After a lawsuit against Meta Platform Inc., owner of Facebook, was thrown out by a lower court in 2020, 46 states, Washington D.C., and Guam asked a federal appeals court to reinstate the antitrust lawsuit challenging the company’s acquisition of Instagram and WhatsApp. The lawsuit, which was originally filed by the Federal Trade Commission (FTC), alleged that “Meta used its monopoly power to buy potential competitors and curtail competitive behavior.”
Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
“As a result, it has stifled competition and denied consumers the improvements in service and other benefits that competition provides,” Barbara Underwood, New York Solicitor General, said. “The states bring this action to protect the public from continuing harm caused by this conduct.”
Meta initially had the 2020 case thrown out because their purchase happened years prior and didn’t cause antitrust concerns at the time. But Underwood told the three-judge panel at the U.S. Court of Appeals for the D.C. Circuit on Monday that the dismissal of the case by the lower court was wrong based solely on “laches.”
“There was no harm to Facebook from the states filing their complaint in 2020 instead of a few years earlier,” Underwood said.
But Meta Platform Inc. said that states should have acted sooner to the “highly publicized” acquisitions.
“The transactions took place in 2012 and 2014 and all of this conduct was, of course, quite open and publicized at the time…,” Aaron Panner, attorney for Meta Platforms Inc., said. “And yet we see a suit that’s filed at the end of 2020. The doctrine of laches exists to prevent that kind of unfair delay.”
According to the FTC’s original lawsuit, Meta Platform Inc. “dominates the world’s personal social networking services with illegal monopoly power in the market, leading to an unmatched position with staggering profits,” Causes.com reported. It also seeks to require notice and approval of future acquisitions and mergers and remove investment in assets such as Instagram and WhatsApp.