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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`FACEBOOK, INC.,
`Plaintiff,
`
`v.
`
`BRANDTOTAL LTD., et al.,
`Defendants.
`
`Case No. 20-cv-07182-JCS
`
`ORDER REGARDING MOTION FOR
`LEAVE TO AMEND AND MOTION TO
`DISMISS SECOND AMENDED
`COUNTERCLAIMS
`Re: Dkt. Nos. 161, 169
`
`
`
`
`
`I.
`
`INTRODUCTION
`Plaintiff Facebook, Inc. brought this action asserting that Defendants BrandTotal Ltd. and
`Unimania, Inc. (collectively, “BrandTotal”) improperly collected data from Facebook’s social
`networks. BrandTotal, which is in the business of analyzing advertising data collected from social
`media websites, asserts counterclaims based on Facebook’s efforts to block its collection of data.
`The Court previously dismissed some of BrandTotal’s counterclaims, including a counterclaim
`under the “unfair” prong of California’s Unfair Competition Law (the “UCL”), which the Court
`dismissed with leave to amend. BrandTotal has amended that counterclaim and seeks leave to
`assert a new counterclaim for defamation. Facebook opposes adding the new defamation
`counterclaim and moves again to dismiss the amended UCL “unfairness” counterclaim. The Court
`held a hearing on August 27, 2021. For the reasons discussed below, BrandTotal’s motion for
`leave to add a defamation counterclaim is DENIED, and Facebook’s motion to dismiss the
`“unfairness” counterclaim is GRANTED. Facebook shall answer the surviving counterclaims,
`which are not affected by this order, no later than September 14, 2021.1
`
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`1 The parties have consented to the jurisdiction of a magistrate judge for all purposes pursuant to
`28 U.S.C. § 636(c).
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`II.
`
`BACKGROUND
`This order assumes the parties’ familiarity with the background of the case, which is set
`forth at greater length in the Court’s previous orders denying BrandTotal’s motion for a temporary
`restraining order, Order Denying TRO (dkt. 63),2 granting Facebook’s motion to dismiss
`BrandTotal’s original counterclaims with leave to amend, Order re 1st MTD (dkt. 108),3 and
`granting in part Facebook’s motion to dismiss BrandTotal’s first amended counterclaims, Order re
`2d MTD (dkt. 158).4 The factual allegations summarized here are drawn from BrandTotal’s
`counterclaims, which are taken as true for the purpose of Facebook’s motion to dismiss. Nothing
`in this order should be construed as resolving any issue of fact that might be disputed at a later
`stage of the case.
`
`A. BrandTotal’s Allegations
`In brief, and as is relevant to the present motions, Facebook operates social networks with
`billions of users, including the eponymous Facebook network and Instagram. BrandTotal collects
`advertising data from various social networks, including Facebook’s, to prepare analysis that it
`sells to corporate advertisers. One of the means that BrandTotal has used to collect such data is a
`program called UpVoice, where users whom BrandTotal calls “panelists” voluntarily install a
`browser extension that tracks and records the advertisements displayed to those users through
`social media, and in return, BrandTotal provides those panelists gift cards as compensation. The
`version of UpVoice in use before commencement of this litigation automatically recorded not only
`data about the ads that users saw, but also users’ demographic information, which the browser
`extension collected from Facebook.
`On September 21, 2020, Facebook wrote to Google that UpVoice was “improperly
`scraping user PII (e.g., gender, relationship status, ad interests, etc.) without proper disclosure.”
`2d Am. Counterclaim (“SACC,” dkt. 161-2) ¶ 69. Google removed UpVoice from its Chrome
`
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`2 Facebook, Inc. v. BrandTotal Ltd., 499 F. Supp. 3d 720 (N.D. Cal. 2020). Citations herein to
`previous orders in this case refer to page numbers of the versions filed in the Court’s ECF docket.
