Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 1 of 30
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`
`
`SONAL N. MEHTA (SBN 222086)
` Sonal.Mehta@wilmerhale.com
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, California 94303
`Telephone: (650) 858-6000
`Facsimile: (650) 858-6100
`
`DAVID Z. GRINGER (pro hac vice)
` David.Gringer@wilmerhale.com
`ARI HOLTZBLATT (pro hac vice)
` Ari.Holtzblatt@wilmerhale.com
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave NW
`Washington, DC 20006
`Telephone: (202) 663-6000
`Facsimile: (202) 663-6363
`
`Attorneys for Defendant
`FACEBOOK, INC.
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN JOSE DIVISION
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`
`
`
`
`
`
`
`
`MAXIMILIAN KLEIN, et al., on behalf of
`themselves and all others similarly situated,
`
`v.
`
`FACEBOOK, INC.,
`
`Plaintiffs,
`
`Defendant.
`
`
`
` Case No. 5:20-cv-08570-LHK
`
`DEFENDANT FACEBOOK, INC.’S
`REPLY IN SUPPORT OF MOTION
`TO DISMISS
`
`Hearing Date: July 15, 2021
`Time: 1:30 pm
`Judge: Hon. Lucy H. Koh
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 2 of 30
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`
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`TABLE OF CONTENTS
`
`INTRODUCTION ...........................................................................................................................1
`
`ARGUMENT ...................................................................................................................................3
`
`I.
`
`PLAINTIFFS’ SECTION 2 CLAIMS ARE TIME-BARRED ............................................3
`
`A.
`
`The Continuing Violation Doctrine Does Not Save Plaintiffs’ Claims ...................3
`
`1.
`
`2.
`
`Users Cannot Invoke The Continuing Violation Doctrine ..........................4
`
`Advertisers Cannot Invoke The Continuing Violation Doctrine .................5
`
`B.
`
`Fraudulent Concealment Does Not Save Plaintiffs’ Claims ....................................6
`
`1.
`
`2.
`
`Users Do Not Plausibly Allege Fraudulent Concealment ............................6
`
`Advertisers Do Not Plausibly Allege Fraudulent Concealment ..................8
`
`C.
`
`Laches Bars All Plaintiffs’ Claims For Injunctive Relief ........................................8
`
`II.
`
`PLAINTIFFS FAIL TO PLAUSIBLY DEFINE A RELEVANT PRODUCT
`MARKET .............................................................................................................................9
`
`A.
`
`B.
`
`Advertisers Cannot Rely On A “Social Advertising” Submarket ...........................9
`
`Users Fail To Plausibly Allege A Relevant Market Or Monopoly Power ............10
`
`1.
`
`2.
`
`Implausible Relevant Markets ...................................................................10
`
`Users Have Failed To Allege Monopoly Power ........................................12
`
`III.
`
`PLAINTIFFS HAVE NOT ADEQUATELY ALLEGED EXCLUSIONARY
`CONDUCT ........................................................................................................................13
`
`A.
`
`B.
`
`C.
`
`Users’ Deception Theory Is Still Not Pleaded With Particularity .........................13
`
`Users’ Deception Theory Fails ..............................................................................14
`
`Plaintiffs’ Monopoly Maintenance Theories Are Not Cognizable ........................15
`
`1.
`
`2.
`
`3.
`
`Facebook’s Acquisitions Were Not Exclusionary .....................................15
`
`Plaintiffs’ Product Improvement Claims Are Non-Cognizable .................16
`
`Allegations That Facebook “Killed” App Developers Are
`Insufficient .................................................................................................17
`
`IV.
`
`PLAINTIFFS LACK ANTITRUST STANDING .............................................................18
`
`Users Have Not Alleged An Antitrust Injury ........................................................18
`A.
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 3 of 30
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`
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`1.
`
`2.
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`Lost “Information And Attention” Is Not A Cognizable Injury ................18
`
`Users’ Injuries Are Speculative And Not Caused By Lost
`Competition................................................................................................19
`
`B.
`
`Advertisers Have Not Alleged An Antitrust Injury ...............................................19
`
`1.
