throbber
USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 1 of 42
`ORAL ARGUMENT NOT YET SCHEDULED
`
`In the United States Court of Appeals
`for the District of Columbia Circuit
`
`No. 21-7078
`
`STATE OF NEW YORK, et al.,
`
`
`
`Plaintiffs-Appellants,
`
`v.
`FACEBOOK, INC.,
`Defendant-Appellee.
`
`
`
`
`
`
`
`
`On Appeal from the United States District Court for the District of Columbia in
`Case No. 1:20-cv-03589-JEB, Honorable James E. Boasberg, U.S. District Judge
`BRIEF OF WASHINGTON LEGAL FOUNDATION AND
`INFORMATION TECHNOLOGY & INNOVATION
`FOUNDATION AS AMICI CURIAE IN SUPPORT OF
`DEFENDANT-APPELLEE
`
`
`
`
`
`
`
`
`
`
`
`CORY L. ANDREWS
`JOHN M. MASSLON II
`WASHINGTON LEGAL FOUNDATION
`2009 Massachusetts Avenue, NW
`Washington, DC 20036
`(202) 588-0302
`candrews@wlf.org
`jmasslon@wlf.org
`
`ZACHARY D. TRIPP
`WEIL, GOTSHAL & MANGES LLP
`2001 M Street, NW, Suite 600
`Washington, DC 20036
`(202) 682-7000
`zack.tripp@weil.com
`
`MARK PINKERT
`WEIL, GOTSHAL & MANGES LLP
`1395 Brickell Avenue, Suite 1200
`Miami, Florida 33176
`(305) 577-3100
`mark.pinkert@weil.com
`Counsel for Amici Curiae
`
`March 28, 2022
`
`COUNSEL PRESS, LLC
`
`
`
`
` (202) 783-7288 * (888) 277-3259
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 2 of 42
`
`CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED
`CASES
`Pursuant to Circuit Rule 28(a)(1), amici curiae certify as follows:
`
`A. Parties and Amici Curiae
`All parties appearing in this court are listed in the Brief for
`
`Plaintiffs-Appellants. Amici curiae on this brief are the Washington
`
`Legal Foundation and the Information Technology and Innovation
`
`Foundation.
`
`B. Rulings Under Review
`References to the rulings at issue in the appeal are listed in the
`
`Brief for Plaintiffs-Appellants.
`
`C. Related Cases
`FTC v. Meta Platforms, Inc., No. 1:20-cv-03590, pending before the
`
`United States District Court for the District of Columbia.
`
`
`
`Dated: March 28, 2022
`
`
`/s/ Zachary D. Tripp
`Zachary D. Tripp
`
`
`
`
`
`
`i
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 3 of 42
`
`DISCLOSURE STATEMENT
`Pursuant to Rule 29(a)(4)(A) of the Federal Rules of Appellate
`
`Procedure, and consistent with D.C. Cir. Rule 26.1, amici curiae state
`
`that Washington Legal Foundation and the Information Technology and
`
`Innovation Foundation are each nonpartisan, nonprofit organizations
`
`with no parent corporation and no publicly held corporation owning 10%
`
`or more of their stock or other interest in either organization.
`
`
`
`
`
`ii
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`

`

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`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 4 of 42
`
`TABLE OF CONTENTS
`
`B. 
`
`2. 
`
`3. 
`
`Page
`Certificate as to Parties, Rulings, and Related Cases ............................... i 
`Disclosure Statement ................................................................................. ii 
`Interest of Amici Curiae ............................................................................. 1 
`Summary of Argument ............................................................................... 2 
`Argument .................................................................................................... 6 
`I. 
`The District Court Properly Dismissed the States’
`Section 2 Claim ........................................................................ 6 
`A. 
`The District Court Correctly Applied the
`Aspen/Trinko Framework .............................................. 6 
`The States’ and DOJ’s Counterarguments Lack
`Merit .............................................................................. 13 
`1. 