`3 Facebook, Inc. v. BrandTotal Ltd., No. 20-cv-07182-JCS, 2021 WL 662168 (N.D. Cal. Feb. 19,
`2021).
`4 Facebook, Inc. v. BrandTotal Ltd., No. 20-cv-07182-JCS, 2021 WL 2354751 (N.D. Cal. June 3,
`2021).
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`web store, significantly limiting UpVoice’s availability and effectiveness, which in turn limited
`BrandTotal’s ability to gather data for its corporate customers. Id. ¶ 72. Facebook has also
`removed BrandTotal’s accounts from Facebook’s networks. Id. ¶ 68.
`During this litigation, BrandTotal modified UpVoice to automatically collect only data
`about ads and to rely on panelists self-reporting their demographic information, and Facebook has
`agreed not take action against that modified version of UpVoice pending the outcome of this case
`without providing advance notice to BrandTotal. See Order Denying as Moot Mot. for Prelim. Inj.
`(dkt. 160).
`
`B. Previous Orders and Relevant Procedural History
`The Court previously dismissed BrandTotal’s claim for violation of the “unfair” prong of
`the UCL, with leave to amend, for failure to allege at least a threatened violation of the antitrust
`laws, or some special circumstances that would allow that a claim to proceed without a clear
`connection to the antitrust laws. Order re 1st MTD at 16–17; Order re 2d MTD at 24–28. The
`Court noted that BrandTotal had not alleged either a coherent and plausible product market or an
`exception to the general rule that a market participant may permissibly refuse to deal with a rival.
`Order re 2d MTD at 26–28.
`At a case management conference on February 19, 2021, the Court set a deadline of March
`22, 2021 for the parties to seek leave to amend their pleadings, adopting the date jointly proposed
`in the parties’ case management statement. Civil Minute Order (dkt. 106); see Case Mgmt.
`Statement (dkt. 99) at 12. On March 18, 2021, the Court granted the parties’ stipulation to extend
`the deadline to amend pleadings from March 22, 2021 to May 21, 2021 to accommodate the time
`needed for BrandTotal to produce discovery that might be relevant to Facebook amending its
`complaint. See dkt. 130. As an exception to that deadline, the Court’s June 3, 2021 order on
`Facebook’s second motion to dismiss allowed BrandTotal to amend certain claims the Court
`dismissed without prejudice—for interference with BrandTotal’s contracts with investors, for
`interference with BrandTotal’s prospective economic advantage with respect to potential
`customers, and for violation of the “unfair” prong of the UCL—no later than June 25, 2021.
`Order re 2d MTD at 30.
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`C. Counterclaims at Issue
`BrandTotal’s second amended counterclaims include counterclaims the Court previously
`allowed to proceed (which are not at issue in the present motion), as well as a new counterclaim
`for defamation, SACC ¶¶ 140–51, and an amended counterclaim for violation of the UCL’s
`“unfair” prong, see id. ¶¶ 152–77. The latter now rests on an alleged “market for Third-Party
`Commercial Advertising Information on personal social networking services in the United States,”
`or in the alternative, such information pertaining to advertising “on the Facebook.com site and
`Instagram platform.” Id. ¶¶ 155–59. “Third-Party Commercial Advertising Information” is
`defined as “analytics about non-SIEP advertisements run by third-party business[es].” Id. ¶ 15.5
`
`D. The Parties’ Arguments
`BrandTotal moves for leave to add the new defamation counterclaim, arguing there is good
`cause to modify the scheduling order under Rule 16(b)(4) of the Federal Rules of Civil Procedure
`because “facts of this case are unusual and identifying the cause of action that fits and redresses
`the full harm of this situation, complex.” Defs.’ Mot. (dkt. 161) at 6. BrandTotal also argues that
`amendment should be allowed under the liberal standard of Rule 15(a)(2). Id. at 6–7. Facebook
`contends that BrandTotal learned of the relevant facts underlying its defamation counterclaim
`months before it filed its first amended counterclaims in March of 2021, and thus was not diligent
`in waiting until well after the May 2021 deadline for amendment to seek to add this new
`counterclaim. Pl.’s Mot. & Opp’n (dkt. 169) at 5–7. Facebook also argues that leave to amend
`would be futile because its statement to Google about BrandTotal’s failure to provide sufficient
`disclosures was true, citing a potential issue with shared computers. Id. at 7–8.
