Facebook faces another round of intense scrutiny worldwide after 7000 pages of confidential files originating from a lawsuit were published yesterday. These documents are not the ones the California Attorney General needs. Although, the company is also facing a court challenge requiring more documentation to be produced for an investigation amid allegations of stonewalling.
The heaps of leaked Documents, which directly refer to the company's dubious position for competition, are likely to be very useful to the many entities currently investigating Facebook on antitrust grounds. However, California is conducting a privacy investigation.
Attorney General Xavier Becerra went to court yesterday to get a lawsuit against Facebook enforcement. In the petition (PDF), Facebook claims not to respond to repeated subpoenas and other legal requests for information related to the Cambridge Analytica scandal.
Attorneys for 47 states have now signed a joint probe from Facebook ̵
Becerra at a press conference told reporters, "Today we publish this information because we have no choice." But he declined to provide details on any other aspect of this or other possible surveys on Facebook. However, he and all the other regulators and attorneys general can find something worth reading in Wednesday's leak.
The data dump
The 7,000 pages of leaked information come from a 2015 lawsuit brought against Facebook by a company called Six4Three.
Six4Three, long ago closed, basically ran an unimaginable app that scraped Facebook in search of images of women in bikinis. Facebook in 2014 changed the way a central API worked, effectively breaking the Six4Three app. The developer sued, alleged breach of contract and "fraudulent and anticompetitive schemes." And then things got weird.
UK regulators also conducted a probe into Facebook at that time. A Six4Three executive was brought into a meeting with an MP in November 2018, where he allegedly "panicked" and suddenly handed confidential files from the case, despite a warning from a California judge not to do so.
The suit itself got even stranger from there, but the cache of documentation took on some of its own life.
The documents have leaked in smaller chunks over the past year, revealing that Facebook is not just conducting extensive lobbying against privacy laws. EU, but also considered selling access to user data.
The full trove of files was finally leaked to British journalist Duncan Campbell who shared the files with NBC News and a handful of other outlets earlier this year. . Campbell and the news sites eventually gave out a lot to the audience yesterday.
The Juicy New Bits
The documents seem to confirm two long-standing, popular suspicious of Facebook. First, it treats users' privacy as an afterthought at best. And secondly, it works hard to prevent competitors from getting too strong.
Facebook in 2014 made significant changes to the way developers could access user information through their APIs. However, the company needed a way to sell such a big change, so it came with a story: privacy.
Internal communication reveals that Facebook finally tied the change to a revision of another product: Facebook Login. In a March 2013 email, a manager, Justin Osofsky, wrote that the story "will focus on quality and the user experience, which will potentially provide a good umbrella for folding in some of the API depreciation."
The connection between the two was almost exclusively for messages, further emails show. In an email in November 2013, Ilya Sukhar, Head of Developer Products until 2016, asked, "What does it really mean to link [the change] to log in besides synchronized timing? Are these just the messages? What is the crap you are referring to?"
"Mainly messages," replied another executive.
Sukhar later described the plan as a "switcharoo", and wrote in an email from February 2014:
Hi guys, I invited you all to a document describing the details of the "switcharoo" plan some of us have knocked around. I think it is a good compromise given all the limitations, and we will be able to tell a story that makes sense.
Killer contest before it hatches
Facebook manager emails in 2013 show that the company planned to split apps and services it does not own into one of three categories: current competition, potential future competition, or "developers who we have adjustments included on business models. "
A series of email exchanges from 2013 also discusses in detail the choices Facebook made to prohibit potential competitors from advertising on their apps. The question of who qualified as a competition – other than Google, which was taken as a given – was debated at length in the email thread.
Finally, business management seemed to settle with messenger apps that were more of a threat than other types of services.
"I think we should block WeChat, Cocoa and Line ads," company CEO Mark Zuckerberg wrote in an email from 2013. "These companies are trying to build social networks and replace us. The revenue is insignificant for us against any risk. I agree that we should use ads to promote our own products, but I still want to block companies that compete with our core in gaining some benefit from us. "
Another series of e The 2013 post shows how Facebook management handled new competition.
MessageMe, a message launch, was launched in 2013 and was acquired by Yahoo in 2014. Right out of the gate, Facebook management considered MessageMe to be too much of a competitive threat to give the company access to its data. But Facebook was very aware of how restrictive MessageMe access would look from the outside.
"During the first week after launch, MessageMe actually made no friends. Few conversations," Osofsky wrote. "However, MessageMe is now up to ~ 350K [monthly active users] and made 333K friend calls last week. We want to limit their access to friends. Get in shortly."
Osofsky added that the company would also "see if there are any other messenger apps that have hit the growth team's radar recently. In that case, we will restrict them at the same time to group this into a press cycle."
Companies in it however, the third bucket could make agreements with Facebook to secure access to user data again after the API change. Amazon, for example, was allowed it because it spent money advertising with Facebook.
Facebook is currently the target of at least half a dozen different antitrust probes. In the United States, the House Antitrust Subcommittee, the Federal Trade Commission, the Department of Justice, and 47 state attorneys conduct general investigations. European regulators are also working on their own competition cases against behemoth.
These probes do not just address the question of Facebook being a monopoly, which is what people associate with antitrust. Rather, they focus on what Facebook has done with its market power. In particular, using data is a company that Facebook collects from one arm of the business to prevent competitors from emerging to challenge other arms of the business, the kind of behavior that antitrust regulators get out their metaphorical magnifying glasses to investigate in depth.