Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 1 of 25
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`REVEAL CHAT HOLDCO, LLC., et al.,
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`Plaintiffs,
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`v.
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`FACEBOOK, INC.,
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`Case No. 20-cv-00363-BLF
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`ORDER GRANTING DEFENDANT
`FACEBOOK, INC.’S MOTION TO
`DISMISS
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`[Re: ECF 25]
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`Defendant.
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`This is a putative class action antitrust lawsuit brought by Plaintiffs Reveal Chat Holdco
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`LLC (“Reveal Chat”), USA Technology and Management Services, Inc. (“Lenddo”), Cir.cl, Inc.
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`(“Cir.cl”), and Beehive Biometric, Inc. (“Beehive Biometric”) (collectively, “Plaintiffs”) against
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`Defendant Facebook, Inc. (“Facebook”). Before the Court is Facebook’s motion to dismiss
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`pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that Plaintiffs’ claims are
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`time-barred, Plaintiffs have not suffered an antitrust injury, Plaintiffs have failed to allege
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`plausible product markets, and Plaintiffs have otherwise failed to state a claim upon which relief
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`can be granted. Mot. to Dismiss (“Mot.”) 1, ECF 25. Plaintiffs oppose. See Opp. to Mot.
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`(“Opp.”), ECF 43. The Court heard oral argument on this motion on June 11, 2020. For the
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`reasons stated below and on the record, the Court GRANTS Facebook’s motion and DISMISSES
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`WITH LEAVE TO AMEND IN PART and DISMISSES WITHOUT LEAVE TO AMEND IN
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`PART the Complaint.
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`I. BACKGROUND1
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`Facebook is a publicly-traded social media company that was founded in 2004 by Mark
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`Zuckerberg. Class Action Compl. (“Compl.”) ¶¶ 26-26, 35, ECF 1. Facebook provides online
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`1 Plaintiffs’ well-pled factual allegations are accepted as true for purposes of the motion to
`dismiss. See Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011).
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`Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 2 of 25
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`services to two billion users worldwide and in exchange it collects user data, which its uses to
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`create and sell advertising services. Compl. ¶ 27. Additionally, Facebook operates as a platform
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`for third-party applications and hardware. Compl. ¶ 28. Between 2004 and 2010, Facebook
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`emerged as “the dominant social network in the United States.” Compl. ¶ 36.
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`The data that Facebook collects from users includes: information shared on personal pages,
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`photos and profiles viewed, connections to others, things shared with others, and the content of
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`messages to other users. Compl. ¶ 46. This data can be used for targeted advertising, and the
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`social data created by Facebook’s network can be monetized in a number of ways from targeted
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`advertising and machine learning to commercializing access so that data can be mined by third
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`parties. Compl. ¶¶ 47-49. “By 2010, Facebook stood alone as the dominant player in the newly
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`emergent market for social data (the ‘Social Data Market’) – a market in which Facebook’s own
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`users provided Facebook with a constant stream of uniquely valuable information, which
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`Facebook in turn monetized through the sale of social data (for example, through advertising,
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`monetizing [Application Programming Interfaces (“APIs”)], or other forms of commercializing
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`access to Facebook’s network).” Compl. ¶ 50.
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`Because user data made Facebook’s network more valuable and thus attracted more
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`customers which then led to more data and more customers, a feedback loop emerged. Compl.
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`¶¶ 52-54. The feedback loop, in turn, created a barrier to entry because competing with Facebook
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`required “a new entrant . . . to rapidly replicate both the breadth and value of the Facebook
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`network.” Compl. ¶ 55. This barrier to entry also allowed Facebook to control and increase prices
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`in the Social Data and Social Advertising Markets without the pressures of price competition from
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`existing competitors or new entrants. Compl. ¶ 56; see Compl. ¶¶ 57-60.
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`In 2012, Facebook coined the term “Open Graph” “to describe a set of tools developers
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`could use to traverse Facebook’s network of users, including the social data that resulted from user
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`engagement.” Compl. ¶¶ 90-92. Open Graph contained a set of APIs, which “allowed those
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`creating their own social applications to query the Facebook network for information.” Compl.
