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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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`MAXIMILIAN KLEIN, et al.
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`Plaintiffs,
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`v.
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`FACEBOOK, INC.,
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`Defendant.
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`Case No. 20-CV-08570-LHK
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`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`DISMISS WITH LEAVE TO AMEND
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`Re: Dkt. No. 97
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`Plaintiffs Maximilian Klein; Sarah Grabert; and Rachel Banks Kupcho (collectively,
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`“Consumers”) and Affilious, Inc.; Jessyca Frederick; Mark Young; Joshua Jeon; 406 Property
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`Services, PLLC; Mark Berney; Jessica Layser; Katherine Looper; and Zahara Mossman
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`(collectively, “Advertisers”) individually and on behalf of all others similarly situated, sue
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`Defendant Facebook, Inc. (“Facebook”).
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`Before the Court is Facebook’s motion to dismiss the Consolidated Consumer Class
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`Action Complaint and the Consolidated Advertiser Class Action Complaint. ECF No. 97. Having
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`considered the parties’ submissions, the parties’ arguments at the hearing, the relevant law, and the
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`record in this case, the Court GRANTS IN PART and DENIES IN PART Facebook’s motion to
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`dismiss with leave to amend.
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`Case No. 20-CV-08570-LHK
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`Case 5:21-cv-02108-LHK Document 28 Filed 01/14/22 Page 2 of 110
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`I.
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`Procedural History ..................................................................................................................... 1
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`TABLE OF CONTENTS
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`II. Legal Standard ........................................................................................................................... 3
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`A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6) ................................. 3
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`B.
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`Leave to Amend .................................................................................................................. 4
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`III. Discussion ................................................................................................................................. 5
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`A.
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`Consumers and Advertisers Adequately Allege that Facebook Has Monopoly Power in
`Cognizable Product Markets............................................................................................... 7
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`B.
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`C.
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` Consumers Adequately Allege that Facebook Has Monopoly Power in the Social
`Network and Social Media Markets ................................................................................ 9
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` Advertisers Adequately Allege that Facebook Has Monopoly Power in the Social
`Advertising Market ....................................................................................................... 33
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`The Court Denies Facebook’s Motion to Dismiss Consumers’ Data Privacy Claims ..... 38
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` Consumers Allege that Facebook Obtained and Maintained Monopoly Power by
`Repeatedly Deceiving Users About Facebook’s Data Privacy Practices ...................... 40
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` Consumers Allege with Sufficient Particularity that Facebook Made Numerous
`“Clearly False” Representations About Its Collection and Monetization of Data ........ 53
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`Consumers’ Data Privacy Claims Are Timely .............................................................. 55
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` Consumers Adequately Allege that Facebook’s False Representations About Its Data
`Privacy Practices Were Not Readily Susceptible of Neutralization ............................. 58
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` Consumers Adequately Allege that Facebook’s False Representations Were “Clearly
`Material” ....................................................................................................................... 61
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`Consumers Adequately Allege Causal Antitrust Injury ................................................ 65
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` Consumers’ Request for Injunctive Relief as a Remedy for Consumers’ Data Privacy
`Claims Is Not Barred by the Doctrine of Laches .......................................................... 69
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`The Court Grants Facebook’s Motion to Dismiss Consumers’ and Advertisers’ “Copy,
`Acquire, Kill” Claims With Leave to Amend .................................................................. 70
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` Consumers and Advertisers Allege that Facebook’s “Copy, Acquire, Kill” Strategy
`Allowed Facebook to Maintain Monopoly Power ........................................................ 72
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`Consumers’ and Advertisers’ “Copy, Acquire, Kill” Claims Are Untimely ................ 88
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`D.
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`The Court Denies Facebook’s Motion to Dismiss Advertisers’ GNBA Claims ............ 100
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`Case 5:21-cv-02108-LHK Document 28 Filed 01/14/22 Page 3 of 110
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`The Google Network and Bidding Agreement ........................................................... 100
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`Advertisers Adequately Allege that the GNBA Caused Them Injury ........................ 102
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`E.