`
`2.
`
`Alleged Injuries From Advertisers’ Section 2 Claims Are
`Conclusory .................................................................................................19
`
`Advertisers Lack Antitrust Standing To Pursue Their Section 1
`Claim ..........................................................................................................20
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`V.
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`USERS FAIL TO STATE A CLAIM FOR UNJUST ENRICHMENT ............................20
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`CONCLUSION ..............................................................................................................................20
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 4 of 30
`
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Abuelhawa v. Santa Clara University,
`2021 WL 1176689 (N.D. Cal. Mar. 39, 2021) ...................................................................20
`
`Allied Orthopedic Appliances Inc. v. Tyco Health Care Group LP,
`592 F.3d 991 (9th Cir. 2010) .............................................................................................16
`
`American Professional Testing Service, Inc. v. Harcourt Brace Jovanovich Legal &
`Professional Publications, Inc.,
`108 F.3d 1147 (9th Cir. 1997) ...........................................................................................14
`
`Arista Networks, Inc. v. Cisco Systems Inc.,
`2018 WL 11230167 (N.D. Cal. May 21, 2018) .................................................................14
`
`Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,
`472 U.S. 585 (1985) ...........................................................................................................17
`
`Atl. Richfield Co. v. USA Petroleum Co.,
`495 U.S. 328 (1990) ...........................................................................................................20
`
`Bay Area Surgical Management LLC v. Aetna Life Insurance Co.,
`166 F. Supp. 3d 988 (N.D. Cal. 2015) .................................................................................5
`
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) .................................................................................................3, 15, 19
`
`Berkey Photo, Inc. v. Eastman Kodak Co.,
`603 F.2d 263 (2d. Cir. 1979)..............................................................................................14
`
`Brown v. Google LLC,
`2021 WL 949372 (N.D. Cal. Mar. 12, 2021) .......................................................................7
`
`Caribbean Broadcasting System, Ltd. v. Cable & Wireless P.L.C.,
`148 F.3d 1080 (D.C. Cir. 1998) .........................................................................................14
`
`City of Anaheim v. Southern California Edison Co.,
`955 F.2d 1373 (9th Cir. 1992) ...........................................................................................15
`
`Conmar Corp. v. Mitsui & Co. (U.S.A.), Inc.,
`858 F.2d 499 (9th Cir. 1988) ...............................................................................................7
`
`Danjaq LLC v. Sony Corp.,
`263 F.3d 942 (9th Cir. 2001) ...............................................................................................8
`
`F.T.C. v. Facebook, Inc.,
`2021 WL 2643627 (D.D.C. June 28, 2021) ............................................................... passim
`
`Case No. 5:20-cv-08570-LHK
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 5 of 30
`
`
`
`F.T.C. v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) .............................................................................................17
`
`Free FreeHand Corp. v. Adobe Systems Inc.,
`852 F. Supp. 2d 1171 (N.D. Cal. 2012) ...............................................................................4
`
`Garrison v. Oracle Corp.,
`159 F. Supp. 3d 1044 (N.D. Cal. 2016) .................................................................4, 5, 7, 13
`
`Genus Lifesciences Inc. v. Lannett Co.,
`378 F. Supp. 3d 823 (N.D. Cal. 2019) ...............................................................................14
`
`Hicks v. PGA Tour, Inc.,
`897 F.3d 1109 (9th Cir. 2018) .................................................................................9, 10, 12
`
`hiQ Labs, Inc. v. LinkedIn Corp.,
`485 F. Supp. 3d 1137 (2020) .............................................................................................17
`
`Holmes v. Securities Investor Protection Corp.,
`503 U.S. 258 (1992) ...........................................................................................................18
`
`In re Aggrenox Antitrust Litigation,
`94 F. Supp. 3d 224 (D. Conn. 2015) ..................................................................................11
`
`In re Glumetza Antitrust Litigation,
`2020 WL 1066934 (N.D. Cal. Mar. 5, 2020) .......................................................................6
`
`In re Google Digital Advertising Antitrust Litigation,
`2021 WL 2021990 (N.D. Cal. May 13, 2021) ...............................................................9, 10
`
`In re K-Dur Antitrust Ligitation,