`Facebook moves to dismiss once again BrandTotal’s counterclaim under the UCL’s
`“unfair” prong for failure to allege a plausible relevant market, id. at 9–12, failure to allege
`monopoly power, id. at 12–13, and failure to allege an exception to the rule allowing refusal to
`
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`5 “SIEP” refers to “social issues, elections or politics.” Facebook provides more public
`information about SIEP advertisements than it provides about to other ads. See SACC ¶ 22. SIEP
`ads are not directly at issue in this case and are generally not relevant to BrandTotal’s clients.
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`deal, id. at 13–17.6 BrandTotal argues that it has alleged a violation of the spirit of the antitrust
`laws because Facebook is unfairly relying on an order the Federal Trade Commission (“FTC”) to
`exclude competitors from the market for advertising data. Defs.’ Opp’n & Reply (dkt. 170) at 8–
`10. BrandTotal also contends that it has sufficiently alleged a product market (or more
`specifically, two potential product markets in the alternative) and monopoly power. Id. at 10–14.
`As for refusal to deal, BrandTotal argues that it “is not asking Facebook to authorize BrandTotal’s
`access” to advertising data, but instead seeking to bar Facebook from using third parties like
`Google and the FTC to interference with BrandTotal’s business, and challenging Facebook’s
`removal of BrandTotal’s accounts on Facebook, which eliminated BrandTotal’s ability to
`advertise its own services on Facebook. Id. at 14–16. BrandTotal contends that Facebook’s
`reports to Google and the FTC do not implicate the refusal-to-deal rule, and that BrandTotal’s
`accounts and past course of dealing in advertising on Facebook fall within the exception
`recognized by Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985). Defs.’
`Opp’n & Reply at 10–14.
`In a “Notice of Supplemental Event” filed after briefing on the present motions had closed,
`BrandTotal submitted: (1) an August 3, 2021 press release by Facebook indicating that it had
`disabled access by certain New York University researchers who had been collecting advertising
`data in a manner at least arguably similar to BrandTotal, with Facebook having acted purportedly
`to protect user privacy and comply with an order by the FTC; and (2) an August 5, 2021 letter
`from an FTC official to Facebook’s CEO asserting that the FTC’s order did not prohibit Facebook
`allowing the sort of research at issue, that Facebook had failed to comply with a commitment to
`update the FTC about significant events, and that Facebook’s press release was misleading. See
`dkt. 173. These developments are not relevant to the Court’s analysis of the present motions.
`
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`6 Facebook also moves to dismiss BrandTotal’s counterclaim under the “unlawful” prong of the
`UCL to the extent that it rests on the new defamation counterclaim. The parties agree that to the
`extent that counterclaim is based on the defamation counterclaim (as opposed to the tortious
`interference counterclaims the Court previously allowed to proceed) they rise or fall together. See
`Defs.’ Opp’n & Reply at 17.
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`Northern District of California
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`Case 3:20-cv-07182-JCS Document 178 Filed 08/31/21 Page 6 of 18
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`III. ANALYSIS
`
`A. Motion for Leave to Amend
`1.
`Legal Standard
`Deviations from scheduling orders, including with respect to amendment of pleadings, are
`governed by Rule 16 of the Federal Rules of Civil Procedure, which provides that such orders
`“may be modified only for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4).
`BrandTotal concedes that Rule 16(b)(4) governs its motion in this case. See Defs.’ Opp’n &
`Reply at 3–4.