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`¶ 92. Beginning in the fall of 2011, to address the threat posed by mobile applications, Facebook
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`devised a scheme to attract third-party developers to build for their platform and then remove
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`Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 3 of 25
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`access to the APIs that were central to these applications. Compl. ¶ 117. For example, the
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`“Friends API” allowed third-party developers to search through a user’s friends, as well as their
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`friends of friends, and the “Newsfeed API” allowed third-party developers to search a user’s
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`newsfeed. Compl. ¶¶ 117-19. Without access to this data, third-party applications “would be
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`abruptly left with none of the social data they needed to function.” Compl. ¶ 119. By August
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`2012, Facebook planned to prevent competitive third-party applications from buying social data
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`from Facebook. Compl. ¶¶ 120-21. Facebook even identified direct, horizontal competitors in the
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`Social Data and Social Advertising Markets. Compl. ¶ 128. In November 2012, Facebook
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`announced that it would block competitors or require full data reciprocity for continued access to
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`its data. Compl. ¶ 136.
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`In April 2014, Facebook announced that it would remove access to several rarely used
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`APIs, including the Friend and Newsfeed APIs. Compl. ¶ 202. After this announcement and
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`through the full removal of the APIs in April 2015, Facebook entered into Whitelist and Data
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`Sharing Agreements with certain third-party developers that allowed continued access to the
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`Friends or NewsFeed APIs and included a provision acknowledging that the covered APIs were
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`not available to the general public. Compl. ¶¶ 207-08. These agreements “were only offered in
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`exchange for massive purchases of Facebook’s social data through mobile advertising and/or
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`through the provision of the developer’s own social data back to Facebook (so-called
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`‘reciprocity’).” Compl. ¶ 209.
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`In 2012, Facebook acquired its competitor, Instagram for $1 billion. Compl. ¶ 260. The
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`acquisition of “Instagram was instrumental to Facebook’s explosive growth in the Social Data and
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`Social Advertising Markets.” Compl. ¶ 270. In 2014, Facebook acquired another competitor,
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`WhatsApp, for $22 billion. Compl. ¶ 290. The acquisition of WhatsApp “further solidified
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`Facebook’s dominance in the Social Data and Social Advertising Markets.” Compl. ¶ 292.
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`Facebook is currently integrating the backends of its products with WhatsApp and Instagram.
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`Compl. ¶ 294.
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`Based on the above actions, Plaintiffs filed their Class Action Complaint on January 16,
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`2020. The complaint alleges six causes of action for: (1) monopolization in violation of Section 2
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`of the Sherman Antitrust Act (the “Sherman Act”), 15 U.S.C. § 2, for acquiring and maintaining a
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`monopoly in the relevant markets for Social Data and Social Advertising; (2) violation of
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`Section 2 of the Sherman Act for attempting to monopolize the Social Data and Social Advertising
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`Markets; (3) violation of Section 1 of the Sherman Act under a hub-and-spoke theory because
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`Facebook’s Whitelist and Data Sharing Agreements controlled the supply of social data; (4)
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`violation of Section 7 of the Clayton Antitrust Act (the “Clayton Act”), 15 U.S.C. § 18, for
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`Facebook’s acquisition and integration of Instagram and WhatsApp; (5) violation of Section 2 of
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`the Sherman Act because Facebook acquired and maintained a monopoly in the Social Data and
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`Social Advertising Markets through its acquisition and integration of Instagram and WhatsApp;
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`and (6) a request for injunctive relief and divestiture. Compl. ¶¶ 403-51.
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`II. LEGAL STANDARD
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`“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
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`claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation
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`Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d
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`729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts
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`as true all well-pled factual allegations and construes them in the light most favorable to the
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`plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the
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`Court need not “accept as true allegations that contradict matters properly subject to judicial
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`notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or
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`unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008)
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`(internal quotation marks and citations omitted). While a complaint need not contain detailed
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`factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to
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`relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
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`Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the
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`court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
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`On a motion to dismiss, the Court’s review is limited to the face of the complaint and matters
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`judicially noticeable. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star
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`Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983).