`338 F. Supp. 2d 517 (D.N.J. 2004) ......................................................................................6
`
`In re Lithium Ion Batteries Antitrust Litigation,
`2014 WL 4955377 (N.D. Cal. Jan. 21, 2014) ......................................................................6
`
`In re Packaged Seafood Products Antitrust Litigation,
`2017 WL 35571 (S.D. Cal. Jan. 3, 2017) .............................................................................6
`
`In re Webkinz Antitrust Litigation,
`695 F. Supp. 2d 987 (N.D. Cal. 2010) ...............................................................................10
`
`In re WellPoint, Inc. Out-of-Network UCR Rates Litigation,
`903 F. Supp. 2d 880 (C.D. Cal. 2012) ...............................................................................19
`
`Intel Corp. v. Fortress Investment Group LLC,
`2021 WL 51727 (N.D. Cal. Jan. 6, 2021) ....................................................................19, 20
`
`International Telephone & Telegraph Corp. v. General Telephone & Electronics Corp.,
`518 F.2d 913 (9th Cir. 1975) .............................................................................................11
`
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 6 of 30
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`
`
`Jackson v. Eddy’s LI RV Center, Inc.,
`845 F. Supp. 2d 523 (E.D.N.Y. 2012) .................................................................................7
`
`Kaiser Foundation v. Abbott Laboratories,
`2009 WL 3877513 (C.D. Cal. Oct. 8, 2009) ........................................................................5
`
`Kaplan v. Burroughs Corp.,
`611 F.2d 286 (9th Cir. 1979) .............................................................................................10
`
`Kinderstart.com LLC v. Google, Inc.,
`2007 WL 831806 (N.D. Cal. Mar. 16, 2007) .....................................................................10
`
`Klehr v. A.O. Smith Corp.,
`521 U.S. 179 (1997) .............................................................................................................4
`
`Korea Kumho Petrochemical v. Flexsys America LP,
`2008 WL 686834 (N.D. Cal. Mar. 11, 2008) .....................................................................12
`
`Mayor of Baltimore v. Actelion Pharmaceuticals Ltd.,
`995 F.3d 123 (4th Cir. 2021) ...............................................................................................6
`
`MetroNet Services Corp. v. Qwest Corp.,
`383 F.3d 1124 (9th Cir. 2004) ...........................................................................................17
`
`National Association of Pharmaceutical Manufacturers, Inc. v. Ayerst Laboratories,
`850 F.2d 904 (2d Cir. 1988)...............................................................................................14
`
`New York v. Facebook, Inc.,
`2021 WL 2643724 (D.D.C. June 28, 2021) ............................................................... passim
`
`Nobody in Particular Presents, Inc. v. Clear Channel Communications, Inc.,
`311 F. Supp. 2d 1048 (D. Colo. 2004) ...............................................................................10
`
`Norcen Energy Resource Ltd. v. Pacific Gas & Electric Co.,
`1994 WL 519461 (N.D. Cal. Sept. 19, 1994) ....................................................................15
`
`Novell, Inc. v. Microsoft Corp.,
`731 F.3d 1064 (10th Cir. 2013) .........................................................................................17
`
`NSS Labs, Inc. v. Symantec Corporation,
`2019 WL 3804679 (N.D. Cal. Aug. 13, 2019) ..................................................................10
`
`Oliver v. SD-3C LLC,
`751 F.3d 1081 (9th Cir. 2014) .........................................................................................3, 4
`
`PBTM LLC v. Football Northwest, LLC,
`2021 WL 37648 (W.D. Wash. Jan. 5, 2021) ........................................................................9
`
`Rambus Inc. v. F.T.C.,
`522 F.3d 456 (D.C. Cir. 2008) ...........................................................................................15
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 7 of 30
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`
`
`Reiter v. Sonotone Corp.,
`442 U.S. 330 (1979) ...........................................................................................................18
`
`Reveal Chat Holdco, LLC v. Facebook, Inc.,
`471 F. Supp. 3d 981 (N.D. Cal. 2020) ...................................................................4, 5, 8, 17
`
`Reveal Chat Holdco LLC v. Facebook, Inc.,
`2021 WL 1615349 (N.D. Cal. Apr. 26, 2021) ...........................................................7, 8, 14
`
`Rutherford Holdings, LLC v. Plaza Del Ray,
`166 Cal. Rptr. 3d 864 (Ct. App. 2014) ..............................................................................20
`
`Ryan v. Microsoft Corp.,
`147 F. Supp. 3d 868 (N.D. Cal. 2015) .................................................................................6
`
`Stationary Engineers Local 39 Health & Welfare Trust Fund v. Philip Morris, Inc.,
`1998 WL 476265 (N.D. Cal. Apr. 30, 1998) .....................................................................18