`Aspen Is a Limited Exception, Not a Broad
`and Amorphous Duty-to-Deal Standard ............. 13 
`The Lack of a Prior Course of Dealing Is
`Fatal ..................................................................... 18 
`The States and DOJ Improperly Focus on
`“Purpose” .............................................................. 21 
`II.  Antitrust Policy Weighs Against Novel Judicial
`Intervention ............................................................................ 23 
`Conclusion ................................................................................................. 31 
`Certificate Regarding Separate Brief ...................................................... 32 
`Certificate of Compliance ......................................................................... 33 
`Certificate of Service ................................................................................ 34 
`
`
`
`
`
`
`
`iii
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`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 5 of 42
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc.,
`881 F.2d 1396 (7th Cir. 1989) .............................................................. 22
`In re Adderall XR Antitrust Litigation,
`754 F.3d 128 (2d Cir. 2014) ................................................................. 17
`ASAP Paging Inc. v. CenturyTel of San Marcos Inc.,
`137 F. App’x 694 (5th Cir. 2005) ......................................................... 10
`Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,
`472 U.S. 585 (1985) ...................................................................... passim
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) .............................................................................. 18
`Berkey Photo, Inc. v. Eastman Kodak Co.,
`603 F.2d 263 (2d Cir. 1979) ................................................................... 9
`Continental T.V., Inc. v. GTE Sylvania Inc.,
`433 U.S. 36 (1977) .................................................................................. 7
`Covad Communications Co. v. BellSouth Corp.,
`374 F.3d 1044 (11th Cir. 2004) ............................................................ 10
`Covad Communications Co. v. Bell Atlantic Corp.,
`398 F.3d 666 (D.C. Cir. 2005) .............................................................. 10
`Data General Corp. v. Grumman Systems Support Corp.,
`36 F.3d 1147 (1st Cir. 1994) .................................................................. 9
`In re Elevator Antitrust Litigation,
`502 F.3d 47 (2d. Cir. 2007) .................................................................. 10
`FTC v. Qualcomm Inc.,
`969 F.3d 974 (9th Cir. 2020) .............................................. 10, 18, 22, 23
`
`
`
`iv
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`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 6 of 42
`
`FTC v. Vyera Pharmaceuticals, LLC,
`479 F. Supp. 3d 31 (S.D.N.Y. 2020) ............................................... 19, 20
`Intergraph Corp. v. Intel Corp.,
`195 F.3d 1346 (Fed. Cir. 1999) .............................................................. 9
`Lorain Journal Co. v. United States,
`342 U.S. 143 (1951) .................................................................. 12, 13, 19
`Monsanto Co. v. Spray-Rite Service Corp.,
`465 U.S. 752 (1984) .............................................................................. 14
`Morris Communications Corp. v. PGA Tour, Inc.,
`364 F.3d 1288 (11th Cir. 2004) .............................................................. 8
`New York Mercantile Exchange, Inc. v. Intercontinental
`Exchange, Inc.,
`323 F. Supp. 2d 559 (S.D.N.Y. 2004) ................................................... 10
`Novell, Inc. v. Microsoft Corp.,
`731 F.3d 1064 (10th Cir. 2013) .......................................... 10, 13, 18, 22
`Olympia Equipment Leasing Co. v. Western Union Telegraph
`Co.,
`797 F.2d 370 (7th Cir. 1986) ................................................ 7, 15, 16, 17
`Otter Tail Power Co. v. United States,
`410 U.S. 366 (1973) ........................................................................ 18, 19
`Pac. Bell Tel. Co. v. linkLine Communications, Inc., 555 U.S.
