Several years after Facebook owner Meta acquired WhatsApp and Instagram, the Federal Trade Commission filed an antitrust lawsuit claiming that through these acquisitions Meta had become a monopoly. A titan who wields a huge fortune over smaller companies, the FTC said Meta began buying or burying competitors in efforts that would have prevented rivals from offering better quality products to consumers. In this outsized role, Meta stopped evolving consumer preferences for features like more privacy options and greater data protection from becoming the norm, the FTC said. The only solution the FTC could see? Ask a federal court to help them dismantle Meta and undo the damage the FTC did not anticipate when it initially approved Meta’s acquisitions.
To investigate whether Meta truly possesses monopoly power, both Meta and the FTC have sued more than 100 Meta competitors each. Both hope to clearly define in court how Meta dominates the market and how negatively this affects its competitors.
Through 132 citations so far, Meta is on a mission to defend itself, claiming it needs to collect confidential trade secrets from its major competitors, not to leverage that knowledge and increase its market share, but to prove in court that other companies can compete with. Half. According to court documents, Meta is so hungry for this background on its competitors, it says it plans to sue more than 100 additional rivals, if necessary, to overcome the FTC’s claims.
Meta asks its competitors for a wide range of information, from their best performing characteristics to the names of their largest advertisers. He wants to see all the commercial revenue, which for his competitors are apparently turning antitrust litigation into a business opportunity for Meta to find out exactly how other companies attract users, scale products, and measure success.
Among the rivals already sued are Twitter, the owner of TikTok ByteDance, Reddit, Pinterest, LinkedIn and Snap. However, more requests may be made in the coming years, before the discovery for both sides ends on January 5, 2024.
Snap, others oppose quotations that are “too broad”.
Unsurprisingly, no one wants to hand over confidential trade secrets to Meta. And since the only competitor the FTC named in the antitrust litigation was Snap, Bloomberg reports that Snap has become one of the most vocal opponents of Meta’s “overly broad” citations.
In a court document, Snap’s attorneys said that what Meta actually wanted was access to Snap’s “competitive playbook,” looking for “materials on every product and nearly every aspect of Snap’s business, with a range of time that encompasses almost the entire existence of Snap “.
“This is exactly the kind of information Meta would use to further harm Snap competitively,” Snap’s attorneys said.
Meta said the FTC sought similar information from Snap, but Snap said the FTC’s requests were “much narrower”.
Snap’s main concern is that Meta has a history of duplicating the features of rival products, including its controversial new feature that dominates its Facebook and Instagram feeds, TikTok-like videos called Reels. Both Snap and ByteDance responded to the citations by asking Meta to limit the scope of required documents and prevent Meta’s internal lawyer from accessing any documents containing sensitive trade secrets, which could then apparently be shared with Meta employees. Court documents show that Snap withheld “the vast majority of the documents requested by Meta” and Meta rejected Snap’s offers to share confidential business information only with Meta’s outside attorney.
For Snap, the quote would be easier to swallow if it knew Meta couldn’t act based on the shared information. Meta responded to the outside attorney’s request by noting that the court had already rejected “Snap’s own request” and reiterating that its internal lawyer “is not involved in the competitive decision-making process”.
Snap did not immediately respond to Ars’ request for comment.
Today, Bloomberg reported that a California federal court will decide roughly how many documents and, therefore, how many trade secrets Snap should reveal to help Meta build its defense against the FTC.
Snap hopes the court will “quash the subpoena in its entirety”, in part because the request is “extremely excessive and unduly burdensome.” Snap says Meta is asking Snap “to reconstruct virtually every decision Snap made.” They also say that Meta has not demonstrated a “substantial need” to justify “all the confidential business information that he requests”. Instead, they accuse Meta of “canceling fishing expeditions” with requests for “irrelevant” documents, such as searching for information about the FTC investigation into Snap’s disappearance messages feature.
Meta wants the court to order Snap to produce all required documents, in part because it claims such a large request “is common and appropriate in large antitrust cases.” He further states that Snap “is not a truly disinterested party” in antitrust litigation and that the delays in producing documents were “designed to undermine Meta’s defense.” As Bloomberg reports, as legal challenges to Meta citations by other social media companies increase, a Meta spokesperson told Ars that all of these competitors who oppose compliance with citations seem to somehow support Meta’s claims. according to which the sector remains competitive despite Meta’s ownership of Facebook, WhatsApp and Instagram.
“Meta competes vigorously with many companies to help people share, connect, communicate or just be entertained,” Meta spokesperson Christopher Sgro told Bloomberg and Ars. “As a natural step in preparing our defense of the FTC lawsuit, we have filed subpoenas with companies that we compete with or that we believe have other information relating to the FTC allegations.”