Power Play: Company Again Alleges Facebook Is A Monopoly

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Power.com is again trying to convince a court that Facebook unlawfully monopolizes the social marketing space by preventing users from automatically exporting their data to other sites.

In a new set of legal papers, Power alleges that Facebook's anti-scraping tactics -- which include bringing or threatening copyright infringement lawsuits against companies like Power that help users export data -- have contributed to the site's 59% market share.

"For approximately the past 36 months, Facebook has threatened dozens of new entrants since 2006 with baseless intellectual property claims, and has engaged in systematic and widespread copyright misuse," Power.com argues in papers filed recently with the federal district court in San Jose, Calif.

Power aggregates data from social networking sites, enabling users with accounts at sites like Orkut, MySpace, LinkedIn and Twitter to access all of their information from one portal. Power enables this functionality by asking users to provide log-in information for their social networking sites and then importing their information.

The legal dispute with Facebook dates back to late last year, when Facebook sued Power for copyright infringement for making momentary copies of Facebook's Web pages in order to extract information. Power countersued, alleging that Facebook was violating federal antitrust law as well as California's unfair competition law.

In October, U.S. District Court Judge Jeremy Fogel in San Jose dismissed Power's counterclaims, saying the company's legal papers didn't provide sufficient details for Power to proceed with the monopoly allegations.

At the time Fogel said that Power could file amended papers, which the company did last week.

Power.com now says Facebook's attempt to discourage other sites from helping users transfer data has "reduced MySpace's market share by more than half in the past year, and has prevented any other entrant from garnering more than 2.38% of the market." Power references Hitwise data for the proposition that MySpace had a 30% share of the social networking market in September, down from around 67% the year before.

But cyberlawyer Venkat Balasubramani of Seattle said he's skeptical that statistics about market share will persuade Fogel that Facebook is violating antitrust law. "Since the judge dismissed the complaint initially, you'd think there would be some more meat for the judge to latch on to," Balasubramani says.

He adds that Power hasn't identified specific predatory conduct on Facebook's part. "Customers are free to go out and join whatever social network they want," he says.

What's more, he says, Facebook can argue that it has legitimate security reasons for protesting automatic scraping, including fears about phishing scams.

A Facebook spokesperson said the company didn't see any merit in Power's amended papers.

1 comment about "Power Play: Company Again Alleges Facebook Is A Monopoly".
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  1. Montase Alchouiki from quickmatr, December 2, 2009 at 4:14 p.m.

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