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`Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 5 of 25
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`In deciding whether to grant leave to amend, the Court must consider the factors set forth
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`by the Supreme Court in Foman v. Davis, 371 U.S. 178 (1962), and discussed at length by the
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`Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2009). A district
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`court ordinarily must grant leave to amend unless one or more of the Foman factors is present: (1)
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`undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by
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`amendment, (4) undue prejudice to the opposing party, or (5) futility of amendment. Eminence
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`Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the opposing party that carries
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`the greatest weight.” Id. However, a strong showing with respect to one of the other factors may
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`warrant denial of leave to amend. Id.
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`III. DISCUSSION
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`Facebook argues that Plaintiffs’ claims are time-barred, Plaintiffs failed to plausibly allege
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`an antitrust injury, and Plaintiffs failed to state a claim for relief. Mot. 6-25. The Court addresses
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`each argument in turn.
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`A.
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`Statute of Limitations and Doctrine of Laches
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`Facebook argues that Plaintiffs’ claims for damages are barred by the four-year statute of
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`limitations and Plaintiffs’ requests for injunctive relief are precluded by the doctrine of laches.
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`Mot. 6-10. Specifically, as to Plaintiffs’ damages claims, Facebook argues that the statute of
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`limitations for antitrust claims runs from the commission of an act that injures the plaintiff. Mot.
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`6. Facebook argues that Plaintiffs challenge four independent acts: the acquisition of Instagram in
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`April 2012; the acquisition of WhatsApp in February 2014; the Whitelist and Data Sharing
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`Agreements between April 2014 and April 2015; and Facebook’s April 2015 modification of its
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`API policy. Mot. 6. Accordingly, because these acts occurred five to eight years before the
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`Complaint was filed, Facebook argues that the statute of limitations has run. Mot. 6. For similar
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`reasons, Facebook argues that Plaintiffs’ request for injunctive relief is barred by the doctrine of
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`laches because Plaintiffs’ years-long delay in bringing the action was inexcusable as each
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`challenged act was highly publicized and because Facebook was prejudiced by the unreasonable
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`delay. Mot. 7-8. Moreover, Facebook argues that fraudulent concealment does not toll the
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`limitations or laches periods because Plaintiffs have not alleged that Facebook affirmatively
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`misled Plaintiffs and because Plaintiffs had actual or constructive knowledge of facts giving rise to
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`their claims. Mot. 8. Facebook argues that because the acquisitions were publicly announced and
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`because Plaintiffs were allegedly dependent on the Friends and Newsfeed APIs, Plaintiffs would
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`have had constructive knowledge. Mot. 9. While Plaintiffs argue that they did not learn this
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`information until internal documents were released, Facebook argues that such documents have no
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`bearing on Plaintiffs’ claim as intent is not the focus of antitrust law. Mot. 10. Facebook also
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`notes that fraudulent concealment must be pled in accordance with Rule 9(b), which Plaintiffs fail
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`to do, and Plaintiffs do not allege that Facebook concealed anything relevant to their claims. Mot.
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`9.
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`Plaintiffs, on the other hand, argue that their Sherman Act claims are timely under the
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`doctrine of fraudulent concealment; their Clayton Act claim and their claim for injunctive relief
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`and divestiture are timely because they go toward ongoing conduct and harm; and their
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`monopolization claim under Section 2 of the Sherman Act is timely as to Facebook’s post-January
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`2016 conduct. Opp. 19-25. First, Plaintiffs argue that Facebook fraudulently concealed facts
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`giving rise to Plaintiffs’ Sherman Act claims from December 2012 through November 2019 and
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`that none of the publicly available facts gave rise to Plaintiffs’ claims. Opp. 19-21. Plaintiffs,
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`therefore, argue that they lacked actual and constructive knowledge of Facebook’s anticompetitive
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`scheme. Opp. 23-24. Second, Plaintiffs argue that their Clayton Act and injunctive relief claims
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`go to the back-end integration of Instagram and WhatsApp, which was unknown to Plaintiffs until
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`March 2019. Opp. 24. Additionally, Plaintiffs argue that their Clayton Act claim is timely under
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`the hold-and-use doctrine, which restarts the statute of limitations for Clayton Act violations
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`where a plaintiff asserts that that the acquisitions are used in a different manner than they were
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`used when they were acquired and the new uses injure the plaintiff. Opp. 25. Finally, Plaintiffs
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`argue that their monopolization claim under Section 2 of the Sherman Act is timely with respect to
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`conduct and damages occurring since January 16, 2016. Opp. 25.
