• by Wendy Davis  @wendyndavis, January 27, 2025

Handing a victory to Meta Platforms, a federal judge refused to grant class-action status to Facebook users who accused the company of illegally monopolizing the “personal social network services” market by misrepresenting its privacy practices.

The ruling, issued Friday by U.S. District Court Judge James Donato in the Northern District of California, doesn't prohibit the users from proceeding as individuals -- but doing so is often cost-prohibitive in antitrust cases.

The decision stemmed from a complaint brought against Meta in 2020 by Vermont resident Maximilian Klein and Illinois resident Sarah Grabert. They alleged that Facebook grew in popularity after deceiving consumers about its privacy policy, then “weaponized” consumer data in order to acquire potential rivals like social media service Instagram (acquired for $1 billion in 2012) and messaging service WhatsApp (bought for $19 billion in 2014).

The duo sued soon after a Democratic report from the House Subcommittee on Antitrust accused Meta of using its “data advantage” to identify nascent competitors and then “acquire, copy, or kill” them.

They sought to represent a class of people in the U.S. who used Facebook December 2016 and December 2020.

The plaintiffs argued to Donato that class-action status was appropriate on the theory that all Facebook users were equally “overcharged” by Meta; that theory centered on a claim that Meta would have had to pay each user $5 per month for his or her personal data, had it not obtained a monopoly. The $5 per month figure came from an expert witness presented by the plaintiffs -- economist Nichola Economides.

On Friday, Donato rejected that argument.

“Although there is no doubt that Dr. Economides is a well-qualified economist, his opinion, among others, that Facebook users suffered antitrust injury because Meta did not pay them $5 a month for their personal data is unsupported by the record,” Donato ruled.

“There is no doubt, as he says, that Meta makes a lot of money from user data, but he did not demonstrate that Meta would be compelled to retain users by paying them, rather than through innovations in services and product quality,” Donato wrote.

He added that Economides' opinion “is a conclusion of fiat rather than evidence.”

The ruling dealt only with users' claims. Meta still faces an antitrust lawsuit by advertisers and by the Federal Trade Commission.