`
`Tate v. Pacific Gas & Electric Co.,
`230 F. Supp. 2d 1072 (N.D. Cal. 2002) .............................................................................14
`
`Thurman Industries, Inc. v. Pay ‘N Pak Stores, Inc.,
`875 F.2d 1369 (9th Cir. 1989) ...........................................................................................11
`
`United States v. El Paso Natural Gas Co.,
`376 U.S. 651 (1964) ...........................................................................................................16
`
`United States v. Microsoft Corp.,
`253 F.3d 34 (D.C. Cir. 2001) .............................................................................................14
`
`United States v. Village Voice Media, LLC,
`2003 WL 21659092 (N.D. Ohio Feb. 12, 2003) ................................................................11
`
`Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) ...........................................................................................................16
`
`Viamedia, Inc. v. Comcast Corp.,
`951 F.3d 429 (7th Cir. 2020) .............................................................................................17
`
`Washington v. Franciscan Health System,
`388 F. Supp. 3d 1296 (W.D. Wash. 2019) .........................................................................16
`
`Z Technologies Corp. v. Lubrizol Corp.,
`753 F.3d 594 (6th Cir. 2014) ...............................................................................................5
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`STATUTES, RULES, AND REGULATIONS
`
`Fed. R. Civ. P. 9(b) ........................................................................................................................13
`
`Clayton Antitrust Act, 15 U.S.C. §§ 12-27 (1914) ................................................................1, 4, 18
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`Sherman Antitrust Act, 15 U.S.C. §§ 1-7 (1890).........................................................................4, 6
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`OTHER AUTHORITIES
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`3 Phillip E. Areeda & Herbert Hovenkamp,
`Antitrust Law ¶ 336 (4th ed. 2015) ....................................................................................18
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`INTRODUCTION1
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`The core conduct Plaintiffs challenge and core theories they advance have been raised in
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`four other antitrust complaints—and dismissed four times. No private or government plaintiff has
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`been able to state a viable claim based on this conduct and these Plaintiffs do not either. The
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`complaints here suffer from the same fundamental and incurable defects that caused Judge
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`Freeman, and just last week, Judge Boasberg, to dismiss many of the same claims without leave
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`to amend. As in those cases, the allegations in both complaints are untimely. As in those cases,
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`the allegations of monopoly power in relevant markets are contrived and unsupportable. And as
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`in those cases, the theories of liability are unprecedented and are not viable. None of that changes
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`with respect to Users’ “deception” claim where the alleged conduct occurred fifteen years ago and
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`is on its face not an antitrust claim at all.
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`Statute of Limitations. Judges Freeman and Boasberg both reached the unremarkable
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`conclusion that complaints challenging high-profile public acts that occurred outside the Clayton
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`Act’s four-year limitations period should be dismissed on timeliness grounds—without leave to
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`amend. So too here. First, neither set of Plaintiffs can invoke the “continuing violation” doctrine.
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`Users’ argument rests solely on acts that they concede were not violations (hence, no continuing
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`violation), and neither Users nor Advertisers argue that any post-December 2016 acts injured them
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`in a new way, as the law requires. Second, Judge Freeman has twice correctly rejected nearly
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`identical attempts to argue that fraudulent concealment tolls the statute of limitations where, as
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`here, Plaintiffs challenge public acts that were widely known at or near their occurrence long ago.
