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
I see new head of policy for Google and Facebook's main adtech trade group just filed his first public comments to FTC. They've used this stat for a long time to suggest surveillance ads are responsible for the free internet. I swear it gets sillier every time I read it. /1
In the same silly, they again claim "empirical evidence" pointing to research that 52% of ad revenue would go "poof" without the ability to track users around the net. Again, silly analysis. The spending wouldn't vanish but reallocate to private, user-acceptable ad formats. /2
And no it wouldn't shift to Google and Facebook if they also have to follow rules. Major regulator investigations already found a *majority* of Google and Facebook's data come from acting as third parties (exactly what is stopped by tracking prevention). /3
Big announcement from Google just now.
THIS is how press should provide context to any Google adtech announcement. Big ups to the WSJ reporters and editors who consistently call it straight. Let’s see how many other embargo’d reports do this. 1/2
Hat tip also deserved to NYT as their report is also strong and clear starting with the headline which I am certain Google absolutely hates but is accurate. This isn’t a way to block tracking but instead preserve it. ht @daiwaka@kateconger@bxchennytimes.com/2022/01/25/bus…
I wish more would say this part out loud:
Member of European Parliament after their successful vote to curb surveillance advertising, “I mean who believes Mark Zuckerberg anyway?” techcrunch.com/2022/01/20/mep…
Lol on surveillance-based advertising… “Google didn't respond to a request for comment. Meta directed inquiries to tech lobbying groups.” abcnews.go.com/International/…
Anyway, several interesting amendments curbing surveillance-based advertising passed Parliament so will now to go trilogue with momentum. And parallel legislation (DMA) has heightened limits on surveillance by the gatekeepers with the market power. Or so it should.
[thread incoming] Last week was bad for Facebook - lost motion to dismiss FTC breakup suit; subpoena from 1/6 cmte; ordered deposition of CEO in DC & sensitive discovery in NdCal from cover-up; COO and CEO exposed in Google antitrust suit.
BUT THAT WASN'T IT. Late Fri eve… /1
Court denied another Facebook attempt to dismiss an antitrust lawsuit - this one private and stands out for two reasons: 1) it's on behalf of both advertisers and consumers, 2) it includes both deceptive consumer data practices -and- the market rigging allegations with Google. /2
The case uses a very similar market definition as the FTC lawsuit which also moved forward last week. In this case, the Court was OK with "social media" as a market and "social networking" as a submarket of "social media" where Facebook has a monopoly. Thank you Sheryl. /3
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
Voila. Court order just posted requiring CEO Zuckerberg to FINALLY be deposed (Facebook paid $5B to FTC in 2019 to avoid this) along with Allison Hendrix who played point with Cambridge Analytica during the cover-up at issue in this lawsuit. Facebook will still fight this. 1/2
This is a problem for Facebook because there is emerging evidence in a parallel suit in NDCal that signals the timeline and cover-up could get super messy for FB leadership. Their out here is somehow fighting the deposition and shutting down discovery. 2/2
Anyway, DC AG office has been strong in this case, too, and they've begun to connect some key dots as they await decision to amend the complaint to name Mark Zuckerberg on it - again something the company resisted hard with FTC and SEC settlements. 3/2