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`Plaintiffs argue that the doctrine of laches does not apply to their claims for prospective
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`injunctive relief and their claims are timely under the doctrines of fraudulent concealment,
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`continuing violation, and hold-and-use, even though they acknowledge that the initial events
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`giving rise to these claims occurred more than four years ago. Accordingly, the Court addresses,
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`in turn, Plaintiffs’ arguments as to the doctrine of laches before turning to each tolling theory.
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`1. Doctrine of laches
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`“[T]he deadline for suits for equitable relief under the antitrust laws is governed by laches,
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`and . . . the four-year statute of limitations in 15 U.S.C. § 15b furnishes a guideline for
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`computation of the laches period.” Samsung Elecs. Co. v. Panasonic Corp., 747 F.3d 1199, 1205
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`(9th Cir. 2014). Relying on Danjaq LLC v. Sony Corp., 263 F.3d 942 (9th Cir. 2001), Plaintiffs
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`argue that the doctrine of laches does not apply to bar prospective injunctive relief, and therefore
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`their claim under Section 7 of the Clayton Act (Count IV) and their claim for injunctive relief
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`(Count VI) are timely as they seek prospective relief for anticompetitive conduct. Opp. 24.
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`Specifically, Plaintiffs argue that Facebook errs in arguing that the doctrine of laches “can
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`somehow apply here, given the recency of both the conduct and initial revelations regarding
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`Facebook’s back-end integration.” Opp. 24.
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`First, the Court notes that Danjaq is a copyright infringement case, and Plaintiffs do not
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`articulate why Danjaq should apply in the antitrust context. Second, while recognizing that
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`“laches typically does not bar prospective injunctive relief,” the Ninth Circuit noted in Danjaq that
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`“the rule is not . . . an absolute one.” Id. at 959. Indeed, the Danjaq court held that the doctrine of
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`laches barred prospective injunctive relief where the feared infringements were identical to the
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`alleged past infringements. Id. at 960. Finally, the Ninth Circuit further noted “the general rule
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`that laches does not bar future injunctive relief stems from . . . prejudice to the defendant
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`occasioned by the plaintiff’s past delay, but almost by definition, the plaintiff’s past dilatoriness is
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`unrelated to a defendant’s ongoing behavior that threatens future harm.” Id. at 959-60. Here,
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`Plaintiffs’ past delay is related to Facebook’s ongoing behavior. Plaintiffs challenge Facebook’s
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`2012 and 2014 acquisitions of Instagram and WhatsApp and seek prospective relief as to
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`Facebook’s recent decision to integrate Instagram and WhatsApp. Facebook’s allegedly recent
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`decision to integrate Instagram and WhatsApp, however, is related to Plaintiffs’ past delay in that
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`Facebook’s integration of these companies is part and parcel of acquiring a company.
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`Accordingly, the Court finds that the doctrine of laches applies to the instant case.
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`2. Fraudulent concealment
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`“A statute of limitations may be tolled if the defendant fraudulently concealed the
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`existence of a cause of action in such a way that the plaintiff, acting as a reasonable person, did
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`not know of its existence.” Hexcel Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1060 (9th Cir.
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`2012). “The plaintiff carries the burden of pleading and proving fraudulent concealment.” Id.