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`Monopoly Power. First, as was true for the FTC, Users seek to rest their theory of
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`monopoly power on naked allegations of market share, without any supporting detail or factual
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`allegations. Judge Boasberg correctly granted Facebook’s motion to dismiss the FTC case on this
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`basis, and Users’ allegations should receive the same treatment. Second, and independently, all
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`Plaintiffs fail to point to any facts they have alleged to support their obviously gerrymandered
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`relevant markets. In an apparent effort to manufacture monopoly power, Plaintiffs seek to define
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`1 Unless otherwise stated, emphases were added to quotations and internal punctuation, alterations,
`and citations were omitted from them.
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 10 of 30
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`markets that conveniently carve-out competitors, resulting in the “unusual, nonintuitive product
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`market[s]” that undermined the FTC’s effort to allege that Facebook is a monopoly. Third,
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`Advertisers fail to distinguish controlling Ninth Circuit authority in Hicks, which renders their
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`“social” advertising submarket deficient as a matter of law— warranting dismissal of the AC.
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`Exclusionary Conduct. First, Users argue that Facebook deceived its way to a monopoly
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`because it told consumers it was committed to privacy. But Users’ own allegations—that
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`Facebook was successful because, unlike Myspace and Friendster, users were not anonymous—
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`and common sense illustrate why the theory does not cross the plausibility threshold, let alone
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`overcome the presumption that allegedly false statements do not violate the antitrust laws.
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`Remarkably, Users also argue that they are not challenging the Instagram and WhatsApp
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`acquisitions because of any anticompetitive effects, but merely because the acquisitions were
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`allegedly undertaken based on internal Facebook data. But the legality of an acquisition is
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`determined by its effect on competition, not on the information the acquiring party reviewed
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`beforehand. Second, Users’ and Advertisers’ challenge to Facebook’s platform policy changes
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`depend on a “refusal to deal” theory that plainly fails to satisfy this Circuit’s Qualcomm decision
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`and has twice been rejected on motions to dismiss by Judges Freeman and Boasberg. Plaintiffs’
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`attempts to distinguish their case while relying on the same allegations—verbatim—fails.
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`Antitrust Injury. Plaintiffs fail to allege antitrust injury caused by any of the conduct they
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`challenge. First, Users insist that they “pay” Facebook with attention but allege no facts to support
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`their claim that Facebook would have paid Users with money but for the alleged conduct. They
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`therefore cannot establish the “economic loss” controlling precedent requires. Second,
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`Advertisers’ invocation of the word “supracompetitive” has no talismanic effect: Advertisers’
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`own allegations illustrate that Facebook’s prices were less than Google’s, and they cannot—as
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`they must—point to any plausible allegation they paid supracompetitive prices. Likewise,
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`Advertisers’ challenge to the GNBA must fail because there are no factual allegations about why
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`the agreement caused them to pay higher prices in a purportedly unrelated market.
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`The deficiencies in Plaintiffs’ complaints cannot be alleviated by further amendment. Both
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`Case No. 5:20-cv-08570-LHK
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`FACEBOOK’S REPLY ISO MOTION TO DISMISS
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 11 of 30
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`complaints fail to state a claim and should be dismissed with prejudice.2
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`I.
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`PLAINTIFFS’ SECTION 2 CLAIMS ARE TIME-BARRED
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`ARGUMENT
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`All Plaintiffs seek extraordinary relief for conduct that occurred outside the limitations
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`period. This Court should not deviate from the three opinions that have already found similar
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`claims untimely, including the recently-dismissed State AG lawsuit. New York v. Facebook, Inc.,
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`__ F. Supp. 3d __, 2021 WL 2643724, at *28 (D.D.C. June 28, 2021) (“AGs”). Any differences
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`among the cases (Supp. 5) work against Plaintiffs as their distinct allegations relate to conduct that
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`occurred even longer ago. Just like the other cases, “this antitrust action is premised on public,
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`high-profile conduct nearly all of which occurred over six years ago” and the allegations
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`“themselves make clear that [Plaintiffs] could have easily brought suit then, just as they make clear
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`that any equitable relief this Court could or would order now would greatly prejudice Facebook
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`and third parties.” AGs, 2021 WL 263724, at *28. Here, the only question before the Court is
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`whether Plaintiffs have adequately alleged facts to justify tolling the statute of limitations. They
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`have not.