`438, (2009) .................................................................................... 6, 7, 18
`Service & Training, Inc. v. Data General Corp.,
`963 F.2d 680 (4th Cir. 1992) .................................................................. 9
`SOLIDFX, LLC v. Jeppesen Sanderson, Inc.,
`841 F.3d 827 (10th Cir. 2016) ................................................................ 9
`St. Luke’s Hospital v. ProMedica Health System, Inc.,
`8 F.4th 479 (6th Cir. 2021) .................................................................. 17
`
`
`
`v
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 7 of 42
`
`United States v. Colgate & Co.,
`250 U.S. 300 (1919) ................................................................................ 6
`United States v. Microsoft Corp.,
`253 F.3d 34 (D.C. Cir. 2001) .................................................... 13, 22, 28
`Verizon Communications Inc. v. Law Offices of Curtis V.
`Trinko, LLP,
`540 U.S. 398 (2004) ...................................................................... passim
`Other Authorities
`Phillip Areeda, Essential Facilities: An Epithet in Need of
`Limiting Principles, 58 Antitrust L.J. 841 (1989) .............................. 15
`Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law (5th
`ed. 2020) ....................................................................................... passim
`Khristopher J. Brooks, TikTok tops Google as the most
`visited website on the internet, CBS News (Dec. 23, 2021) ................ 25
`Dennis W. Carlton, A General Analysis of Exclusionary
`Conduct and Refusal to Deal—Why Aspen and Kodak Are
`Misguided, 68 Antitrust L.J. 659 (2001) ............................................. 30
`Alan Devlin, Antitrust As Regulation, 49 San Diego L. Rev.
`823 (2012) ............................................................................................. 23
`Satta Sarmah Hightower, How Startups Can Grow Faster
`With The Cloud, Forbes (Sept. 29, 2021) ............................................ 24
`Herbert Hovenkamp, Antitrust and the Movement of
`Technology, 19 Geo. Mason L. Rev. 1119 (2012) ................................ 28
`Herbert Hovenkamp, The Monopolization Offense, 61 Ohio
`St. L.J. 1035 (2000) ................................................................................ 3
`Michael Jacobs, Introduction: Hail or Farewell? The Aspen
`Case 20 Years Later, 73 Antitrust L.J. 59 (2005) ......................... 15, 17
`
`
`
`vi
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`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 8 of 42
`
`Geoffrey A. Manne & Joshua D. Wright, Google and the
`Limits of Antitrust: The Case Against the Case Against
`Google, 34 Harv. J.L. & Pub. Pol’y 171 (2011) .................................... 26
`David McGowan, Between Logic and Experience: Error Costs
`and United States v. Microsoft Corp., 20 Berkeley Tech.
`L.J. 1185 (2005) .................................................................................... 23
`Christopher Mims, Facebook Joins a Crowded Field in the
`Race to Build the ‘Metaverse.’ We All Have a Stake in the
`Outcome, Wall St. J. (Oct. 29, 2021) ................................................... 25
`Richard A. Posner, Antitrust in the New Economy, 68
`Antitrust L.J. 925 (2001). ........................................................ 24, 26, 29
`Abdo Riani, 3 Big Factors That Influence The Quality And
`Cost Of Your Startup App, Forbes (Feb. 6, 2020) ............................... 24
`Howard A. Shelanski & J. Gregory Sidak, Antitrust
`Divestiture in Network Industries, 68 U. Chi. L. Rev. 1
`(2001) .................................................................................................... 29
`Angelos Vlazakis & Angeliki Varela, Amazon’s Antitrust
`Fair Play, A Transatlantic Evaluation, 41 N. Ill. U. L.
`Rev. 64 (2020) ....................................................................................... 27
`Georgia Wells, TikTok Wants to Grow Up, but Finds It
`Tough to Keep Kids Out, Wall St. J. (Feb. 16, 2020) .......................... 29
`Joshua D. Wright & Murat C. Mungan, The Easterbrook
`Theorem: An Application to Digital Markets, 130 Yale L.J.