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`(brackets and internal quotation marks omitted). “To plead fraudulent concealment, the plaintiff
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`must allege that: (1) the defendant took affirmative acts to mislead the plaintiff; (2) the plaintiff
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`did not have ‘actual or constructive knowledge of the facts giving rise to its claim’; and (3) the
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`plaintiff acted diligently in trying to uncover the facts giving rise to its claim.” In re Animation
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`Workers Antitrust Litig., 123 F. Supp. 3d 1175, 1194 (N.D. Cal. 2015) (quoting Hexcel Corp., 681
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`F.3d at 1060)). Thus, “[a] fraudulent concealment defense requires a showing both that the
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`defendant used fraudulent means to keep the plaintiff unaware of his cause of action, and also that
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`the plaintiff was, in fact, ignorant of the existence of his cause of action.” Wood v. Santa Barbara
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`Chamber of Commerce, Inc., 705 F.2d 1515, 1521 (9th Cir. 1983). “The plaintiff is deemed to
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`have had constructive knowledge if it had enough information to warrant an investigation which,
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`if reasonably diligent, would have led to discovery of the fraud.” Beneficial Standard Life Ins. Co.
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`v. Madariaga, 851 F.2d 271, 275 (9th Cir. 1988). “It is enough that the plaintiff should have been
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`alerted to facts that, following duly diligent inquiry, could have advised it of its claim.” Hexcel
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`Corp., 681 F.3d at 1060 (internal quotation marks omitted).
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`“Moreover, allegations of fraudulent concealment must be pled with particularity.” Ryan
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`v. Microsoft Corp., 147 F. Supp. 3d 868, 885 (N.D. Cal. 2015). “Conclusory statements are not
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`enough.” Conmar Corp. v. Mitsui & Co. (U.S.A.), 858 F.2d 499, 502 (9th Cir. 1988). “However,
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`it is generally inappropriate to resolve the fact-intensive allegations of fraudulent concealment at
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`the motion to dismiss stage, particularly when the proof relating to the extent of the fraudulent
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`concealment is alleged to be largely in the hands of the alleged conspirators.” In re Animation
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`Workers, 123 F. Supp. 3d at 1194.
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`Here, Plaintiffs allege that Facebook fraudulently concealed “specific facts of its
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`anticompetitive conduct from Plaintiffs until November 6, 2019,” “[t]hrough NDAs; through
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`overbroad and/or improper assertions of privilege and confidentiality; through lies to regulators, to
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`the press, to developers, and to the public; and through other means and mechanisms of
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`intentionally suppressing and concealing from public view the true nature, motivation,
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`mechanisms, and intent of Facebook’s actions.” Compl. ¶ 386.
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`First, the Court finds that Plaintiffs have failed to sufficiently plead fraudulent concealment
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`because they have not pled that Facebook took affirmative acts to mislead them. To allege
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`fraudulent concealment, Plaintiffs must establish that “its failure to have notice of its claim was
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`the result of [Facebook’s] affirmative conduct.” Conmar, 858 F.2d at 505. “Passive concealment
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`of information is not enough to toll the statute of limitations, unless the defendant had a fiduciary
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`duty to disclose information to the plaintiff.” Id. (citation omitted). “An affirmative act of denial,
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`however, is enough if the circumstances make the plaintiff’s reliance on the denial reasonable.”
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`Id. “Thus, the mere failure to own up to illegal conduct in response to an inquiry about whether
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`the defendant engaged in illegal antitrust activity is not sufficient for fraudulent concealment, and
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`to find otherwise would effectively nullify the statute of limitations in these cases.” Ryan v.
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`Microsoft Corp., 147 F. Supp. 3d 868, 886 (N.D. Cal. 2015) (internal quotation marks omitted).
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`Here, Plaintiffs have not alleged that Facebook took any affirmative acts to mislead them.