`The Ninth Circuit has established a standard for such modification that focuses on the
`diligence of the party seeking relief from a deadline:
`
`Unlike Rule 15(a)’s liberal amendment policy . . . , Rule 16(b)’s
`“good cause” standard primarily considers the diligence of the party
`seeking the amendment. The district court may modify the pretrial
`schedule “if it cannot reasonably be met despite the diligence of the
`party seeking the extension.” Fed. R. Civ. P. 16 advisory committee’s
`notes (1983 amendment). Moreover, carelessness is not compatible
`with a finding of diligence and offers no reason for a grant of relief.
`Although the existence or degree of prejudice to the party opposing
`the modification might supply additional reasons to deny a motion,
`the focus of the inquiry is upon the moving party’s reasons for seeking
`modification. If that party was not diligent, the inquiry should end.
`Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (citations omitted).
`Courts look to a party’s diligence not only in complying with the scheduling order after it has been
`issued, but also “in creating a workable Rule 16 scheduling order,” as well as “in seeking
`amendment of the Rule 16 order, once it became apparent that [the party] could not comply with
`the order.” Jackson v. Laureate, Inc., 186 F.R.D. 605, 607 (E.D. Cal. 1999).
`
`2.
`BrandTotal Has Not Shown Diligence
`“BrandTotal does not dispute that it learned of Facebook’s false statement to Google
`through discovery in the December 2020–January 2021 timeframe and then sought to amend in
`June 2021,” but argues that the complexity of factual and legal issues in this case, and its good
`faith attempt to assert a related claim under the “fraudulent” prong of the UCL in the first instance,
`demonstrate good cause for delay. Defs.’ Opp’n & Reply at 4–5.
`While this case contains a number of complex issues, the question of whether a
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`purportedly false statement about BrandTotal that harmed BrandTotal’s business interests might
`support a defamation claim is not among them. BrandTotal has identified no complexity with
`respect to that counterclaim that would have prevented BrandTotal from including it in
`BrandTotal’s March 5, 2021 first amended counterclaims (which included all of the factual
`allegations on which BrandTotal now rests its defamation counterclaim)—much less anything that
`prevented BrandTotal from at least raising the possibility of amendment and seeking an extension
`of the amendment deadline before it expired on May 21, 2021, several months after BrandTotal
`discovered the facts at issue.
`District courts have rejected motions to amend a scheduling order to permit amendment
`based on facts previously alleged:
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`In sum, the allegations Plaintiff seeks to add to the complaint are not
`comprised of newly discovered facts, but facts that have already been
`known and pled by Plaintiff in the FAC or facts that Plaintiff has
`known, or should have known since the inception of the lawsuit or at
`the time he amended his complaint in 2012, but failed to raise. Thus,
`the basis for amendment does not establish Plaintiff’s diligence in
`seeking to amend the complaint to include these allegations.
`Bever v. CitiMortgage, Inc., No. 1:11-cv-01584-AWI, 2014 WL 1577250, at *9 (E.D. Cal. Apr.
`18, 2014), aff’d on other grounds, 708 F. App’x 341 (9th Cir. 2017). BrandTotal identifies no
`case holding a party’s failure to recognize a legal theory implicated by the facts it has already
`alleged to be consistent with diligence under Rule 16(b)(4). Instead, the cases BrandTotal cites
`that permitted comparable amendments were decided under Rule 15’s liberal standard for
`amendment, not the more stringent standard applicable to modifying a scheduling order. See
`Defs.’ Opp’n & Reply at 5–6 (citing Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1053
`(9th Cir. 2003); Ill. Tool Works, Inc. v. MOC Prod. Co., No. 09CV1887 JLS (AJB), 2010 WL
`4314296 (S.D. Cal. Oct. 26, 2010)).