`Forum 622 (2021). ................................................................................ 27
`
`
`
`
`
`
`
`
`vii
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`

`

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`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 9 of 42
`
`INTEREST OF AMICI CURIAE1
`Washington Legal Foundation (WLF) is a nonprofit, public-interest
`
`law firm and policy center with supporters nationwide. WLF promotes
`
`free enterprise, individual rights, limited government, and the rule of
`
`law. It often appears as amicus curiae in important antitrust cases. See,
`
`e.g., Apple Inc. v. Pepper, 139 S. Ct. 1514 (2019); FTC v. Actavis Inc., 570
`
`U.S. 136 (2013); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).
`
`The Information Technology and Innovation Foundation (ITIF) is
`
`an independent nonprofit, nonpartisan think tank that formulates,
`
`evaluates, and promotes policies that spur innovation and progress. ITIF
`
`believes that technological innovation, particularly in information
`
`technology, is at the heart of America’s economic prosperity. ITIF often
`
`appears as amicus curiae in technology-related cases. See, e.g., Mozilla
`
`Corp. v. FCC, 940 F.3d 1 (D.C. Cir. 2019).
`
`The central aim of antitrust law is to ensure free-market
`
`competition and provide consumers with better goods and services at
`
`
`1 No party’s counsel authored any part of this brief. No one, apart
`from amici and their counsel, contributed money intended to fund the
`brief’s preparation or submission. All parties consented to amici’s filing
`this brief.
`
`
`
`1
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 10 of 42
`
`lower prices. The district court’s decision promotes these goals, as it
`
`dismissed the plaintiff States’ Section 2 claim based on Facebook’s policy
`
`to prevent competitors from using its Platform for free to harm
`
`Facebook’s core business. The States and the Department of Justice
`
`(DOJ) argue for reversal by seeking a broad expansion of refusal-to-deal
`
`liability. Their proposals would erode the procompetitive aims of
`
`antitrust law and would force courts into the role of central planners
`
`where they are least equipped to perform that role—in cutting-edge and
`
`fast-moving technological environments.
`
`SUMMARY OF ARGUMENT
`Antitrust law broadly honors the right of a business to refuse to
`
`cooperate with its competitors. Indeed, cooperation among competitors
`
`can be a red flag, as collusion is the “supreme evil of antitrust.” Verizon
`
`Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408
`
`(2004). Exceptions are accordingly rare: the Supreme Court has
`
`recognized that a monopolist may be unable to end a preexisting and
`
`profitable relationship with a competitor when that decision is explicable
`
`only as a plan to harm competition itself. See Aspen Skiing Co. v. Aspen
`
`Highlands Skiing Corp., 472 U.S. 585, 607–09 (1985). But that exception
`
`
`
`2
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 11 of 42
`
`has always stood on shaky ground. Aspen was sharply criticized. See, e.g.,
`
`Herbert Hovenkamp, The Monopolization Offense, 61 Ohio St. L.J. 1035,
`
`1044 (2000). And in Trinko, the Supreme Court carefully cabined Aspen
`
`as a “limited exception” that lies “at or near the outer boundary of
`
`[Sherman Act] § 2 liability” and that must be applied with “cautio[n].”
`
`Trinko, 540 U.S. at 408–09. Lower courts have correctly followed Trinko
`
`and refrained from expanding Aspen beyond its unique facts.
`
`The district court properly understood the Aspen/Trinko
`
`framework and correctly dismissed the States’ Section 2 claim
`
`challenging Facebook’s Platform policy. Under that policy, Facebook
`
`limited Platform access for app developers who would use the Platform
`
`to replicate Facebook’s core functions or export Facebook’s data to rivals.
`
`That policy was forward-looking and, as relevant here, did not terminate
`
`an existing venture with a rival (much less a profitable one). Because
`
`Platform access was free to app developers, Facebook could not have been
`
`forsaking short-term profits to achieve anticompetitive ends. Facebook’s
`
`rational business justification was self-evident. It did not want to help
`
`rivals replicate its core functions, nor did it want to share its intellectual
`
`property with its rivals. And it certainly did not want to do either thing
`
`
`
`3
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`

`

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`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 12 of 42
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`for free. That is rational competition, not unlawful anticompetitive
`
`behavior, as the district court correctly concluded.
