.
The D.C. Circuit also dispensed with a section of the lawsuit based on Facebook policies that it has now abandoned. The states had alleged that the tech company had violated antitrust laws through certain features of its platform policies for third-party developers of applications. The D.C. Circuit agreed with the judge in the lower court that these allegations did not set forth a violation of the Sherman Act.
Despite this victory, Meta still faces a parallel lawsuit by the Federal Trade Commission, based on the Instagram and WhatsApp acquisitions. The trial court judge who dismissed the case by the states chose not to dismiss the FTC case. (He dismissed the initial complaint that the FTC filed in 2021, but he found that its refiled complaint met the standard for the case to proceed.)
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