`In the first amended counterclaims that BrandTotal filed before the amendment deadline, it
`chose to pursue a relatively complex claim under the “fraudulent” prong of the UCL based on
`Facebook’s purported misrepresentation to Google. It is not clear why BrandTotal chose that
`claim over a relatively more straightforward defamation claim, or why it did not bring both
`claims—BrandTotal states only that it “admittedly struggled to identify the right cause of action
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`(almost all of which pre-date the Internet age).” Defs.’ Opp’n & Reply at 4. If BrandTotal made a
`tactical choice to pursue only the UCL claim in the first instance, it did so knowing the risk that
`the amendment deadline would expire before the Court assessed that claim’s viability. If
`BrandTotal merely overlooked its potential defamation claim, “carelessness is not compatible with
`a finding of diligence and offers no reason for a grant of relief.” Johnson, 975 F.2d at 609.
`Because BrandTotal has not shown diligence in seeking to comply with the scheduling
`order, the motion for leave to amend to add a defamation counterclaim, and to expand
`BrandTotal’s counterclaim under the “unlawful” prong of the UCL to encompass defamation as a
`predicate, is DENIED. The Court does not reach the parties’ arguments as to whether amendment
`would be futile.
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`B. Motion to Dismiss
`1.
`Legal Standard
`A complaint may be dismissed for failure to state a claim on which relief can be granted
`under Rule 12(b)(6) of the Federal Rules of Civil Procedure. “The purpose of a motion to dismiss
`under Rule 12(b)(6) is to test the legal sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp.
`Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). Generally, a claimant’s burden at the pleading stage
`is relatively light. Rule 8(a) of the Federal Rules of Civil Procedure states that a “pleading which
`sets forth a claim for relief . . . shall contain . . . a short and plain statement of the claim showing
`that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a).
`In ruling on a motion to dismiss under Rule 12(b)(6), the court takes “all allegations of
`material fact as true and construe[s] them in the light most favorable to the non-moving party.”
`Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal may be based on a
`lack of a cognizable legal theory or on the absence of facts that would support a valid theory.
`Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A pleading must “contain
`either direct or inferential allegations respecting all the material elements necessary to sustain
`recovery under some viable legal theory.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007)
`(citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)). “A pleading
`that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action
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`will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).
`“[C]ourts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.’”
`Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a
`complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal,
`556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). Rather, the claim must be “‘plausible on its
`face,’” meaning that the claimant must plead sufficient factual allegations to “allow the court to
`draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting
`Twombly, 550 U.S. at 570).
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`2.
`The UCL
`California’s UCL broadly prohibits unlawful, unfair, and fraudulent business acts. Korea
`Supply, 29 Cal. 4th at 1143. “Unlawful acts are anything that can properly be called a business
`practice and that at the same time is forbidden by law . . . be it civil, criminal, federal, state, or
`municipal, statutory, regulatory, or court-made, where court-made law is, for example a violation
`of a prior court order.” Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1151 (9th Cir.
`2008) (ellipsis in original) (citations and internal quotation marks omitted). “Unfair acts among
`competitors means ‘conduct that threatens an incipient violation of an antitrust law, or violates the
`spirit or policy of those laws because its effects are comparable to or the same as a violation of the
`law, or otherwise significantly threatens or harms competition.’” Id. at 1152 (quoting Cel-Tech
`Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999)). “Finally, fraudulent acts
`are ones where members of the public are likely to be deceived.” Id.
`An “unfair” claim by a competitor under the UCL generally must implicate the antitrust
`laws. See Sybersound, 517 F.3d at 1152. “When a plaintiff who claims to have suffered injury
`from a direct competitor’s ‘unfair’ act or practice invokes section 17200, the word ‘unfair’ in that
`section means conduct that threatens an incipient violation of an antitrust law, or violates the
`policy or spirit of one of those laws because its effects are comparable to or the same as a violation
`of the law, or otherwise significantly threatens or harms competition.” Cel-Tech, 20 Cal. 4th at
`187. Courts have dismissed competitors’ claims under this prong of the statute where plaintiffs
`fail to identify “any ‘unusual’ aspect of the alleged conduct that would make that conduct
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`something that violates the ‘policy and spirit’ of the antitrust laws without violating the actual
`laws themselves,” comparable to the Cel-Tech defendant’s “‘privileged status as one of two
`holders of a lucrative government-licensed duopoly.’” Synopsys, Inc. v. ATopTech, Inc., No. C
`13-2965 MMC, 2015 WL 4719048, at *10 (N.D. Cal. Aug. 7, 2015) (quoting Cel-Tech, 20 Cal.