`
`To reach a contrary result, the States and DOJ ask this Court to
`
`treat Aspen as a “flexible” test, e.g., States Br. 63, apparently satisfied by
`
`a refusal to deal coupled with mere allegations of a purpose to harm
`
`competitors. This Court should decline that effort to radically expand
`
`refusal-to-deal liability, which Trinko so carefully limited.
`
`First, the States’ argument that Aspen provides a “flexible” and
`
`open-ended test conflicts with Trinko, which foreclosed a general duty to
`
`deal and emphasized that Aspen’s refusal-to-deal exception was
`
`“limited.” 540 U.S. at 409. The Supreme Court has never endorsed a duty
`
`to deal with competitors for free and, to the contrary, emphasized that
`
`Aspen involved a defendant that refused to deal at retail prices. Id.
`
`The prior course of dealing is also a critical part of that exception,
`
`not just a factor that may be disregarded. Without a prior course of
`
`dealing, there is no evidence that a particular arrangement would be
`
`profitable, no reason to infer that the monopolist’s otherwise lawful
`
`refusal was unjustified, and no prior terms to guide the court in
`
`determining what terms to impose on the competitors. Not only would
`
`
`
`4
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`

`

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`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 13 of 42
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`courts become “central planners”—something antitrust law seeks to
`
`avoid, see id. at 408—but, worse, they would be centrally planning on a
`
`blank slate. And a subjective motivation to harm competitors cannot
`
`differentiate lawful from unlawful conduct, as harming competitors is the
`
`essence of competition. What is needed is conduct with the effect of
`
`harming competition itself, which is absent here.
`
`Second, the fast-moving and ever-changing market here is
`
`particularly unsuited to imposing novel duties to deal, making the
`
`proposed expansions of Aspen even more problematic. The market for
`
`social media services, like other online services, is highly disruptive, with
`
`extraordinarily low barriers to entry and rapid changes from constant
`
`innovation and competition. For example, Facebook has long faced
`
`competition from companies like Twitter; Snapchat quickly rose to
`
`prominence; and now TikTok has emerged. Facebook has responded with
`
`innovations of its own, developing a new platform called the metaverse,
`
`focused on 3D social experiences. In this industry, competition is
`
`vigorous, disruptive, and only a click away: A user can shift from
`
`Facebook to a competitor simply by opening a different app or website.
`
`
`
`5
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 14 of 42
`
`Judicial creation of a novel duty to deal in this fast-changing and
`
`highly competitive industry would threaten to harm competition and
`
`consumers. It would discourage growth and create a powerful incentive
`
`to free-ride on others’ success. It would force courts to act as central
`
`planners by crafting the terms on which competitors must deal with one
`
`another. By the time courts arrive at their preferred terms, the fast-
`
`moving industry likely will have already morphed, rendering the
`
`intrusion obsolete or misplaced. And courts could not limit an expanded
`
`duty to deal to the social media space, because any new antitrust duty
`
`would reach economy-wide. This Court should refrain from breaking so
`
`much new ground, and instead should affirm the district court’s
`
`thoughtful judgment.
`
`I.
`
`ARGUMENT
`The District Court Properly Dismissed the States’ Section 2
`Claim
`A. The District Court Correctly Applied the Aspen/Trinko
`Framework
`Businesses are as a rule “free to choose the parties with whom they
`
`will deal.” Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 448
`
`(2009); see also United States v. Colgate & Co., 250 U.S. 300, 307 (1919)
`
`(a trader may “freely . . . exercise his own independent discretion as to
`
`
`
`6
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 15 of 42
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`parties with whom he will deal” and “announce in advance the
`
`circumstances under which he will refuse to sell”). Exceptions are “rare.”
