Intellectual Property Law

LiveUniverse v. MySpace - Refusal to Deal Not a Sherman Act Violation

By Lee.Gesmer

In an interesting “refusal to deal” antitrust case from the 9th Circuit, the court held that exclusionary conduct by MySpace.com, directed at another social networking site, Vidilife.com, did not constitute monopolization under the federal anttrust laws.

Both MySpace.com and Vidilife.com are “social networking” websites.  MySpace is well known, Vidilife site less so.

Vidilife.com, owned by LiveUniverse, Inc., allows users to post videos on its site.  Some of those users embedded their videos in their MySpace web pages (a comon practice on social networking sites).  MySpace deleted the videos and references to Vidilife.com. LiveUniverse sued in federal district court in California, charging MySpace with attempted monopolization and monopolization under the federal antitrust laws.

The district court found that MySpace.com’s actions did not consitute an illegal “refusal to deal,” and the 9th Circuit upheld this rulng.

There is some backstory to this case.  LiveUniverse’s CEO, Brad Greenspan, is the the former CEO of eUniverse/Intermix–the company that sold MySpace to News Corp in 2005 for a half-billion dollars.  Apparently, there is some bad blood between Greenspan and MySpace.com left over from that transaction, suggesting that MySpace.com may have been acting from personal motives.

• District Court Decision (pdf)
• 9th Circuit Decision (scribd) (nonprecedential decision)

Full post as published by Mass Law Blog on January 19, 2009 (boomark / email).