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US states ask appeals court to reinstate Facebook’s lawsuit

US states ask appeals court to reinstate Facebook’s lawsuit

By Diane Bartz

WASHINGTON (Reuters) – A large group of US states led by New York argued in an appeals court on Monday that an antitrust lawsuit against Meta Facebook Inc (NASDAQ:) should be reinstated because of ongoing damage from the company’s actions and because states did not wait long to file their complaint.

Barbara Underwood, the New York attorney general who led the group consisting of 46 states, Guam and the District of Columbia, said it was wrong to treat states as a class action and to limit the time they could file a lawsuit. The non-participating countries are Alabama, Georgia, South Carolina and South Dakota.

She said states acted akin to law enforcement, so the “mistakes” banning unreasonable delays in filing would not apply.

She said Facebook’s actions hurt the economy and the market.

The states are asking the three-judge panel of the US Court of Appeals for the District of Columbia to reinstate a lawsuit filed in 2020, the same time the US Federal Trade Commission filed a lawsuit against the company.

Both the FTC and states have asked the court to order Facebook to sell Instagram, which it bought for $1 billion in 2012, and WhatsApp, which it bought for $19 billion in 2014. The FTC is competing with Facebook.

Arguing for Facebook, which successfully sued the state, Aaron Banner argued that the two acquisitions were well publicized at the same time, as were the company’s policies regarding third-party apps. Facebook has been accused of penalizing apps on its platform that, for example, connect to other social networks.

He said the laches should be enforced because the state’s lawsuit was more of a class action and less law enforcement, and that the actions described “occurred years ago and did not cause antitrust concern at the time.”

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Judge Raymond Randolph asked about Facebook’s competitors and cited news articles that the company has struggled to retain younger users.

Banner noted the popularity of TikTok, Twitter (NYSE:) and others, adding, “Sometimes good antitrust facts are bad for business.”

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