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`A.
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`The Continuing Violation Doctrine Does Not Save Plaintiffs’ Claims
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`As a threshold matter, it is “important to note” what Plaintiffs “do not argue” while
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`asserting continuing violations. AGs, 2021 WL 2643724, at *22. Plaintiffs do not argue that it
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`was “uncertain or speculative whether Facebook’s antitrust violations would injure them at the
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`time of the violation.” Id. Plaintiffs also do not argue that the conduct at issue “did not violate . . .
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`Section 2” until sometime later; on the contrary, Plaintiffs’ theory is that Facebook’s alleged
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`conduct was “unlawful from the outset.” Id. Finally, Plaintiffs do not “maintain that they had
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`good reason for not suing earlier, such that their lengthy delay . . . was nonetheless reasonable.”
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`Id. These failures preclude Plaintiffs from opening untimely conduct “to renewed challenge,” id.,
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`under both the doctrine of laches and under standard statute of limitations analysis, Supp. 5, which
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`in the antitrust context, is essentially the same. See, e.g., Oliver v. SD-3C LLC, 751 F.3d 1081,
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`2 In laying out the purported legal standard, Plaintiffs cite a 1983 case for the proposition that
`“dismissals for failure to state a claim are disfavored in antitrust actions.” Opp. 7. Today, Bell
`Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), is controlling.
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`FACEBOOK’S REPLY ISO MOTION TO DISMISS
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 12 of 30
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`1086 (9th Cir. 2014) (in “applying laches” in antitrust cases, courts “look to the same legal rules
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`that animate the four-year statute of limitations”).
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`Moreover, the continuing violation doctrine does not apply to merger challenges, whether
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`brought under Section 2 of the Sherman Act or Section 7 of the Clayton Act. See AGs, 2021 WL
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`2643724, at *25 (stating “the same [] analysis applies”); Reveal Chat Holdco, LLC v. Facebook,
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`Inc., 471 F. Supp. 3d 981, 995 (N.D. Cal. 2020) (“Reveal Chat I”). Thus, Plaintiffs cannot invoke
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`the doctrine with respect to their challenges to the acquisitions of Instagram or WhatsApp. They
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`cannot do so for the balance of their claims either.
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`1.
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`Users Cannot Invoke The Continuing Violation Doctrine
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`Each supposedly “continuing” violation cited by Users is conceded not to be an antitrust
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`violation. Users argue that this is not required. Opp. 8. However, this Court’s opinion in Free
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`FreeHand Corp. v. Adobe Systems Inc., which Users cite (Opp. 8) to support their argument,
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`provides that the relevant continuing acts must be “part of the antitrust violation.” 852 F. Supp.
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`2d 1171, 1187 (N.D. Cal. 2012) (quoting Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997));
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`see also Garrison v. Oracle Corp., 159 F. Supp. 3d 1044, 1070 (N.D. Cal. 2016) (same). Users
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`have not pleaded any continuing violation—relying instead on mere continuing conduct not even
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`alleged to be unlawful. For that reason, Users are mistaken that Facebook’s acquisition of tbh,
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`which Users do not even contend to have ever been anticompetitive, can restart the statute of
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`limitations for an otherwise stale claim, or otherwise distinguishes their case from the State AG
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`opinion. Opp. 9; Supp. 5. There is no reason “why one small acquisition . . . (which merited one
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`[paragraph] in [Users’] Complaint) should . . . reopen the window to challenge a series of allegedly
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`much more consequential acquisitions that all took place from 2012 to 2014.” AGs, 2021 WL
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`2643724, at *26. Likewise, Users’ “characteriz[ation]” of their claim “as a challenge to
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`Facebook’s larger scheme of serial anticompetitive acquisitions,” id., is of no moment: merger
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`challenges must be “timely made, for the benefit of both the public and the merged firms.” Id.
