Metroplex Communications, Inc. v. Meta Platforms, Inc.

Summary

The Seventh Circuit affirmed the denial of Meta's motion to compel arbitration of Metroplex's putative class action alleging that Meta inflated Facebook audience-reach metrics to lure advertisers away from competing platforms. Assuming without deciding that Metroplex is bound by the arbitration clause in the Facebook Commercial Terms accepted during its ad purchases, the court held de novo that Metroplex's unfair-competition claims—brought as a competitor for advertisers rather than as an ad purchaser—neither arise out of nor relate to its use of Meta's products and fall outside the clause's scope. Even a broad clause requires a sufficient nexus between the contract and the claim, and Meta's contrary reading would produce the absurd result of binding any past Facebook advertiser to arbitrate any claim touching Meta's ad business. The court also declined to apply a presumption in favor of arbitration, treating arbitration contracts like all others.