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`The Court Grants Facebook’s Motion to Dismiss Consumers’ Unjust Enrichment Claim
`With Leave to Amend ..................................................................................................... 106
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`IV. Conclusion ............................................................................................................................. 107
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`Case 5:21-cv-02108-LHK Document 28 Filed 01/14/22 Page 4 of 110
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`I. PROCEDURAL HISTORY
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`On December 3, 2020, Plaintiffs Klein and Grabert filed an initial complaint against
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`Defendant Facebook. ECF No. 1. Subsequently, 11 other antitrust cases were filed by consumers
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`and advertisers against Facebook. On February 9, 2021, the Court: (1) granted motions to relate
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`Sherman v. Facebook, Kupcho v. Facebook, Dames v. Facebook, Steinberg v. Facebook, Layser v.
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`Facebook, and Rosenman v. Facebook to the instant case; (2) concluded that Affilious v. Facebook
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`was related to the instant case; and (3) consolidated these cases with the instant case. ECF No. 47.
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`On February 11, 2021, Plaintiff Rosenman voluntarily dismissed her case. Facebook v.
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`Rosenman, No. 21-CV-00336-LHK, ECF No. 17.
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`On February 25, 2021, the Court granted motions to relate Kovacevich v. Facebook and
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`Garvin v. Facebook to the instant case and consolidated these cases with the instant case. ECF
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`No. 50. On March 16, 2021, the Court granted a motion to relate Wasvary v. Facebook to the
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`instant case and consolidated it with the instant case. ECF No. 68. On April 9, 2021, the Court
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`granted a motion to relate Ryan v. Facebook to the instant case and consolidated that case with the
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`instant case. ECF No. 85.
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`After voluntarily dismissing her federal case on February 11, 2021, Plaintiff Rosenman
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`refiled her case in state court, and Facebook removed the refiled case to federal court. See
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`Rosenman v. Facebook, No. 21-CV-2108, ECF No. 1. On April 9, 2021, the Court related the
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`refiled Rosenman Case to the instant case. ECF No. 85. On April 26, 2021, Rosenman filed a
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`motion to remand, which the Court denied on August 27, 2021. Rosenman v. Facebook, No. 21-
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`CV-02108-LHK, ECF Nos. 17, 26.
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`On March 18, 2021, the Court held a hearing on motions for appointment as interim class
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`counsel. ECF No. 77. That same day, the Court appointed Stephen A. Swedlow of Quinn
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`Emanuel Urquhart & Sullivan, LLP and Shana A. Scarlett of Hagens Berman Sobol Shapiro LLP
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`as Interim Class Counsel for the Consumer class (“Consumers”) and appointed Warren Postman
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`of Keller Lenkner and Brian D. Clark of Lockridge Grindal Nauen P.L.L.P. to serve on Plaintiffs’
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`Executive Committee for Consumers. ECF No. 73.
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`On March 18, 2021, the Court appointed Yavar Bataee of Bathaee Dunne LLP and Kristen
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`M. Anderson of Scott + Scott LLP as Interim Class Counsel for the Advertiser class
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`(“Advertisers”) and appointed Tina Wolfson of Ahdoot & Wolfson, PC and Keith J. Verrier of
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`Levin Sedran & Berman LLP to serve on Plaintiffs’ Executive Committee for Advertisers. Id.
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`On April 22, 2021, Consumers filed a Consolidated Consumer Class Action Complaint.
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`ECF No. 87 (“CC”). Consumers are individuals who use Facebook’s services, including
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`Facebook, Facebook Messenger, Instagram, and WhatsApp. Id. ¶¶ 19, 23, 26. Consumers allege
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`that, “[a]bsent Facebook’s anticompetitive scheme, fair competition would have required
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`Facebook to provide consumers greater value in return for consumers’ data on a market-wide
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`basis.” Id. ¶ 10. Consumers seek to represent a class of “[a]ll persons in the United States who
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`maintained a Facebook profile at any point from 2007 up to the date of the filing of this action.”
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`Id. ¶ 248. Consumers assert five claims: (1) monopolization of the Social Network Market in
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`violation of § 2 of the Sherman Act; (2) attempted monopolization of the Social Network Market
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`in violation of § 2 of the Sherman Act; (3) monopolization of the Social Media Market in violation
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`of § 2 of the Sherman Act; (4) attempted monopolization of the Social Media Market in violation
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`of § 2 of the Sherman Act; and (5) unjust enrichment under California common law. Id. ¶¶ 260–
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`317.
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`On April 22, 2021, Advertisers filed a Consolidated Advertiser Class Action Complaint.