`
`linkLine, 555 U.S. at 448. A plaintiff cannot survive a motion to dismiss
`
`merely by grousing about what it thinks the dominant business could
`
`have done differently. Rather, it must plausibly allege that the refusal to
`
`deal would, absent monopoly power, be an irrational business decision.
`
`In a thorough and well-supported order, the district court correctly
`
`held that the States’ antitrust claim fails this demanding standard.
`
`Facebook provides a free Platform for reaching its users, and its policy
`
`was to deny access to app developers who would use the Platform to
`
`replicate Facebook’s core functions or export Facebook’s data to rivals.
`
`(JA230–31, 254–55). Facebook’s decision not to offer its competitive
`
`advantage to rivals for free cannot support a Section 2 claim for many
`
`reasons.
`
`First, there can be no Section 2 liability for declining to deal with a
`
`competitor for free, particularly based on those minimal restrictions.
`
`Preventing free-riding is an inherently justified business decision. See
`
`Cont’l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 55 (1977); Olympia
`
`Equip. Leasing Co. v. W. Union Tel. Co., 797 F.2d 370, 377–78 (7th Cir.
`
`
`
`7
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 16 of 42
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`1986) (“Olympia had no right under antitrust law to take a free ride on
`
`its competitor’s sales force.”).
`
`“[A] company—even a monopolist company—that expends time and
`
`money to create a valuable product does not violate the antitrust laws
`
`when it declines to provide that product to its competitors for free.”
`
`Morris Commc’ns Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1298 (11th Cir.
`
`2004); see also id. at 1296 (Section 2 does not require one “to give its
`
`product freely to its competitors”); Phillip E. Areeda & Herbert
`
`Hovenkamp, Antitrust Law ¶ 772c2 (5th ed. 2020) (Areeda &
`
`Hovenkamp) (Aspen “certainly does not hold that a monopolist must
`
`make its goods, services, or facilities available at a competitive rather
`
`than at a monopolistic price,” as it “generally assumed that an otherwise
`
`lawful monopolist does not violate the statute by charging a monopoly
`
`price”). And the justification for denying free access is even stronger
`
`when the competitor would use its access to replicate the company’s core
`
`functionality or export proprietary data to rivals. It is obviously rational
`
`for a company to decline to cooperate for free with a rival that will abuse
`
`that cooperation by hurting the company itself.
`
`
`
`8
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`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 17 of 42
`
`Many courts have recognized that protecting intellectual property,
`
`including trade secrets, is a valid justification for declining to do business
`
`with a rival, thus precluding Section 2 liability. See Data Gen. Corp. v.
`
`Grumman Sys. Support Corp., 36 F.3d 1147, 1181–89 (1st Cir. 1994),
`
`abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S.
`
`154 (2010) (author’s desire to exclude others from using its copyrighted
`
`work “is a presumptively valid business justification”); Intergraph Corp.
`
`v. Intel Corp., 195 F.3d 1346, 1363 (Fed. Cir. 1999) (owner of proprietary
`
`information “has no obligation to provide it, whether to a competitor,
`
`customer, or supplier”); see also SOLIDFX, LLC v. Jeppesen Sanderson,
`
`Inc., 841 F.3d 827, 841–43 (10th Cir. 2016); Serv. & Training, Inc. v. Data
`
`Gen. Corp., 963 F.2d 680, 686 (4th Cir. 1992); Berkey Photo, Inc. v.
`
`Eastman Kodak Co., 603 F.2d 263, 285 (2d Cir. 1979).
`
`Second, as the district court explained, the lack of a prior course of
`
`dealing is fatal.2 See Areeda & Hovenkamp ¶ 772e (“The [Aspen] Court
`
`did not impose a prospective duty to deal where no such dealing had
`
`
`2 The States alleged a prior course of dealing as to seven particular
`companies, but the district court correctly dismissed those claims
`because injunctive relief is unavailable for events that occurred over five
`years ago. (JA247-51).