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`Indeed, Plaintiffs rely on “Facebook’s private actions, communications and agreements between
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`2012 and 2015,” arguing that Facebook’s public-facing actions did not reveal any facts giving rise
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`to their claims. Opp. 20-21. But this is not enough for Plaintiffs to meet their burden of showing
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`that Facebook took affirmative acts to mislead them. For example, Plaintiffs list the “specifics of
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`Facebook’s fraudulent concealment” in their opposition brief, which include Mark Zuckerberg’s
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`veto of a decision to make the Friends and Newsfeed APIs available and to instead selectively
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`enforce that decision against Facebook’s competitors; Zuckerberg’s rejection of an approach that
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`would include an announcement to developers about this decision; Facebook’s decision not follow
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`a suggestion by its employees to announce that the APIs were unavailable and to negotiate access;
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`an email from a senior Facebook engineer explaining protectionist competitive concerns;
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`Facebook’s decision to enter into private whitelist and data sharing agreements; Facebook’s
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`continued evangelization of APIs to developers; and Facebook’s decision to keep “tightly
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`United States District Court
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`

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`Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 10 of 25
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`underwraps” the “real reason for the removal of the APIs.” Opp. 21-23. These allegations,
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`however, do not include affirmative conduct on the part of Facebook to mislead Plaintiffs or the
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`market, and Plaintiffs do not explain how any of these actions were affirmative acts that misled
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`them. Indeed, there are no allegations that Facebook stated that Plaintiffs would have access to the
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`APIs forever and there are no allegations concerning Facebook’s conduct after 2015.
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`Furthermore, Plaintiffs have not alleged a fiduciary relationship with Facebook or its senior
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`employees, such that Facebook would have a duty to disclose any information to Plaintiffs.
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`At the hearing, Plaintiffs relied on In re Glumetza Antitrust Lit., 2020 WL 1066934 (N.D.
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`Cal. Mar 5, 2020), for the proposition that “affirmative silence,” “intentional silence,” or “half-
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`truths” can constitute an affirmative act of concealment. But that case is inapposite. In In re
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`Glumetza, the Court noted that the defendants were under a duty to disclose before recognizing
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`that “[h]alf-truths – representations that state the truth only so far as it goes, while omitting critical
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`qualifying information – can be actionable misrepresentations.” Id. at *7. The court explained
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`that “[o]ne who chooses to speak has a duty to include as much information as necessary to
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`prevent misleading others.” Id. Here, as stated above, Plaintiffs have not alleged that Facebook
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`had a duty to disclose. Additionally, Plaintiffs have failed to allege the critical qualifying
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`information that Facebook omitted when speaking to Plaintiffs, or the market, that was necessary
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`to prevent Facebook from misleading anyone.
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`Second, the Court finds that Plaintiffs have not sufficiently pled fraudulent concealment as
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`they have not plausibly alleged that they were without actual or constructive knowledge of the
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`facts giving rise to their claim. For example, Facebook’s acquisitions of Instagram and WhatsApp
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`were widely publicized in 2012 and 2014 respectively; Facebook announced in a blogpost on
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`April 30, 2014, that access to the Friends and Newsfeed APIs would be removed; and the Wall
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`Street Journal reported on the Whitelist and Data Sharing Agreements in September 2015. Reply
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`2-3; Mot. 6; see Compl. ¶¶ 202, 205, 260, 290. Thus, at the very least, Plaintiffs had constructive
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`knowledge of the facts that give rise to their claims.
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`Finally, the Court finds that Plaintiffs have not sufficiently pled fraudulent concealment
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`because Plaintiffs fail to allege how they acted diligently in trying to uncover the facts giving rise
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`10
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`Northern District of California
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`United States District Court
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`

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`Case 5:20-cv-00363-BLF Document 61 Filed 07/08/20 Page 11 of 25
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`to their claims. “Diligent inquiry is required where facts exist that would excite the inquiry of a
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`reasonable person,” and diligence must be pled with particularity. In re Glumetza, 2020 WL
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`1066934, at *6 (internal quotation marks omitted). Here, the publicly available facts regarding
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`Facebook’s allegedly anticompetitive conduct would excite the inquiry of a reasonable person, and
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`therefore Plaintiffs must plead diligence with particularity. They have failed to do so here.
