Friday, September 22, 2023
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States lose appeal to unwind Meta purchases of Instagram, WhatsApp

For the second time, officials have failed in court in their efforts to curb the tech giant's reach.

WASHINGTON (CN) — Meta, the parent company of Facebook, did not violate antitrust laws when it bought Instagram and WhatsApp — two other popular social media networks, the D.C. Circuit ruled on Thursday. 

An appeals court panel affirmed a district court ruling in favor of the tech giant, which had tossed the case on a number of grounds, including because it was filed after the statute of limitations.

The appeals panel included two George H. W. Bush appointees — Chief Judge A. Raymond Randolph and Judge Karen Henderson — and an Obama appointee, Judge Robert Wilkins.

Randolph, who wrote the opinion for the D.C. Circuit court, said the suit from 46 states, Guam and the District of Columbia was “not only odd, but old.”

“‘Odd’ because the States’ suit concerns an industry that [...] has had rapid growth and innovation with no end in sight,” Randolph wrote. 

Old because the suit was first filed in 2020 — eight years after Meta acquired Instagram and six years after it acquired WhatsApp. 

"The district court held that 'the States’ long delays were unreasonable and unjustified as a matter of law,'" Randolph wrote. Using other antitrust cases as templates, that court had decided on a four-year statute of limitations as a "‘guideline’ for determining what amounted to undue delay.” 

Randolph agreed with that timeline. The district court’s assessment was consistent with precedent on statutes of limitation, he said — and the states and territories had waited too long to file suit after learning of the purchases.

“The States were on notice of Facebook’s two major acquisitions,” Randolph wrote. “Both were publicized. The Federal Trade Commission conducted a lengthy, publicly reported investigation to determine whether Facebook’s acquisition of Instagram would violate the antitrust laws.” 

The states claimed that Meta’s Instagram and WhatsApp takeovers violated the Sherman Antitrust Act, a landmark law from 1890 banning monopolies. The appeals court agreed with the district court that Meta’s actions did not meet this bar. 

Led by New York but filed in Washington, the suit accused Meta — then Facebook — of using anticompetitive tactics to create a monopoly when it purchased Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014. The states claimed Meta’s purchases thwarted competition and harmed users and advertisers. 

In 2021, U.S. District Judge James Boasberg, a George W. Bush appointee, threw out the suits due to the delay and after failing to find that Meta controlled more than 60% of the social networking market. 

Follow @KelseyReichmann
Categories / Appeals, Business, Courts

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