Sheryl Sandberg, Facebook's COO, has never had to testify under oath about a major scandal but has 4 career-defining, very damaging matters hitting concurrently. *Allegations* involve #1 collusion (with Google), #2 insurrection, #3 cover-up of breach, #4 fraud. Here we go...
/1
#1 State AGs amended complaint vs Google was ordered filed mostly unsealed by tomorrow. And SDNY Court ruled last month two senior Facebook names involved in a market rigging allegation, a section one Sherman Act violation, can't be redacted. Sandberg is expected to be one. /2
#2 Facebook received subpoena today from Jan 6th Select Committee as it reportedly has avoided turning over requested info. Facebook also showed up as a tool in today's indictments of alleged seditious conspiracy. Sandberg previously minimized its role. /3
#3 a big, under-reported one. Cambridge Analytica cover-up appears to be unraveling. DC Superior Court ordered her boss's deposition and N District of Cal Court is winning key discovery around matter - all earlier this week with their top Gibson Dunn attorneys losing motions. /4
Digging in here a bit more. Discovery of Sandberg's documents according to the plaintiffs "will shed considerable additional light on the scandal." And we learned in documents being unsealed a bit more why they may. /5
If you recall when scandal broke, Facebook went dark for 5 days (3/16/18-3/21/18). This redaction is communications between Sandberg and cybersecurity firm (aka their auditors / clean-up crew) which apparently happened the same day Sandberg broke her silence (on CNBC). But... /6
Facebook lost motions to seal 2 firms' that worked for them including the one Sheryl was messaging immediately after scandal broke. Court ruled these messages are discoverable as they're not attorney-privileged or work product as FB planned audit regardless of lawsuits. So... /7
We don't what will be in this discovery but it involves a period where Facebook was dark, Sandberg was messaging a clean-up crew, those messages are discoverable and allegations she was "at the forefront of [their response] as she very much led monetization of user data. /8
Speaking of that business model, Facebook also lost a motion fighting discovery of the nearly 150 sources of data they have on each of the plaintiffs. First step is to describe each of these sources at a high-level and how they're used. This must be very uncomfortable for FB. /9
#4 Fraud. Over the holidays, a ton of evidence was unsealed in a N District of Cal case which added fraud allegations (knowledge of inflated potential reach metrics). The evidence is damning considering FB whistleblower also filed SEC complaint related to this matter. /10
If you want to go deeper on any of these, here is a thread on #1. Again, Google-Facebook collusion allegations should have some redactions removed tomorrow sometime on the docket. /11
here is a thread on #3 leading into a bunch of information on the Cambridge Analytica cover-up which is also the subject of massive shareholder suits, too, in Delaware. /12
And a thread on #4 including the documents which were unsealed over the holiday, they're quite something to read through carefully. I wouldn't be surprised if the SEC is digging into this complaint by the whistleblower at this point. /13
by the way, this is the first interview Sandberg did (with @JBoorstin) referenced in tweet 6. On the very same day, she was involved in messages with FB's clean-up firm reportedly booted out of Cambridge Analytica UK offices on March 19th by regulator. /14 cnbc.com/video/2018/03/…
I'll stop there, bracing for my mentions to be full of "lean in" quips... in all seriousness, back to my first tweet, these are significant issues and as far as anyone knows, she has never had to answer on any of them under oath. That's INSANE. /14
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There is a report going around Apple is going to facilitate blocking of ads in Safari - it deserves your attention. Meanwhile, I want to connect dots w/ a number of redactions lifted (yellow) late last night in the post-trial docs of US v Google - closing arguments are tmw. /1
It's critical to understand the importance of Safari to their Google deal under microscope. It's reasonable to say Safari delivers nearly 20% of Apple's Income from Ops almost entirely subsidized by Google. Without Safari, there is no Google deal. /2
As the expert witness in the trial pointed out, there isn't a rational explanation for a 40% revenue share on traffic that Google's proxies argue would happen without Apple. But hey, maybe that cash also pays for special influence into Safari's roadmap, too? /3
!!!!! just unsealed, and higher than prior news reports. /1
we learned last Fall in a different G lawsuit (NdCal) during widely reported testimony the number 36% as the share Google paid Apple to be locked in as default search across Apple's surfaces.
But now this was just unsealed from the two key contracts (here is 2014 which even then was 37.5%) /2
Whoa. Facebook had a secret "Project Ghostbusters" (get it?) which allegedly was to decrypt "man-in-the-middle" style Snapchat traffic to copy it. Yellow highlight indicates redactions just lifted in nine unsealed plaintiffs briefs in private antitrust lawsuit. Wild stuff. /1
A lot of new stuff. There was lots of reporting (including Apple threats to boot Facebook) at the time on Facebook's software and Onavo acquisition allowing it to "spy" on competitive apps but I recall the decryption was written as a hypothetical. CEO email kickstarting it. /2
You can read the press back in Jan 2019 spoon fed by Facebook PR to friendlies with no mentions of decrypting SSL then compare to this internal email below sent to Facebook's most senior executives - "currently includes SSL decryption"... /3
TikTok? Y’all are crazy. Yes, it’s a huge problem but hypocrisy. Last year after Facebook worked years to keep it sealed, a court unsealed its secret app audit. It showed 86,961 developers in China had access to all of our personal data…yet crickets. /1 storage.courtlistener.com/recap/gov.usco…
This is the same app audit Zuckerberg promised Congress after concerns American’s personal data had been readily mined in Russia. Throw in Iran, North Korea, you name it. Press didn’t dig in. A good source told me DOJ and Congress hadn’t ever even seen this forensic audit. /2
Yet Facebook had spent four years trying very hard to keep even the names of the forensic auditing / clean-up firms confidential. Senate Intel Chairs did send a letter, no word on whether Facebook even responded to them. /3
ok, I've now read the NYT response this week to attempts by OpenAI to dismiss NYT's landmark lawsuit against the high-flying AI company.
Put simply, NYT makes it brutally clear on page one how you can tell the difference between the two companies.
Oomph. /1
A few other observations from me. Like NYT's original complaint, it's smart and future-focused on fair value. Where OpenAI made frankly bizarre claims NYT was hacking the platform as it detected OpenAI had its content, NYT is right. OpenAI isn't and can't dispute it copied it. /2
Um, 2022 > 2020 = TRUE. Where OpenAI tried to inject a statute-of-limitations argument that OpenAI's lifting of content was "common knowledge" in 2020, NYT points out that ChatGPT and OpenAI didn't go viral until Nov 2022. /3
That's rich.
Microsoft's motion to dismiss NYT landmark lawsuit against MSFT/OpenAI. The most valuable company on the planet at 3 trillion claims the right to mine (aka 'harness') every work of journalism as part of its 'collaboration.' Comparing it to copying video tapes. 1/6
To be fair, MSFT, and its leadership, were testifying from Australia to US Congress on importance of a free and plural press and antitrust enforcement to support it just a few yrs ago. They genuinely seemed to care now Team Nadella has prioritized its OpenAI 'collaboration.' 2/6
I keep putting 'collaboration' in air quotes as it's an amusing attempt to reframe what is an investment worth tens of billions in which MSFT's CEO literally helped save the OpenAI CEO and company late last year. 'Collaboration' is a nice lawyer spin word for it. 3/6