`
`
`
`9
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 18 of 42
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`occurred previously, and there is no reason for thinking it would have
`
`done so.”). Several courts have held that a prior course of dealing is a
`
`prerequisite to refusal-to-deal liability. The district court relied on FTC
`
`v. Qualcomm Inc., 969 F.3d 974, 993 (9th Cir. 2020), and Novell, Inc. v.
`
`Microsoft Corp., 731 F.3d 1064, 1074 (10th Cir. 2013) (Gorsuch, J.)
`
`(“[T]here must be a preexisting voluntary and presumably profitable
`
`course of dealing between the monopolist and rival.”). Relying on Trinko,
`
`this Court articulated the same rule in Covad Communications Co. v. Bell
`
`Atlantic Corp., 398 F.3d 666, 673 (D.C. Cir. 2005), and affirmed the
`
`dismissal of a refusal-to-deal claim in which the plaintiff did not allege
`
`the defendant “had at one time voluntarily dealt with” the plaintiff or
`
`that “it would ever have been in [the defendant’s] interest to have done
`
`so.” Many other cases adopt the same rule.3
`
`
`3 In re Elevator Antitrust Litig., 502 F.3d 47, 53 (2d. Cir. 2007)
`(dismissing for lack of a prior course of dealing—the “sole exception” to
`the right to refuse to deal); ASAP Paging Inc. v. CenturyTel of San Marcos
`Inc., 137 F. App’x 694, 698 (5th Cir. 2005) (similar); Covad Commc’ns Co.
`v. BellSouth Corp., 374 F.3d 1044, 1049 (11th Cir. 2004) (“Trinko now
`effectively makes the unilateral termination of a voluntary course of
`dealing a requirement for a valid refusal-to-deal claim under Aspen.”); see
`also N.Y. Mercantile Exch., Inc. v. Intercontinental Exch., Inc., 323 F.
`Supp. 2d 559, 571 (S.D.N.Y. 2004) (dismissing claim with “no history of
`
`
`
`10
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 19 of 42
`
`That makes sense. Without a prior business relationship, there can
`
`be no basis to infer that a particular course of dealing would be profitable.
`
`See Trinko, 540 U.S. at 409 (describing the prior voluntary course of
`
`dealing as “presumably profitable,” and the termination as “suggest[ing]
`
`a willingness to forsake short-term profits to achieve an anticompetitive
`
`end”). Without a prior course of dealing, a mere refusal to deal also would
`
`not reflect a “decision by a monopolist to make an important change in
`
`the character of the market.” Aspen, 472 U.S. at 604. Rather, non-dealing
`
`would simply replicate the preexisting status quo that the companies
`
`were not working together. The preexisting course of dealing is necessary
`
`to identify a particular action that altered the market by harming
`
`competition itself.
`
`Even if there were some extraordinarily rare situation in which a
`
`refusal to deal with a new counterparty could trigger Section 2 liability,
`
`this would not be it. Facebook’s policy was anything but “arbitrary,” see
`
`Areeda & Hovenkamp ¶ 770a, because Facebook had self-evident
`
`business justifications: it declined to give free access to developers who
`
`
`cooperation” that could “shed[ ] … light upon the motivation of its refusal
`to deal”).
`
`
`
`11
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 20 of 42
`
`would use Facebook’s Platform to replicate Facebook’s core functionality
`
`or to use Facebook’s proprietary data to help Facebook’s competitors.
`
`(JA230–31, 254–55). That is not refusing to engage in a presumptively
`
`profitable course of dealing, as in Aspen. It is rational and appropriate to
`
`refuse business that
`
`is
`
`inherently non-profitable and
`
`instead
`
`presumptively damaging.
`
`The district court also correctly rejected the States’ effort to reframe
`
`the policy as a form of “conditional dealing.” (JA251). In Lorain Journal
`
`Co. v. United States, 342 U.S. 143 (1951), the Supreme Court held that it
`
`was unlawful for a monopolist newspaper to refuse to sell advertising to
`
`any company that also purchased advertising from a local radio station
`
`that the newspaper viewed as a competitor. But this case is different.