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`Indeed, Plaintiffs do not appear to include any allegations on this element and it appears that they
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`simply waited until Facebook’s internal documents were release in November 2019 to uncover
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`their claims. This, however, is not indicative of diligence.
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`Accordingly, for the reasons stated above, the Court finds that Plaintiffs have not
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`sufficiently pled fraudulent concealment as to their Sherman Act claims (Counts I, II, III, and V).
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`3. Continuing violation
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`“To state a continuing violation of the antitrust laws in the Ninth Circuit, a plaintiff must
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`allege that a defendant completed an overt act during the limitations period that meets two criteria:
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`1) It must be a new and independent act that is not merely a reaffirmation of a previous act; and 2)
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`it must inflict new and accumulating injury on the plaintiff.” Samsung Elecs. Co. v. Panasonic
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`Corp., 747 F.3d 1199, 1202 (9th Cir. 2014); accord Oliver v. SD-3C LLC, 751 F.3d 1081, 1086
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`(9th Cir. 2014) (stating limitations begins to run from date of each “new overt act causing injury”).
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`Plaintiffs argue that their Section 7 claim under the Clayton Act related to Facebook’s
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`acquisition and integration of Instagram and WhatsApp (Count IV) and their claim for injunctive
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`relief (Count VI) are timely as the conduct and harm are ongoing “until March 2019 at the
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`earliest” based on “the recency of both the conduct and initial revelations regarding Facebook’s
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`back-end integration.” Opp. 24. Additionally, Plaintiffs argue that their Section 2 claims under
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`the Sherman Act regarding the acquisition and integration of Instagram and WhatsApp (Count V)
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`is timely as to all conduct and damages occurring since January 16, 2016. Opp. 25. Specifically,
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`Plaintiffs argue that Facebook’s March 2019 announcement about the ongoing back-end
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`integration of Instagram and WhatsApp constitutes a new act that is not a reaffirmation of a
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`previous act and inflicts a new and accumulating injury on at least Plaintiff Lenddo. Opp. 25.
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`The Court disagrees. The continuing violation doctrine does not make sense in the context
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`United States District Court
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`

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`of anticompetitive mergers, and therefore it should not apply to Section 7 claims under the
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`Clayton Act. See Midwestern Mach. Co. v. Nw. Airlines, Inc., 392 F.3d 265, 271 (8th Cir. 2004);
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`Complete Entm’t Res. LLC v. Live Nation Entm’t, Inc., No. CV159814DSFAGRX, 2016 WL
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`3457177, at *1 (C.D. Cal. May 11, 2016). “Section 7 of the Clayton Act is the mechanism for
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`challenging a potentially anticompetitive merger,” and it has a statute of limitations within which
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`mergers must be challenged. Complete Entm’t Res., 2016 WL 3457177, at *1. If the continuing
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`violation doctrine applied, “every business decision could qualify as a continuing violation to
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`restart the statute of limitations as long as the firm continued to desire to be merged.” Midwestern
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`Mach., 392 F.3d at 271. This would write the statute of limitations out of the law by allowing a
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`merger to be challenged indefinitely. See Complete Entm’t Res., 2016 WL 3457177, at *1. This
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`cannot be the case because “[u]nlike a conspiracy or the maintaining of a monopoly, a merger is a
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`discrete act, not an ongoing scheme, and “[o]nce the merger is completed, the plan to merge is
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`completed, and no overt acts can be undertaken to further that plan.” Midwestern Mach., 392 F.3d
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`at 271. Thus, the Court agrees with the Eighth Circuit and the Central District of California that
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`the continuing violation doctrine does not apply in the context of Section 7 claims under the
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`Clayton Act.
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`Moreover, while the Sherman Act regulates a broader swath of conduct than the Clayton
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`Act, Plaintiffs’ claim under Count V is for an acquisition-merger monopoly, which is the precise
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`conduct governed by the Clayton Act. See Compl. ¶ 433 (“Through Facebook’s acquisition and
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`integration of Instagram and WhatsApp, Defendant has willfully acquired and maintai