Facts

On Dec. 22, 2008, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal by Judge A. Howard Matz of the U.S. District Court for the Central District of California of an antitrust case brought by LiveUniverse Inc. against MySpace.

PLAINTIFF'S CONTENTIONS:
LiveUniverse, which owns social networking website Vidilife.com, alleged that MySpace violated state and federal antitrust laws by disabling all "links" on Myspace.com to Vidilife.com and by blocking the functionality of Vidilife.com's video player on MySpace's website.

DEFENDANT'S CONTENTIONS:
Defendant contended that the complaint was properly dismissed because LiveUniverse had failed to allege sufficiently both exclusionary conduct and antitrust injury.

Result

Dismissal affirmed. The Ninth Circuit found that LiveUniverse failed to allege that there was a prior course of dealing between LiveUniverse and MySpace. As such, LiveUniverse could not show that MySpace had forsaken short-term profits to achieve an anticompetitive end. The court also found that LiveUniverse failed to allege antitrust injury because its allegations only pertained to actions by MySpace on its own website (i.e., disabling links to vidilife.com). The Ninth Circuit explained that such actions do not diminish consumers' choices or the quality of consumers' experiences on other social networking websites. As a result, such actions do not constitute antitrust injury.