This blog is not primarily intended to be a legal analysis of US antitrust law or the rights and wrongs of the Facebook related court actions highlighted below. Rather, it considers the logistics of the attendant exercise and the financial and organisational implications. It also demonstrates that as an alternative to this lengthy, protracted and costly litigation, mediation is the appropriate way forward.
Those familiar with the USA’s constitutional and statutory framework will be aware of the importance that the American business, economic and legal frameworks attach to the principle of “Antitrust”. This is essentially an agglomeration of US Federal and State government laws that regulate the conduct and organization of business corporations and are generally intended to promote competition for the benefit of consumers. Of particular significance are three, on the face of it, elderly but nonetheless very relevant Federal statutes (1) which between them prohibit price-fixing and other collusive practices that unreasonably restrain trade. Additionally, they restrict mergers and acquisitions that may be seen as likely to substantially lessen competition and, for present purposes in particular, prohibit the abuse of monopoly power.
One very notable 1914 statutory creation was the Federal Trade Commission (FTC), an independent agency of the US government whose principal role is the enforcement of civil i.e. non-criminal US antitrust law and the promotion of consumer protection. Although it shares jurisdiction with the Antitrust Division of the US Department of Justice, the FTC is a very influential and powerful body hence its role in the court proceedings referred to below.
Opinions differ as to whether the US antitrust legal framework is a good or bad thing. Some argue that it prohibits rather than fosters free trade and that it is too intrusive. Many others, perhaps an overall majority of political, legal, economic and academic viewpoints, argue otherwise. Notwithstanding these views, the firmly enshrined antitrust legislation is invoked from time to time by Federal and State authorities as a means of enforcement, hence recent American media reports of court proceedings having recently been issued against Facebook (2).
It is reported that following a year long extensive investigation, a conglomerate of 46 US states, the District of Columbia and the U. S. Territory of Guam recently filed a lawsuit alleging that Facebook has very significantly breached US antitrust laws. The lawsuit which is coordinated by the New York State Attorney General, in essence alleges that Facebook has achieved its current dominance through a years-long strategy of anticompetitive tactics including its acquisitions of rivals such as Instagram and WhatsApp. It is further argued that as it has built up what some may see as a predominant status it has begun offering users a worse and worse privacy experience.
The FTC has also issued separate court proceedings. The two cases, filed in the District of Columbia Federal District Court, will probably be combined into one. It will not be altogether surprising if further proceedings are commenced, possibly by private individuals or corporations who have one interest or another in the issues surrounding Facebook (3). It is equally conceivable that other influential international bodies such as the European Union, may also contemplate court proceedings and that they will at the very least, closely monitor the US Court proceedings.
Even though the concerns of 49 different US statutory authorities have been very sensibly combined into these two actions and filed in the same court, the logistics of the exercise are staggering.
There is no “David and Goliath” dimension to all of this. The combined and coordinated weight, muscle and financial clout of these 49 statutory bodies is pitted against one of the richest, most powerful corporations in the world. Many of the most able civil lawyers in the US and by implication the most expensive, will be wholly occupied in litigating these cases for months if not years.
Given lawyers’ predilection for so doing it is more than likely that the legal arguments that are drafted will be very long and complex. However, as effective as the coordination mechanisms in place may prove to be, I suspect that it is most unlikely that all of the 49 authorities will speak with one voice on each and every issue. Given that different US states and authorities have differing political make ups, sometimes quite distinct statutory codes and different outlooks on law making, it is likely that the various legislatures will probably be seeking a range of outcomes. Accordingly, it is entirely conceivable that at times the umbrella under which the actions have been brought will be severely strained. It is also likely that there will be a long and complex sequence of appeals in respect of any preliminary and final court decisions with an accompanying very strong and potentially divisive element of trial by media.
The US Supreme Court which is likely to hear some or all of the anticipated appeals is perceived of as being constituted by people with different political views and there can be no guarantee that ultimately, it will speak with one voice and give a clear and unequivocal pronouncement. The combination of legal and hidden costs is likely to be eye watering with a very significant element being underwritten by a public purse already subjected to the very demanding strains wrought upon it by the combination of the Coronavirus pandemic and the related economic downturn.
There is also likely to be a lot of bargaining and negotiating and, although the interested parties will be encouraged do so, the court structures may not be able to accommodate the potentially very widely differing viewpoints and aspirations identified above. Mediation, which perhaps above all else can help parties move towards the point where both sides seek gains in a settlement and effectively distance themselves from threats and acrimony, is much better placed to acknowledge differing viewpoints and accommodate wide ranging aspirations.
Accordingly, as with so much other litigation, it is so often the case in public interest cases that the settlements that are ultimately reached are not so much a structured, just and fair compromise as an unsatisfactory fudge that pleases nobody. As things stand, there is no reason to think that the Facebook court proceedings will achieve a better outcome.
Given that the definitive arguments and contentions put forward by the 49 authorities and the outcomes of the year long investigations will in all probability be set out early on in the proceedings, it is quite likely that within a short period of time Facebook will have been provided with full details of its alleged wrongdoing. Therefore, there is no reason why negotiations could not commence early next year. However, the difficulty with the litigation-related concept of “negotiation” is that in practice it can descend to the lowest common namely a “horse trading” exercise and that the respective arguments and counter arguments will not be given a full airing.
At a time when a body of influential US mediators is lobbying government with a view to enshrining in law a USA-wide requirement for mediation (4), why could the 50 or so interested parties to these actions not agree to go to mediation, possibly overseen by the coordinating Attorney General? This would give all parties, not least Facebook, the opportunity to put forward their carefully considered arguments and negotiate not so much from a position of strength or weakness or as a position of being well informed and therefore better able to make sensible and realistic suggestions and counter suggestions.
It may be argued that it is not in the public interest for “private” mediation proceedings to ensue but confidentiality is much more likely to engender an outbreak of frankness and honesty and there is no apparent reason why agreed public/press briefings could not be released from time to time. One might reasonably expect that the courts would wish to be kept up to date and before giving approval they would have the power to very carefully construe any agreements.
Equally, any final agreements would in all probability be published and thereby become available for public scrutiny. If particular points of law were identified and it was considered that court rulings were required, with proper management there is no reason why properly prepared applications could not be made and decisions handed down quite quickly. Years of uncertainty would be reduced to a few weeks of uncertainty and perhaps very significantly, the sums of money, much of it public, expended through mediation would be considerably reduced.
 See the very interesting letter written by Richard Harvey published in The Times on 15/12/2020 in which in the context of the Brexit negotiations he identifies this very important point
 Very recent reports state that the State of Texas has now issued court proceedings
 APFM, NAFCM, MBB & ACR Co-Sponsor National Mediation Policy Act” an article in the influential US Journal Mediate.Com which includes the following extract –
Our recommended policy simply states:
“It is the policy of the United States that, when two or more individuals or entities are in protracted dispute, it is preferable that such disputants actively and voluntarily take part in solution-seeking mediation, rather than allowing the dispute to remain unresolved or result in costly litigation, continued conflict, and elevated risk of violence.”
Principal Director of ASM PLUS, civil/commercial, workplace, employment, family and educational mediator and trainer with a judicial/legal background. He has knowledge and expertise in dispute resolution in a wide range of areas and disciplines and mediates online.