`4th at 190); see also Creative Mobile Techs., LLC v. Flywheel Software, Inc., No. 16-cv-02560-SI,
`2017 WL 679496, at *6 (N.D. Cal. Feb. 21, 2017).
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`3.
`BrandTotal’s Theories of Unfair Competition
`BrandTotal primarily pursues three theories of unfair competition: (1) the theory that
`“Facebook’s failure to give permission to any entities to collect Third-Party Commercial
`Advertising Information . . . allows Facebook to shirk its legal obligations under the FTC Order by
`failing to establish a Privacy Program,” violating the spirit of the antitrust laws, see SACC ¶ 155;7
`(2) the theory that Facebook has “has refused to deal with [BrandTotal] by terminating both the
`business and personal Facebook accounts of [BrandTotal] and [its] principals and by refusing to
`accept advertising from [BrandTotal],” id. ¶ 168; and (3) the theory that “Facebook interjects itself
`into the marketplace and takes active steps to destroy competitors” by, for example, having
`“contacted Google and made false and misleading statements about the operation of UpVoice and
`another of [BrandTotal’s] applications, knowing that Google would remove those applications
`from the Google Chrome Store,” id. ¶ 163.
`
`a.
`Failure to Grant Permission
`BrandTotal contends that Facebook’s refusal to grant BrandTotal and others permission to
`
`
`7 The extent to which BrandTotal intends to pursue a theory based on Facebook’s refusal to
`provide permission to access data is unclear. Compare Defs.’ Opp’n & Reply at 8 (asserting that
`Facebook violates the spirit of the antitrust laws by “using the FTC Order to gain a competitive
`advantage by intentionally refusing to provide permission to any entity that seeks to collect Third-
`Party Commercial Advertising Information from Facebook’s sites”); with id. at 14 (“BrandTotal’s
`SAC presents two theories under which Facebook’s behavior violates the unfair prong of the UCL.
`First, BrandTotal alleges Facebook interjects itself into the marketplace by petitioning Google to
`remove applications and extensions that compete with Facebook’s advertising services. . . .
`Second, BrandTotal alleges Facebook stifles competition by punishing entities by removing the
`business and personal account pages of its competition and their principals and employees.”).
`Despite BrandTotal’s assertion that it “is not asking Facebook to authorize BrandTotal’s access,”
`id. at 14, the Court addresses in an abundance of caution BrandTotal’s allegation that failure to
`authorize such access is anticompetitive, see id. at 8; SACC ¶ 155.
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`access advertising data violates the spirit of the antitrust laws, such that BrandTotal need to track
`the precise contours of a Sherman Act claim to pursue a claim under the “unfair” prong of the
`Sherman Act. Defs.’ Opp’n & Reply at 8–9. As described in a decision from this district, the
`California Supreme Court has recognized “that it is not just conduct that threatens a violation of an
`actual antitrust law that supports a UCL unfairness claim,” but also “conduct that ‘violates the
`policy or spirit of one of those laws because its effects are comparable to or the same as a violation
`of the law, or otherwise significantly threatens or harms competition.’” Diva Limousine, Ltd. v.
`Uber Techs., Inc., 392 F. Supp. 3d 1074, 1090–91 (N.D. Cal. 2019) (quoting Cel-Tech, 20 Cal. 4th
`at 187). Such a violation must be “be tethered to some legislatively declared policy or proof of
`some actual or threatened impact on competition.” Cel-Tech, 20 Cal. 4th at 186–87.