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`ECF No. 86 (“AC”). Advertisers are individuals, entities, and corporations who purchased
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`advertising from Facebook. Id. ¶¶ 24–33. Advertisers allege that they paid prices for advertising
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`that were “higher than they would have been absent Facebook’s anticompetitive conduct and
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`unlawfully acquired and/or maintained monopoly.” Id. ¶ 33. Affilious, Inc.; Jessyca Frederick;
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`Joshua Jeon; and 406 Property Services, PLLC seek to represent a class of “[a]ll persons, entities,
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`and/or corporations in the United States who purchased advertising from Facebook between
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`October 1, 2012, and April 3, 2018, but not after April 3, 2018.” AC ¶ 529. Mark Berney, Mark
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`Young, Jessica Layser, Katherine Looper, and Zahara Mossman seek to represent a class of “[a]ll
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`persons, entities, and/or corporations in the United States who purchased advertising from
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`Facebook between April 4, 2018, and the present.” Id. ¶ 532. Advertisers assert three claims: (1)
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`monopolization of the Social Advertising Market in violation of § 2 of the Sherman Act; (2)
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`attempted monopolization of the Social Advertising Market in violation of § 2 of the Sherman
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`Act; and (3) restraint of trade in violation of § 1 of the Sherman Act. Id. ¶¶ 547–69.
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`On May 7, 2021, Facebook filed a motion to disqualify Keller Lenkner. ECF No. 93. On
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`July 13, 2021, the Court granted Facebook’s motion to disqualify Keller Lenkner in advance of the
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`July 15, 2021 hearing on Facebook’s motion to dismiss in light of the importance of the issues
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`raised by the motion to disqualify. ECF No. 123. The Court noted that the Court was focusing on
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`preparation for the motion to dismiss hearing and would issue a written decision on the motion to
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`disqualify shortly. Id. On July 20, 2021, the Court issued a written decision on the motion to
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`disqualify. ECF No. 127.
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`On May 20, 2021, Facebook filed the instant motion to dismiss. ECF No. 97 (“Mot.”). On
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`June 17, 2021, Plaintiffs filed an opposition. ECF No. 109 (“Opp.”). On June 28, 2021, the
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`United States District Court for the District of Columbia issued decisions on Facebook’s motions
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`to dismiss in FTC v. Facebook, Inc., No. 20-CV-3590-JEB, and State of New York v. Facebook,
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`Inc., No. 20-CV-3589-JEB. On July 1, 2021, the Court permitted Plaintiffs to file a supplemental
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`brief regarding those decisions. ECF No. 115. On July 5, 2021, Plaintiffs filed a supplemental
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`brief. ECF No. 116 (“Pls. Supp. Br.”). On July 7, 2021, Facebook filed a reply. ECF No. 117
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`(“Reply”). The Court held a hearing on the instant motion on July 15, 2021.
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`Plaintiff Layser voluntarily dismissed her case on August 5, 2021. ECF No. 129. Plaintiff
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`Mossman voluntarily dismissed her case on November 4, 2021. ECF No. 182. Thus, a total of 11
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`cases remain.
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`II. LEGAL STANDARD
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`A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)
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`Rule 8(a) of the Federal Rules of Civil Procedure requires a complaint to include “a short
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`and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
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`8(a)(2). A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of
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`Civil Procedure 12(b)(6). Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to
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`relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A
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`claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw
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`the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
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`556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but
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`it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal
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`quotations omitted).
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`For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations
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`in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving
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`party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
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`Additionally, the Court may consider materials referenced in the complaint under the
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`incorporation by reference doctrine, even if a plaintiff failed to attach those materials to the
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`complaint. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
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`The Court, however, need not accept as true allegations contradicted by judicially
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`noticeable facts, see Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look
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`beyond the plaintiff’s complaint to matters of public record” without converting the Rule 12(b)(6)
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`motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir.
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`1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in
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`the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per
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`curiam) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere
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`“conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to
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`dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).
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`B. Leave to Amend
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`If the Court determines that a complaint should be dismissed, it must then decide whether
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`to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to
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`amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose
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`of Rule 15 to facilitate decision[s] on the merits, rather than on the pleadings or technicalities,”
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`Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alteration and internal quotations
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`omitted). When dismissing a complaint for failure to state a claim, “a district court should grant
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`leave to amend even if no request to amend the pleading was made, unless it determines that the
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`pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal
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`quotations omitted). Accordingly, leave to amend generally shall be denied only if allowing
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`amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the
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`moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532
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`(9th Cir. 2008).
