A federal judge has rejected the certification of a class-action lawsuit against Facebook’s parent company that challenged how Meta uses people’s personal data, calling the arguments of the plaintiffs’ expert witness unreliable and inadmissible.
Judge James Donato of the Northern District of California denied the certification in a Jan. 24 ruling on a lawsuit proposing a class of millions of Facebook users and a potential damages award of more than $50 billion. Donato pushed back at Meta attorneys’ characterization of expert witness Dr. Nicholas Economides’ antitrust arguments as “junk science,” but the judge ultimately rejected the expert’s arguments as "guesswork" that should be excluded under the Federal Rule of Evidence.
The plaintiffs in the lawsuit, who are residents of Illinois and Vermont, contended that the social media giant illegally monopolized what’s called the personal social network services (PSNS) market and misled users about how the company monetized their personal information.
“Facebook acquired its monopoly position, and has maintained that position, through repeated misrepresentations over its data collection and use practices,” the plaintiffs alleged. “Facebook claimed its focus on users’ privacy differentiated its social network from competitors, but its claims were false.”
Had the company played by the rules and not violated the federal Sherman Act by creating a “deception-based monopoly,” Facebook would have had to pay its users $5 per month to access their personal data in a truly competitive environment, according to Economides’ theories.
But Donato rejected the argument, pointing out that Meta has never competed in the PSNS market by paying its users for the use of privacy data.
“Dr. Economides never explains why Meta would focus exclusively on answering new competition by paying users,” the judge wrote in his opinion. “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.”
Economides’ assumption goes to the very heart of his theory that the proposed class of Facebook users sustained an antitrust injury through the company’s treatment of the privacy data, according to Donato.
A Meta spokesperson expressed satisfaction with the judge’s findings.
“Meta faces fierce competition for the time and attention of people and businesses,” the spokesperson told the Southern California Record in an email. “Our services became and remain popular because we evolve, innovate and invest in better experiences for everyone who uses them.”
Donato stressed that only admissible expert witness testimony could establish the antitrust injury in such class-action litigation.
“Dr. Economides cannot provide admissible opinions on antitrust injury,” he said. “Without those opinions, the user plaintiffs cannot establish that they have a class-wide method proving antitrust injury for either of their … claims.”
In its opposition to the class certification motion, Meta argued that alleged misrepresentations about privacy use were never a relevant issue for those who decided to use the platform from December 2016 through December 2020 – the timeframe for the proposed class.
“They used Facebook because they enjoy it, and found personalized value in it that (user plaintiffs) never account for,” the Meta brief argued..