9th Cir. Dismisses Developer Class Action Against Facebook

An appellate panel partly dismissed an April 2021 ruling in the suit brought by mobile application developers Reveal Chat Hold, Beehive Biometric and USA Technology and Management Services, while also upholding a portion of the decision, reported LawStreet Media.

The non-precedential opinion concluded that the plaintiffs lacked standing to pursue their injunctive relief claims under the federal antitrust laws and that their claims for damages were time-barred. The class action initiated by the developers had argued for relief from violations of the Sherman and Clayton Acts and various state laws.

The January 2020 suit against Facebook stems from allegations that it acted as a gatekeeper in the social data and social advertising markets. According to the plaintiffs’ complaint and in 2015, Facebook cut off third-party developers from its application programming interfaces (APIs) that the plaintiffs, including Reveal Chat, an anonymous chatting app that was formerly linked to the dating site LikeBright, relied on for their mobile applications.

The complaint also took aim at Facebook’s acquisitions of Instagram and WhatsApp, arguing that they further entrenched its monopoly. The plaintiffs contended that their claims were safe from time-sensitivity rules because Facebook engaged in fraudulent concealment to cover its tracks, with plaintiffs only able to discover the alleged conduct after the statute of limitations had run out.

“Facebook’s March 2019 announcement about the ongoing back-end integration of Instagram and WhatsApp constitutes a new act that is not a reaffirmation of a previous act and inflicts a new and accumulating injury,” one plaintiff explained.

In this week’s six-page opinion, the Ninth Circuit raised the issue of antitrust standing on its own and reviewed the district court’s decision regarding timeliness.

The court said that the plaintiffs’ injunctive relief claims fail because they alleged injuries that occurred in 2015 and were therefore “not fairly traceable to Meta’s challenged conduct in 2019.” The court further reasoned that the plaintiffs neither offered evidence suggesting that Meta’s 2019 actions threatened future harm, nor alleged facts demonstrating that any of the harms they claimed were redressible by the injunctive relief sought.

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