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`III. DISCUSSION
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`Section 2 of the Sherman Act makes it unlawful for any person to “monopolize, or attempt
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`to monopolize, or combine or conspire with any other person or persons, to monopolize any part
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`of the trade or commerce among the several States, or with foreign nations.” 15 U.S.C. § 2. To
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`state a claim for monopolization under Section 2 of the Sherman Act, a plaintiff must allege: “(1)
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`[p]ossession of monopoly power in the relevant market”; (2) “willful acquisition or maintenance
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`of that power” through exclusionary conduct; and (3) “causal antitrust injury.” SmileCare Dental
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`Grp. v. Delta Dental Plan of Cal., Inc., 88 F.3d 780, 783 (9th Cir. 1996) (internal quotation
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`omitted).
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`In turn, Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form
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`of trust or otherwise, or conspiracy, in restraint of trade or commerce.” 15 U.S.C. § 1. “To
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`establish liability under § 1, a plaintiff must prove (1) the existence of an agreement, and (2) that
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`the agreement was in unreasonable restraint of trade.” Aerotec Int’l, Inc. v. Honeywell Int’l, Inc.,
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`836 F.3d 1171, 1178 (9th Cir. 2016).
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`Consumers allege that Facebook violated Section 2 of the Sherman Act through a “two-
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`pronged anticompetitive strategy.” See CC ¶ 219. First, Consumers allege that Facebook acquired
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`and maintained monopoly power in the Social Network and Social Media Markets by making
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`false representations to users about Facebook’s data privacy practices. For ease of reference, the
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`Court refers to Consumers’ claims based on this theory of liability as Consumers’ “data privacy
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`claims.” Second, Consumers allege that Facebook’s “Copy, Acquire, Kill” strategy allowed
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`Facebook to maintain monopoly power in the Social Network and Social Media Markets. The
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`Court refers to Consumers’ claims based on this theory of liability as Consumers’ “‘Copy,
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`Acquire, Kill’ claims.”
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`Consumers also allege that Facebook’s conduct constitutes unjust enrichment under
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`California common law. The Court refers to this as Consumers’ “Unjust Enrichment claim.”
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`Like Consumers, Advertisers challenge Facebook’s “Copy, Acquire, Kill” strategy under
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`Section 2 of the Sherman Act. Specifically, Advertisers allege that the “Copy, Acquire, Kill”
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`strategy allowed Facebook to maintain monopoly power in the Social Advertising Market. The
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`Court refers to Advertisers’ claims based on this theory of liability as Advertisers’ “‘Copy,
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`Acquire, Kill’ claims.”
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`Additionally, Advertisers allege that Facebook maintained monopoly power in the Social
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`Advertising Market by entering a contract with Google called the Google Network Bidding
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`Agreement (“GNBA”). Advertisers also allege that the GNBA was an unreasonable restraint of
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`trade. Thus, Advertisers challenge the GNBA under Section 1 of the Sherman Act and Section 2
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`of the Sherman Act. The Court refers to these claims as Advertisers’ “GNBA claims.”
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`Facebook moves to dismiss all of these claims. Specifically, Facebook argues that: (1)
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`neither Consumers nor Advertisers have alleged cognizable product markets; (2) Consumers have
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`not plausibly alleged monopoly power; (3) Consumers’ data privacy claims are untimely; (4)
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`Consumers’ and Advertisers’ “Copy, Acquire, Kill” claims are untimely; (5) Consumers have not
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`plausibly alleged that Facebook’s deceptive data privacy practices were anticompetitive; (6)
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`neither Consumers nor Advertisers have plausibly alleged that Facebook’s “Copy, Acquire, Kill”
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`strategy was anticompetitive; (7) neither Consumers nor Advertisers have adequately alleged
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`causal antitrust injury; and (8) Consumers have not adequately stated a claim for unjust
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`enrichment. Facebook also argues that Consumers’ requests for injunctive relief are barred by the
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`doctrine of laches.
