FTC and Meta clash in federal court over discovery dispute

Mark Zuckerberg at the Munich Security Conference (MSC) 2020

Just under a week ago, the Federal Trade Commission reported that Facebook’s parent company Meta made a “shocking” admission that half of its claims for privileges from a sample were “unfounded.”

The revelation prompted a federal judge to take action Monday afternoon, ordering Meta’s attorneys to analyze a sample of 2,500 privilege claim entries by the end of January.

Contrary to how Meta’s attorneys characterized the motion as “inappropriate” and “incriminating,” the U.S. District Judge said James Boasberg called the FTC’s proposal “reasonable” in a conference call. He declined to accept Meta’s position that the privilege provisions should remain in place to stay on track until the upcoming discovery date of January 5, 2023.

“It just seems premature to me to say, ‘It doesn’t matter what you find. That’s the end of the road, right?” said Boasberg.

The judge’s verbal decision during a brief conference call Monday gives regulators another opportunity to unearth a large batch of documents they believe Meta “wrongly” withheld.

“The FTC is deeply concerned by evidence that Meta is improperly withholding tens of thousands of documentary evidence based on unsubstantiated privilege.” Daniel Mathesonfrom the Competitions Office of the FTC, wrote in a five-page filing on November 23.

Almost two years ago, the FTC sued Facebook, accusing the Silicon Valley giant of running a “monopoly.” Judge Boasberg advanced the lawsuit earlier this year, and Meta became the sole defendant shortly after the case was uncovered.

The FTC found that its request for Meta to review 2,500 privilege records related to key witnesses accounted for less than 1 percent of the company’s privilege claims.

Meta’s attorney Geoffrey M. Klineberg complained that the regulators do not bear any mutual burden.

“This is a completely unilateral effort,” Klineberg said during the hearing.

In his written file from last week, he has wrote: “This kind of last-minute, unspecified, lump sum claim is totally unreasonable, and the court should flatly reject it.”

He also noted that the request falls during the holiday season.

“The FTC’s requirement that Meta expedite the re-examination of 2,500 log entries during the winter vacation is also unreasonable because it is disproportionate and unduly onerous,” the filing reads.

Boasberg met the company’s lawyers midway, allowing for a more relaxed timeline than the FTC’s proposed Jan. 9, 2023 completion deadline. He said Meta can review the first half by the end of December and the second half by the end of January.

The FTC’s antitrust claims against Facebook are twofold. Regulators say Facebook has increased competition for personal social networking services by acquiring rivals and potential competitors like Instagram and WhatsApp. They also allege that Facebook implemented policies preventing it from working with other apps that the company saw as an emerging threat.

Boasberg had dismissed an earlier version of the lawsuit before the FTC amended the lawsuit. This second iteration apparently passed the judge’s scrutiny, prompting him to present his ruling in favor of the FTC with the quip: “Lucky the second time?”

“The core theory of the lawsuit remains essentially unchanged,” the judge noted in the ruling earlier this year, but added that the FTC fleshed out its complaint by asserting facts that were “far more robust and detailed” than its earlier iteration .

(Photo by Johannes Simon/Getty Images)

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