`
`Facebook did not condition access to the Platform on a guarantee that
`
`developers refuse to provide apps to or otherwise access competing social
`
`networks. (JA252–55). Developers were free to use and interact with
`
`other social networks all they wanted; the policy merely limited what
`
`apps could do on Facebook’s own platform (or when exporting data from
`
`Facebook’s own platform). (JA230–31, 254–55). Such a “focused
`
`prohibition on the use of a monopolist’s own facilities” cannot limit
`
`
`
`12
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 21 of 42
`
`opportunities for competitors to enter or remain in the market, and so
`
`the claim—even re-packaged as “conditional dealing”—fails. (JA255–56).
`
`The States also rely on United States v. Microsoft Corp., 253 F.3d
`
`34, 74–76 (D.C. Cir. 2001), and, specifically, Microsoft’s exclusionary
`
`conduct relating to its version of the Java Virtual Machine. See States
`
`Br. 65–66; DOJ Br. 16–17. But the States’ argument fails for the same
`
`reasons as above. Microsoft (like Lorain) involved exclusive dealing. See
`
`Microsoft, 253 F.3d at 75 (explaining that Microsoft “conditioned receipt
`
`of Windows technical information upon” vendors’ “agreement to promote
`
`Microsoft’s [Java technology] exclusively”). Facebook’s policy did not
`
`condition access on exclusivity.
`
`B. The States’ and DOJ’s Counterarguments Lack Merit
`1. Aspen Is a Limited Exception, Not a Broad and
`Amorphous Duty-to-Deal Standard
`The States and DOJ argue that this Court should adopt a “flexible”
`
`test and that the district court erred in treating Aspen and Trinko as
`
`“rigid.” States Br. 63; DOJ Br. 5, 7, 19 (rejecting a “rigid checklist” and
`
`advocating a “flexible, fact-specific burden-shifting approach”). For the
`
`States and DOJ, it appears sufficient for the plaintiff to allege a refusal
`
`to deal coupled with an “anticompetitive purpose,” which apparently can
`
`
`
`13
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 22 of 42
`
`be exhibited by myriad factors beyond the three in Aspen. States Br. 64;
`
`DOJ Br. 21, 24. That freewheeling characterization of refusal-to-deal
`
`liability, however, cannot be squared with Aspen and much less with
`
`Trinko’s clarification that Aspen is a “limited” exception that should be
`
`applied with caution.
`
`In Aspen, the Court began by reaffirming that antitrust law places
`
`a “high value” on a business’s “right to deal, or refuse to deal, with
`
`whomever it likes, as long as it does so independently.” 472 U.S. at 601
`
`& n.27 (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752,
`
`761 (1984)). The Court ultimately held that that important right was “not
`
`unqualified,” however, and approved a jury instruction that a refusal to
`
`deal could violate Section 2 only if no “valid business reasons exist for
`
`that refusal.” Id. at 601, 604–05. It found the record supported the jury’s
`
`finding
`
`that
`
`the defendant
`
`sacrificed
`
`short-term profit
`
`for
`
`anticompetitive ends in the unusual circumstances of that case, where
`
`the defendant unilaterally halted a preexisting arrangement with a
`
`competitor and then refused to provide access (sale of lift tickets) even at
`
`retail prices. Even then, the Court upheld liability only because the
`
`
`
`14
`
`

`

`
`USCA Case #21-7078 Document #1940828 Filed: 03/28/2022 Page 23 of 42
`
`defendant “fail[ed] to offer any efficiency justification whatever for its
`
`pattern of conduct,” even though it was “pressed” to do so. Id. at 608–09.
`
`Aspen can and should be read narrowly. The facts were peculiar and
`
`the Court did not appear to “consider the implication

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