A US congressional committee has requested a trove of internal Facebook documents that the company’s critics say will demonstrate how the social media giant unfairly leveraged its market dominance to crush or absorb competitors.
The request by the House Judiciary Committee comes amid a flurry of new antitrust investigations of technology giants, including ones by the Federal Trade Commission and state attorneys general. At issue here is a cache of internal Facebook documents unearthed in a case brought by Six4Three, a defunct start-up whose founders have waged a bitter four-year legal battle with the social network.
In a nine-page September 13 letter obtained by The Associated Press, the House committee requested all substantive filings from Six4Threes lawsuit. That would include thousands of pages of internal Facebook documents and emails, some authored by CEO Mark Zuckerberg, that were ordered sealed by a California judge.
One developer still active in Silicon Valley said multiple Facebook executives told him they would make his life a living hell if he sued
The Wall Street Journal recently reported that the House committee made document requests to dozens of smaller companies that compete with Facebook, Google, Amazon and Apple.
Six4Three, however, could offer unique insights into Facebook’s behaviour, as its documents provide an inside view of executive deliberations and decisions that might be viewed as anticompetitive conduct. Some antitrust investigators have already cited them as potentially important evidence in probes of the company.
Several hundred pages of the documents became public in late 2018 after British lawmakers ordered Six4Three managing director Ted Kramer to turn over much of the trove while he was visiting the UK. Others were leaked to British journalist Duncan Campbell and shared with the AP and NBC.
Kramer and his founding investor, Thomas Scaramellino, allege that Facebook deceived and then crushed their start-up and thousands of others by abruptly shutting down access to user data essential to their businesses.
Documents unearthed in the Six4Three case suggest that Facebook separately targeted specific outside apps for cut-off because they competed with Facebooks own core services, particularly messaging and photo/video sharing. One was the now-shuttered MessageMe, which has also received a document request from the House committee, according to its former CEO, Arjun Sethi.
Facebook publicly minimised the scope of its data access shift, describing it as minor changes necessary to protect user privacy. But the effect, its critics charge, was to let the social giant pick winners and losers among companies whose existence depended on Facebook user data.Facebook denies the allegations and otherwise declines to discuss the case, the documents or their wider implications. In a statement, the company’s deputy general counsel, Paul Grewal, said Six4Three continues to mischaracterise documents and testimony in the service of meritless claims.
Grewal also stated that the company acted to protect user privacy: we stand by our decision to limit the data that apps can access and protect people’s information.
The UK parliamentary committee, which requested the documents as part of a broader inquiry into misinformation on social networks, published key emails and presentations from the Six4Three trove. It said companies like Facebook should not be allowed to act like digital gangsters in deciding whether other businesses succeed or fail.
It also rejected Facebooks privacy explanation for the change, noting that the company continued to share and sometimes over share user data with favoured partners who spent heavily on Facebook’s ad network and posed little competitive threat.The start-ups lawsuit, however, has not gone well for Kramer and Scaramellino. Facebook, one of the largest companies in the world, launched a withering legal counterattack that, among other things, forced the plaintiffs’ trial attorneys to quit the case.The trial judge also allowed a forensics firm that has previously worked for Facebook to collect 15 years of sensitive electronic records from the entrepreneurs, including email exchanges with journalists and antitrust investigators. Facebooks lawyers justified the intense scrutiny by alleging a conspiracy to leak the sealed documents.
Kramer and Scaramellino could also face potentially ruinous legal fees should the state court in San Mateo, California, order them to pay legal costs for Facebook and executives, including Zuckerberg, listed as defendants.
The message is, if you go after Facebook, you are done, Kramer said in a recent interview.After suing in April 2015, Kramer and Scaramellino could find no willing co-plaintiffs among the 35,000 or so start-ups the documents indicate were affected. Four developers they contacted told the AP that while they supported Six4Three, they lacked stomach for the fight or feared being blacklisted. Afraid of retribution from Facebook or its allies, they asked not to be identified.
One developer still active in Silicon Valley said multiple Facebook executives told him they would make his life a living hell if he sued. Others have moved on to other endeavours, some with financial backing from Facebook.
Published in Dawn, The Business and Finance Weekly, October 7th, 2019