BENTON - Owners of 107.1 FM and Advantage News may pursue an unfair competition suit against Facebook provider Meta Platforms, U.S. District Judge Staci Yandle ruled on March 5.
Yandle denied a motion to dismiss the suit for lack of jurisdiction, and with that authority she denied a motion to compel arbitration.
She found the dispute fell outside the scope of an arbitration agreement for platform users.
She found 107.1 owner Metroplex Communications alleged that Meta damaged it as a competitor and not as a user.
Metroplex sued Meta in 2022, claiming it inflated the number of people Facebook reached in order to divert advertisers from its competitors.
Meta counsel Andrew Clubok of Washington moved to compel arbitration in October 2022 and moved to dismiss a month later.
At a hearing last April, District Judge David Dugan asked Meta counsel Susan Engel of Washington if the arbitration agreement contemplated Metroplex’s claims.
Engel said the language was very broad.
She said Meta called attention to the agreement binding users when they clicked a green button and bought an ad.
Metroplex counsel Kevin Green of Goldenberg Heller in Edwardsville said Meta didn’t show Metroplex was a party to a contract.
He said harm occurred when someone saw false ads and chose not to use Metroplex.
He said the conduct occurred before anyone used Meta.
Dugan sensed a problem and said, “I used Facebook when I ran for election as a circuit judge in Madison County.”
He said his campaign manager set it up, “but it was still authorized by me.”
Later he asked Green if Metroplex bought Facebook ads on behalf of clients.
Green said, “I believe that’s part of their business.”
He said the claims exist whether Metroplex did or didn’t.
Engel said Metroplex placed dozens of ads on Meta.
“Metroplex, when it bought ads on behalf of some of its clients, moved its money instead of putting those ads on its radio station or its Advantage News site,” she wrote.
Engel said a Facebook page says, “Ads will help you reach the right people and your goals, connect with people you are looking for, share what is unique about your business, turn connections into customers.”
“Obviously that is not literally false,” she wrote.
“There is a pretty common understanding of what you see on Facebook, people saying things,” she added.
Engel said Meta requires folks to not have fake accounts.
She said it eliminates billions of accounts and it isn’t reasonable to believe it guarantees that there are no fake accounts.
“Any advertiser who advertises in digital properties, particularly Metroplex who is advertising all the time and knows about fake accounts, there is no reasonable consumer that could have been misled,” she said.
Metroplex counsel Justin Gelfand of St. Louis County said a number of places on the Facebook platform reference estimates of 5% and 11% false and duplicate accounts.
“Meta puts a number on the false and duplicate accounts and they know that number is false and that’s at the core of those allegations in our lawsuit,” he said.
“Meta does not say to potential ad buyers, we have no idea how many false and duplicate accounts we have,” he added.
“You are reaching essentially a whole bunch of non people,” Gelfand continued.
“You are reaching accounts that somebody may create for a pet which people do and Facebook acknowledges that in various contexts,” he said.
Six days later, Dugan recused himself.
The clerk randomly assigned Yandle.
In her current order, she first disposed of a claim that Metroplex lacked standing because it didn’t show data on lost sales.
She found lost sales could be plausibly inferred by allegations that Metroplex and Meta compete directly for the same customers.
Yandle rejected a claim that Metroplex failed to allege Meta’s statements influenced advertisers.
She also rejected a claim that Metroplex failed to state a claim for an injunction by not alleging an inadequate remedy at law.
“But ongoing unfair competition, which Metroplex has sufficiently alleged, can cause irreparable harm for which there is no adequate remedy,” she wrote.
Yandle rejected a claim that a statute of limitations ran out.
She found a limitation period doesn’t begin to run on a continuing or repeated injury until the date of the last injury or the date the acts cease.
On arbitration, she found Metroplex asserted a claim as a competitor.
She found the claim didn’t arise out of access or use of Meta products, “but is rather a lawsuit that would exist even if Metroplex had never entered into any agreements with Meta.”
“The language of the instant arbitration clause does not express an intent to arbitrate any dispute that could ever arise between the parties, but only those relating to the consumer’s use of the Meta products,” she wrote.
She has set trial to begin in January.