Facebook's parent company Meta has won a significant victory in a federal appeals court, which dismissed a lawsuit brought by a group of states seeking to break up the company. The three-judge panel of the US Court of Appeals for the DC Circuit upheld a previous decision to toss out the suit, which was initially filed by New York and other states. The lawsuit accused Meta of violating antitrust laws through its "buy-or-bury" approach and demanded that the company unwind its past acquisitions of Instagram and WhatsApp. The court ruled that the lawsuit came too late and failed to make a persuasive case that Meta's data policies harmed competition.
This decision is a setback for regulators who have pointed to Meta as an example of alleged abuses by tech giants. It also casts doubt on a parallel antitrust case against the company that was brought by the Federal Trade Commission at around the same time. The states' original complaint sought to break up Facebook and divest it of Instagram and WhatsApp under court supervision, but the court ruled that such an injunction would have severe consequences that would not have existed if the challenge had been brought in a timely manner and succeeded.
The court also rejected state allegations that Meta's policies restricting app developers were anticompetitive. The policies simply told developers that they could not use Facebook's platform to duplicate its core products, which did not rise to the level of an antitrust violation under federal law. The states argued that these policies discouraged innovation by the company's rivals, but failed to establish how widely the policies affected Facebook's third-party developers.
A spokesperson for New York Attorney General Letitia James did not immediately respond to a request for comment. Meta released a statement saying that the state's case was a mischaracterization of "the vibrant competitive ecosystem in which we operate." The company also pledged to defend itself vigorously against the FTC's distortion of antitrust laws and attacks on an American success story that are contrary to the interests of people and businesses who value their services.
Despite the appeals court's decision, Meta still faces a similar lawsuit by the Federal Trade Commission seeking to break up the company in connection with its Instagram and WhatsApp acquisitions. The same federal judge who dismissed the state suit, James Boasberg, allowed the federal suit to proceed last year, although he initially tossed it out, saying the agency had failed to make an initial showing that Meta held a monopoly in personal social networking. Nonetheless, he permitted the FTC to re-file its complaint with changes.