Facebook loses bid to dismiss users’ data-privacy antitrust claims

3 minute read

People are silhouetted as they pose with laptops in front of a screen projected with a Facebook logo, in this picture illustration taken in Zenica October 29, 2014. REUTERS/Dado Ruvic/File Photo

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  • California judge Lucy Koh grants in part, denies Facebook motion to dismiss
  • Ruling issued in consolidated consumer, advertiser cases
  • Plaintiffs can refile amended claims within 45 days, court says

(Reuters) - A California federal judge has handed a partial win to consumers suing Facebook, in a ruling that denied the company's bid to dismiss claims that it exploited user data to thwart industry competitors.

The 110-page ruling from Judge Lucy Koh in San Jose, California, on Jan. 14 allows consumers to pursue claims against Facebook for false representations about its data privacy practices, including its assertions that it wasn't sharing users' private information with third parties. Koh ruled that advertisers can sue Facebook over an agreement the company reached with Google Inc in 2018 to refrain from entering each other's market, Koh said.

Koh's decision, which addressed claims from consumers and advertisers in a dozen consolidated cases filed in 2020 and last year against Facebook, now called Meta Platforms Inc, dismissed certain claims, including an allegation that Facebook maintained monopoly power through a "copy, acquire, kill" strategy. Koh gave the plaintiffs a chance to refile an amended complaint within 45 days.

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The court's opinion came just days after a Washington, D.C., federal judge on Jan. 11 declined Facebook's push to dismiss an antitrust case that the Federal Trade Commission filed last year. On Friday, in another case, dozens of U.S. states asked a U.S. appeals court in Washington, D.C., to reinstate an antitrust lawsuit against the company.

A Facebook representative said Koh's ruling "recognizes many of the defects in the complaints filed against Meta."

Sonal Mehta of Wilmer Cutler Pickering Hale and Dorr, a lawyer for Facebook, did not immediately return a request for comment on Tuesday.

In its bid seeking dismissal, Facebook's lawyers said the plaintiffs "offer a series of unfounded and untimely allegations that fail to plausibly allege an antitrust case."

Stephen Swedlow, a lawyer at Quinn Emanuel Urquhart & Sullivan for the consumer plaintiffs, did not immediately respond on Tuesday to a message seeking comment. Yavar Bathaee of Bathaee Dunne, an attorney for the advertisers, declined to comment.

The consumers are seeking an order requiring Facebook to hire third-party auditors to evaluate privacy practices and market conduct, and they want the court to prohibit Facebook from any continued deceptive behavior.

Koh, sitting by designation in the trial court, was confirmed in December to the San Francisco-based 9th U.S. Circuit Court of Appeals.

The case is Klein v. Facebook Inc, U.S. District Court for the Northern District of California, No. 5:20-cv-08570.

For consumer class: Stephen Swedlow of Quinn Emanuel Urquhart & Sullivan; and Shana Scarlett of Hagens Berman Sobol Shapiro

For advertiser class: Brian Dunne and Yavar Bathaee of Bathaee Dunne; and Kristen Anderson of Scott + Scott

For Facebook: Sonal Mehta, David Gringer and Ari Holtzblatt of Wilmer Cutler Pickering Hale and Dorr

Read more:

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Facebook, Google CEOs aware of formal advertising market deal -- court filing

U.S. judge rejects Facebook request to dismiss FTC antitrust lawsuit

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