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`The other post-2016 conduct Users cite is also irrelevant. Users do not allege Facebook’s
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`supposedly deceptive access to data through Onavo is itself anticompetitive. Opp. 8. And while
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`Users argue that Facebook’s alleged deceptive statements about its privacy practices were
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`FACEBOOK’S REPLY ISO MOTION TO DISMISS
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 13 of 30
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`anticompetitive, id., the identified post-2016 conduct is, as alleged, a “reaffirmation of a previous”
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`strategy, not a “new and independent act” capable of restarting the statute of limitations. Bay Area
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`Surgical Mgmt., LLC v. Aetna Life Ins. Co., 166 F. Supp. 3d 988, 999 (N.D. Cal. 2015).
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`Regardless, even if the post-December 2016 acts could be sufficient, Users cannot allege—
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`as they must—that the acts inflicted “new and accumulating injury” on them. See Reveal Chat I,
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`471 F. Supp. 3d at 994. Users assert that Facebook is “simply wrong” about the lack of allegations
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`on this prong of the continuing violation test, see Opp. 9, but the only allegation they identify, see
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`id. (citing UC ¶ 238), is a paragraph about alleged fraudulent concealment via public
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`misrepresentations that has nothing to do with how the Users were supposedly newly injured.
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`Thus, there is no basis to distinguish, Supp. 5, Users’ allegations from the State AGs’ allegations.
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`2.
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`Advertisers Cannot Invoke The Continuing Violation Doctrine
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`Beyond what Users have argued, the only post-December 2016 conduct Advertisers
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`highlight, Opp. 10—that Facebook “cloned” Snapchat features and used Onavo to “spy” on
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`users—fails for the same reason those near-identical allegations failed to resuscitate untimely
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`complaints in Reveal Chat.3 Compare, e.g., AC ¶¶ 298-99, with Amended Class Action
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`Complaint, Reveal Chat Holdco LLC v. Facebook, Inc. (“Reveal Chat II Compl.”), No. 5:20-cv-
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`00363-BLF (N.D. Cal. Aug. 7, 2020), Dkt. 62, at ¶¶ 311-12 (identical allegations) and AC ¶¶ 247-
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`67, with Reveal Chat II Compl. ¶¶ 266-86 (nearly identical allegations).
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`Advertisers’ only argument, Opp. 10, not already rejected on multiple occasions is that
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`some named plaintiffs bought ads after December 2016 and that these purchases are a continuing
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`violation—a suggestion with no support in the case law.4 In a Section 2 case, “profits, sales, and
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`other benefits accrued as the result of an initial wrongful act . . . are uniformly viewed as ‘ripples’
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`caused by the initial injury, not as distinct injuries themselves.” Z Techs. Corp. v. Lubrizol Corp.,
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`753 F.3d 594, 600 (6th Cir. 2014); see also Kaiser Found. v. Abbott Labs., 2009 WL 3877513, at
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`3 Advertisers also challenge Facebook and Google’s alleged September 2018 agreement. See Opp.
`10. But these allegations go primarily to Advertisers’ Section 1 claim (see Mot. 32-35; AC ¶¶ 564-
`69) and are unrelated to the rest of the Section 2 conduct.
`4 Advertisers contend that their claims “based on ad purchases after December 2016” are timely
`because they could not have filed a lawsuit “before Advertisers actually made those post-2016
`purchases.” Opp. 10 n.3. This is the same argument this Court rejected in Garrison. 159 F. Supp.
`3d at 1064.
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`Case No. 5:20-cv-08570-LHK
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`Case 5:20-cv-08570-LHK Document 117 Filed 07/07/21 Page 14 of 30
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`*7 (C.D. Cal. Oct. 8, 2009) (“[T]he statute of limitation [for unilateral conduct] runs from the time
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`of commission of the act, notwithstanding that high prices may last indefinitely into the future.”);
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`AGs, 2021 WL 2643724, at *24 (“Post-acquisition increases in prices . . .