Oh dear, Facebook filed its motion to dismiss for the Delaware shareholder suit I called the "mother of all lawsuits" because it includes charges of insider trading and governance failures related to Cambridge Analytica cover-up. I still think it may bring Facebook down. /1
I find this amusing. In a number of places in its response to the court, Facebook argues there was a failure to allege "red flags." How would the board even know that there were "red flags????" /2
I mean subpoenas from state AGs all over the country, the Federal Trade Commission and international governments wouldn't necessarily indicate anything, right? /3
I mean just the mere fact the FTC was investigating Facebook doesn't mean the board knew Facebook violated its consent order with the FTC, right? /3
speaking of "red flags," by golly that's exactly the term the SEC used when it did its stealth settlement with Facebook the same day they paid off the FTC $5 billion so Zuckerberg wouldn't be exposed to discovery and deposition around the cover-up, the very basis of this suit. /4
about that $5 billion, it's mere pocket change - a "fraction" - compared to what Facebook states the FTC originally wanted despite being many billions more than other prior FTC settlement. So don't worry about the cover-up, respect the deal it received. /5
and certainly don't worry about the insider trading allegations for 80mil shares of stock during the cover-up because that may seem like billions to us mortals, it's a rounding error to a CEO that controls all the stock, board and desperately wanted to avoid deposition. /6
and in the category of normal, misleading statements by Facebook, for the thousandth time, there was no legal certification with Cambridge Analytica. It was a flimsy one-page letter with no legal value 15 months later in 2017 after more press reports surfaced scaring them. /7
and this seems like bad lawyering by Gibson Dunn (who must be making a killing off all of these cases). They make a point the whitelisted apps that had data for another 3+ years had already ceased at the time of NYT's report but earlier noted a few hadn't. Slippery at best. /7
On the probably irrelevant arguments, apparently Mark Zuckerberg has no "emotional depth" in his relationship to his board member and at least one-time friend, Houston. That must hurt some feelings. /8
and I don't think this reads as well as Facebook's law firm intended for it to read. /9
ok, I'll stop there. Here is the thread of the original lawsuit which is much more important to understand than Facebook's motion to dismiss. I'll keep you posted, this is a big one. /10
woah. a deeply concerning internal Google doc just unsealed in US DOJ vs Google (adtech antitrust trial seven weeks from now).
Smells like bid rigging.
Translation (by me):
Red = bad for Google
Green = good for G
'Levels playing field' = helps G
'fairer competition' = helps G /1
at the very least, demonstrates the conflict of interest with having significant market power on both sides. here is a Google doc roadmapping these changes to their auctions from the buy-side and the sell-side ahead of analyzing the impact and mitigating outcry. /2
for example, here is what looks to be Google analyzing what would happen to their biz when they removed "Last Look" which gave Google a significant advantage after an ad auction had been run. Don't miss the Green at bottom. /3
more news yesterday in flurry of activity in lawsuit vs Facebook for (over)paying FTC $5B to protect Zuckerberg. Big names involved. Board records inspection shows who's who in 'approval' - everyone now gone except Zuckerberg, Andresseen and Alford. Gets interesting quickly... /1
Yes, Andreessen joined Thiel in politics with full-throated endorsement of Trump with close allies. Alford was CFO of Chan Zuckerberg right before approval. WSJ reported Chenault and Zients (important: now Biden's chief of staff) stepped down over disagreements with Mark Z. /2
So what's happening. Well, first in April 2024 all of these prior and current board members were served in the lawsuit. Again, this is based on a prior records inspection of non-privileged board documents and the Court at that point deciding to allow the case to move forward. /3
Friday night KA-boom. In adtech antitrust lawsuit against Google, court has ordered the state AGs may depose Google co-founder Sergey Brin and CEO Sundar Pichai. Huge. /1
So the two cited reasons Pichai will be deposed (although not all of them) are incredibly sensitive. 1), “Jedi Blue,” the alleged collusion with Facebook that everyone wrongly wrote off back earlier in this lawsuit. Google CEO Pichai met directly with Facebook CEO Zuckerberg. /2
A reminder the Google and Facebook deal (aka the “NBA” or “Jedi Blue”) is also in a private antitrust suit against Facebook. The deal was signed by the lieutenants of the CEOs (Sheryl Sandberg for Facebook). /3
US v Google flooded docket (103 filings!) over weekend as Court said Friday...hey now, let's skip summary judgment, this baby is going to trial. Much is companies trying to keep their secrets sealed but we get a sense for the witnesses. And a small taste of evidence to come. /1
On the companies filing to keep their secrets sealed which they mostly provided under subpoena, it's a mix of adtech, agencies, platforms, you name it. /2
We also learn some glossary items which likely come up:
'RASTA' - Google's tool to evaluate new 'launches' (aka changes) in ad serving system, runs on live traffic
'Ariane' - identifies and summarized launches
'Launch' - creative name (lol), it replaced Ariane in 2020/2021 /3
SCOTUS just posted order list. It granted cert to Facebook on its Cambridge Analytica matter. Only first question but that’s a huge one. Basically should Facebook have disclosed to shareholders what it started to cover up in 2015 rather than presenting risk as hypothetical? /1
Here is the actual first question as written. One immediate item, it’s outrageous if Justice Kavanaugh didn’t/doesn’t recuse seeing his reported best friend, Joel Kaplan, was directly involved in the matter and its cover up. He threw his SCOTUS confirmation party IIRC. /2
Here is a link into background. I strongly urge press not to overlook this or assume you know fact history. Over the years much has played out in coverup and much of the reporting has been bent towards Facebook’s spin. I am more than happy to point you to the court records. /3
“X has lost dozens of major advertisers under Musk’s ownership, with 74 out of the top 100 U.S. advertisers from that month no longer spending on the platform as of May.” 1/4
Smart NBC report focusing on amplification, velocity and reach, “X isn’t living up to its own policies when it allows violent extremists to use the platform’s amplification features.” 2/4
“It’s not clear to what extent people at X were aware that the company was monetizing the extremist hashtags prior to NBC News’ reporting.” 3/4