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`The Court rules as follows: (1) Consumers and Advertisers have adequately alleged that
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`Case No. 20-CV-08570-LHK
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`Facebook has monopoly power in cognizable product markets; (2) because Consumers have
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`adequately alleged that their data privacy claims are timely, that Facebook’s false representations
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`about its data privacy constitute exclusionary conduct, and that Consumers have suffered a causal
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`antitrust injury, the Court DENIES Facebook’s motion to dismiss Consumers’ data privacy claims;
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`(3) because Consumers’ and Advertisers’ “Copy, Acquire, Kill” claims are untimely, the Court
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`GRANTS Facebook’s motion to dismiss Consumers’ and Advertisers’ “Copy, Acquire, Kill”
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`claims with leave to amend; (4) because Advertisers have adequately alleged that they were
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`injured by the GNBA, the Court DENIES Facebook’s motion to dismiss Advertisers’ GNBA
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`claims; and (5) because Consumers have failed to state a claim for unjust enrichment, the Court
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`GRANTS Facebook’s motion to dismiss Consumers’ Unjust Enrichment claim with leave to
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`amend. Below, the Court discusses each of these conclusions in turn.
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`A. Consumers and Advertisers Adequately Allege that Facebook Has Monopoly Power
`in Cognizable Product Markets
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`The first element of a claim for monopolization under the Sherman Act is the “[p]ossession
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`of monopoly power in [a] relevant market.” SmileCare, 88 F.3d at 783. Accordingly, Consumers
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`and Advertisers must establish “both that a ‘relevant market’ exists and that [Facebook] has power
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`within that market.” Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038, 1044 (9th Cir. 2008).
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`To “plead a relevant market” for purposes of a Sherman Act claim, a plaintiff must allege
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`“both a geographic market and a product market.” Hicks v. PGA Tour, Inc., 897 F.3d 1109, 1120
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`(9th Cir. 2018). All parties agree that the relevant geographic market is the United States.
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`A product market “must encompass the product at issue as well as all economic substitutes
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`for the product.” Newcal Indus., 513 F.3d at 1045. “Economic substitutes have a ‘reasonable
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`interchangeability of use’ or sufficient ‘cross-elasticity of demand’ with the relevant product.”
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`Hicks, 897 F.3d at 1120 (internal citation omitted). Whether products are reasonably
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`interchangeable depends on the products’ “price, use[,] and qualities.” United States v. E. I. du
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`Pont de Nemours & Co., 351 U.S. 377, 404 (1956); see also United States v. Microsoft Corp., 253
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`F.3d 34, 51–52 (D.C. Cir. 2001) (explaining that products are in the same market if they are
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`“reasonably interchangeable by consumers for the same purposes”). In turn, there is a cross-
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`elasticity of demand between two products where “an increase in the price of one product leads to
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`an increase in demand for another.” Olin Corp. v. FTC, 986 F.2d 1295, 1298 (9th Cir. 1993).
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`Additionally, “[w]ithin a general product market, ‘well-defined submarkets may exist
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`which, in themselves, constitute product markets for antitrust purposes.’” Hicks, 897 F.3d at 1121
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`(quoting Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962)). A plaintiff may allege a
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`distinct submarket for a product by alleging “practical indicia” of the submarket. Brown Shoe,
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`370 U.S. at 325. Examples of “practical indicia” include: “industry or public recognition of the
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`submarket as a separate economic entity, the product’s peculiar characteristics and uses, unique
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`production facilities, distinct customers, distinct prices, sensitivity to price changes, and
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`specialized vendors.” Id.
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`The Ninth Circuit has held that “what constitutes a relevant market is a factual
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`determination for the jury.” Image Tech. Servs. v. Eastman Kodak, 125 F.3d 1195, 1203 (9th Cir.
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`1997). Furthermore, the Ninth Circuit has held that the “definition of the relevant market is
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`basically a fact question dependent upon the special characteristics of the industry involved.”
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`Twin City Sportservice, Inc. v. Charles O’Finley & Co., 676 F.2d 1291, 1299 (9th Cir. 1982).
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`Although a defendant may raise market definition in a motion to dismiss, “the question of whether
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`the market should include other products is better resolved at the summary judgment stage.”