`As a starting point, the U.S. Supreme Court has recognized that a market participant’s right
`to refuse to deal with competitors generally serves procompetitive purposes, and that restricting
`that right can have anticompetitive effects:
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`Firms may acquire monopoly power by establishing an infrastructure
`that renders them uniquely suited to serve their customers.
`Compelling such firms to share the source of their advantage is in
`some tension with the underlying purpose of antitrust law, since it
`may lessen the incentive for the monopolist, the rival, or both to invest
`in those economically beneficial facilities. Enforced sharing also
`requires antitrust courts to act as central planners, identifying the
`proper price, quantity, and other terms of dealing—a role for which
`they are ill suited. Moreover, compelling negotiation between
`competitors may facilitate the supreme evil of antitrust: collusion.
`Thus, as a general matter, the Sherman Act “does not restrict the long
`recognized right of [a] trader or manufacturer engaged in an entirely
`private business, freely to exercise his own independent discretion as
`to parties with whom he will deal.” United States v. Colgate & Co.,
`250 U.S. 300, 307 (1919).
`Verizon Commc’ns Inc. v. L. Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 407–08 (2004)
`(alteration in original). That general rule is subject to “one, limited exception” involving
`termination of a course of past dealing, which is not applicable to advertising data that Facebook
`has never authorized anyone to access. See Fed. Trade Comm’n v. Qualcomm Inc., 969 F.3d 974,
`994–95 (9th Cir. 2020) (citing Aspen Skiing, 472 U.S. 585). In light of Supreme Court precedent
`treating the right to refuse to deal as generally procompetitive, BrandTotal faces an uphill battle to
`show that Facebook’s refusal to grant permission to access advertising data violates the spirit of
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`the antitrust laws.
`The only case BrandTotal cites allowing a UCL unfairness claim to proceed based on the
`spirit of the antitrust laws is Diva Limousine, 392 F. Supp. 3d 1074, which involved allegations
`that Uber had misclassified its drivers as independent contractors rather than employees. In
`holding that the plaintiff stated a claim under the “unfair” prong, Judge Chen cited the California
`Labor Code’s statement of “‘the policy of this state to vigorously enforce minimum labor
`standards in order . . . to protect employers who comply with the law from those who attempt to
`gain a competitive advantage at the expense of their workers by failing to comply with minimum
`labor standards,’” and the California Supreme Court’s recognition of “‘the unfair competitive
`advantage the business may obtain over competitors that properly classify similar workers as
`employees.’” Id. at 1091 (quoting Cal. Lab. Code § 90.5(a); Dynamex Operations W. v. Superior
`Court, 4 Cal. 5th 903, 913 (2018)) (emphasis omitted).
`Here, BrandTotal has not identified any legislatively declared policy related to competition
`implicated by Facebook’s alleged conduct. In a footnote, BrandTotal cites a provision of the
`California Consumer Privacy Act (“CCPA”) defining “personal information” as including
`“‘information regarding a consumer’s interaction with an internet website, application, or
`advertisement.’” Defs.’ Opp’n & Reply at 8 n.4 (quoting Cal. Civ. Code § 1798.140(o)(1)(F))
`(emphasis omitted). The Court has previously rejected BrandTotal’s scattershot citations to the
`CCPA that failed to tie that law’s actual requirements to the conduct at issue in this case. See
`Order Denying TRO at 22 n.11. So too here. The fact that information about advertising
`interactions falls within the statute’s definition of “personal information” does not, in itself, say
`anything about whether Facebook must provide BrandTotal access to such information, nor
`whether the legislature has identified restrictions of such access as implicating competition.
`BrandTotal also relies heavily on the FTC’s April 27, 2020 order requiring Facebook to
`take certain steps to protect user privacy. See SACC Ex. C. Nothing on the face of the FTC’s
`order requires Facebook to allow BrandTotal the sort of access it seeks. BrandTotal cites the
`order’s requirement that Facebook create a “Privacy Program,” which it argues Facebook
`breached by failing to grant any third parties permission to collect advertising data. Defs.’ Opp’n
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