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`Datel Holdings Ltd. v. Microsoft Corp., 712 F. Supp. 2d 974, 997 (N.D. Cal. 2010). Accordingly,
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`“[o]n a motion to dismiss, the court need not engage in extensive analyses of reasonable
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`interchangeability and cross elasticity of demand.” In re Webkinz Antitrust Litig., 695 F. Supp. 2d
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`987, 995 (N.D. Cal. 2010). In other words, a plaintiff is “not required to identify every alleged
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`competitor in its pleadings.” FTC v. Facebook, Inc., No. 20-CV-3590-JEB, 2021 WL 2643627, at
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`*13 (D.D.C. June 28, 2021).
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`In turn, a plaintiff can establish market power either with “direct evidence” or with
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`“circumstantial evidence.” Rebel Oil Co. v. Atl. Richfield Co., 51 F.3d 1421, 1434 (9th Cir. 1995).
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`Direct evidence includes “evidence of restricted output and supracompetitive prices.” Id. (citing
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`FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 460–61 (1986)). However, “such direct proof is
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`only rarely available.” Microsoft, 253 F.3d at 51. Accordingly, a plaintiff typically establishes
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`market power with circumstantial evidence. Id.
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`The strongest circumstantial evidence of market power is evidence that the “defendant
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`owns a dominant share” of the relevant market and that the market has “significant barriers to
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`entry.” Rebel Oil, 51 F.3d at 1434. A showing that the defendant has a market share of greater
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`than 65% typically is sufficient to “establish a prima facie case of market power.” Eastman
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`Kodak, 125 F.3d at 1206. By contrast, “numerous cases hold that a market share of less than 50
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`percent is presumptively insufficient to establish market power.” Rebel Oil, 51 F.3d at 1438. In
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`turn, “[e]ntry barriers are ‘additional long-run costs that were not incurred by incumbent firms but
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`must be incurred by new entrants,’ or ‘factors in the market that deter entry while permitting
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`incumbent firms to earn monopoly returns.’” Id. at 1439 (citing Los Angeles Land Co. v.
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`Brunswick Corp., 6 F.3d 1422, 1427–28 (9th Cir. 1993)).
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` Consumers Adequately Allege that Facebook Has Monopoly Power in the Social
`Network and Social Media Markets
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`Consumers allege that Facebook has monopoly power in the Social Network and Social
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`Media Markets. Facebook contends that, as defined by Consumers, the Social Network and Social
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`Media Markets are not cognizable product markets. Facebook also contends that, even if those
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`markets are cognizable, Consumers have not plausibly alleged that Facebook has monopoly
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`power. For the reasons below, the Court rejects these arguments.
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` Consumers Adequately Allege that the Social Network and Social Media
`Markets are Cognizable Product Markets
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` Consumers Adequately Allege the Social Network Market
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`According to Consumers, a social network service is a distinct type of social media
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`service, which is an online service that enables users “to distribute various forms of media—such
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`as text messages, photos, videos, and music—to other users of the same application.” CC ¶ 72.
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`Specifically, a social network service enables “users to find, communicate, and interact with
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`friends, family, personal acquaintances, and other people with whom the users have shared
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`Case No. 20-CV-08570-LHK
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`interests or connections.” Id. ¶ 56. Facebook, for example, allows users to create profiles, to
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`designate other users as “friends,” to share media and information with other users, to form groups
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`with other users based on common interests, to plan events with other users, and to play games
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`with other users. Id. ¶ 51.
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`Consumers allege that social network services are not “reasonably interchangeable” with
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`other online services and that there is a distinct Social Network Market, which is a “part or sub-
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`part of the Social Media Market.” Id. ¶ 56. Under Consumers’ definition, Facebook is the only
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`significant social network service and other social network services, such as Diaspora, Ello, Vero,
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`Clubhouse, and Reddit “constitute ‘only a very small drop in the ocean compared to Facebook.’”
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`Id. ¶ 68. However, in the past, Myspace, Friendster, Orkut, Bebo, Flip.com, and Google+
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`competed with Facebook in the Social Network Market. Id. ¶¶ 36–37.
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`Facebook contends that Consumers’ allegations are inadequate because Consumers have
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`not provided a basis for determining which products are in the Social Network Market and
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`because Consumers unreasonably exclude “countless” services that allow users to “kill time.”
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`Mot. at 16–17. For the reasons below, the Court rejects Facebook’s contentions.
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`To plead a product market based on “reasonable interchangeability,” a plaintiff must allege
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`details about a product’s “‘price, use and qualities’” and explain why products with