James P. Beaubien

School districts are alleging that Meta clamped down on internal research showing that the mental health of young users suffered from compulsive use of its social media platforms, even as staff likened themselves to drug pushers. The schools said Friday that Meta and other social media companies knew students were hooked on their platforms, to the detriment of their mental health and with widespread effects on education. Meta researchers said that "we're basically pushers," that "Instagram is addictive" and that time spent on the platform is "having a negative impact on mental health," according to the school districts' unredacted filing. "What Meta knew — and what it failed to reveal — should shock the conscience," the school districts said. "Internal studies conducted by Meta, both qualitative and quantitative, repeatedly confirmed that Instagram and Facebook use could lead to a panoply of negative outcomes for teens, including addiction, sleep disruption, anxiety, depression, negative appearance comparison and body image problems." A chat between two user experience researchers excerpted in the brief said: "We're basically pushers" and "the top-down directives drive it all towards making sure people keep coming back for more. That would be fine if [it's] productive but most of the time it isn't. … The majority is just mindless scrolling and ads." The brief is part of an MDL involving personal injury plaintiffs, schools and attorneys general who claim that Meta Platforms Inc., YouTube LLC and other social media giants design their multibillion-dollar revenue-generating social media platforms to be addictive, to the detriment of minors' health and livelihoods. "Like tobacco, this is a situation where there are dangerous products marketed to kids," plaintiffs co-lead counsel Previn Warren of Motley Rice LLC said in a statement. A Meta spokesperson told Law360 that the allegations rely on "cherry-picked quotes and misinformed opinions." "The full record will show that for over a decade, we have listened to parents, researched issues that matter most, and made real changes to protect teens — like introducing Teen Accounts with built-in protections and providing parents with controls to manage their teens' experiences," the spokesperson said. "We're proud of the progress we've made, and we stand by our record." Regarding the internal study, the Meta spokesperson said on Bluesky over the weekend that it found that those who believed Facebook was bad for them stopped using it — which makes intuitive sense but doesn't show anything about the actual effects of using the platform. "Meta researchers were concerned about this going in. They spent months trying to design a study with the specific goal of overcoming what are called 'expectation effects,' the idea that beliefs and expectations influence perception," the spokesperson posted. "A pilot of the study ran. Researchers analyzed the results and found the study didn't overcome those expectation effects." One of Meta's internal studies was an experiment started in late 2019, dubbed Project Mercury, that asked random users to stop using Facebook and Instagram for a period to see how they fared compared to those who kept using the platforms, according to the brief. An employee of Meta said: "if the results are bad and we don't publish and they leak, is it going to look like tobacco companies doing research and knowing cigs were bad and then keeping that info to themselves? I went … oh." Which is what Meta did, the schools said. The pilot results confirmed that people who stopped using Facebook for a week had lower feelings of depression and anxiety. But rather than conducting more research, or raising an alarm about the findings, Meta put a stop to the project on the grounds that participants' feedback was tainted by outside media narratives, according to the brief. "Meta never publicly acknowledged these findings from its own in-house addiction specialists. Instead— just weeks later — Mark Zuckerberg testified before Congress and denied that Meta profits from creating addictive products." Meta's top brass knew in 2015 that use among young people had started to decline, and the company chose to sacrifice safety to recapture that profitable audience in line with its motto "Move Fast and Break Things," the schools said. For example, Zuckerberg directed employees to take part in a "lockdown sprint" to launch the Facebook Live feature, intentionally leaving out parental and teacher safeguards. Zuckerberg warned that telling adults "will probably ruin the product from the start," according to the brief. Concerningly, Meta learned that teens were using Live to broadcast suicides and attempts, which it did nothing to prevent or warn about prior to its launch, the schools said. "As one former Meta VP conceded, 'it was a growth imperative to make Live Video a product and release it, as opposed to slowing down and really trying to think through all the negative ways it could be used,'" the brief said. One longitudinal study of teenagers over the course of a school year tracked their attentiveness — in other words, their habitual or unintended use — while using Instagram and their perceived ability to control their use, according to their brief. Early results showed just over a third of the teens had low attentiveness while using Instagram, the school districts said. The study also found that parents and family were not responsible for the problem, according to the brief. The results of this study were also never disclosed, the school districts said. And Meta has also lied about its "zero tolerance" approach to child sexual abuse material on its platforms, the schools said. It has three AI tools to detect violations of its CSAM policies. But even if a photo or video is determined with 100% confidence that it violates the policies, that content is not automatically removed, the districts said. Internal documents show that child safety is not a Meta priority, the schools said, pointing to quotes such as: "Child Safety is explicitly called out as a non-goal in our H2 plans." According to its second quarter report, Meta took action on five million pieces of child sexual exploitation content, nearly all of which was found before users reported it. Content goes through human review after being flagged by AI tools before being sent to the National Center for Missing and Exploited Children. In 2021, ex-Facebook employee Frances Haugen famously testified before a Senate panel about Facebook's hidden internal research on the harms of social media on both children and adults. "But behind closed doors, Mr. Zuckerberg was texting confidants, 'I'm not going to say [child safety] is my personal main focus when I have a number of other areas I'm more focused on like building the metaverse,'" the brief said. The personal injury plaintiffs and school district plaintiffs are represented by Lexi J. Hazam of Lieff Cabraser Heimann & Bernstein LLP and Previn Warren of Motley Rice LLC. Meta is represented by Ashley Margaret Simonsen and Paul William Schmidt of Covington & Burling LLP and James P. Rouhandeh of Davis Polk & Wardwell LLP. The MDL is In re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, case number 4:22-md-03047, in the U.S. District Court for the Northern District of California.

Nov 24

5 min

After the first meeting of the Senate Judiciary Committee in five months on Monday, a veteran attorney and municipal court judge in Middlesex County is now one step closer to a spot on the Superior Court of New Jersey bench. Gov. Phil Murphy’s nomination of James P. Hoebich, the current chief municipal court judge for Metuchen, New Brunswick and Piscataway, was unanimously approved by the committee and will now advance to a vote at a full session of the Senate on Dec. 18. If eventually given final approval, Hoebich would succeed retiring Middlesex County Superior Court Judge Barbara C. Stolte. Hoebich thanked the committee in his remarks, and expressed his gratitude to a considerable number of individuals, including the governor and First Lady Tammy Murphy, for taking an interest in his application to serve on the Superior Court, in addition to fellow judges, family members, friends and professional colleagues. Sen. Bob Smith, a member of the committee, referenced Hoebich’s long tenure of service. “As has been the past practice of when lawyers are nominated to be judges from Middlesex County, we do an extensive review of their background, etc. Well, in this case, we really didn’t have to do it in Middlesex, because Jim Hoebich has been in numerous positions, not only in our county, but everywhere,” Smith said. Smith said that normally he doesn’t receive telephone calls from lawyers endorsing candidates to be judges, but that in Hoebich’s case, several Middlesex County attorneys called to tell him that “the judiciary will really be enhanced by the addition of Jim Hoebich.” Sen. Michael L. Testa Jr., another member of the committee, also praised Hoebich’s service as a municipal court judge and explained that his own grandfather held the same position, before ascending to the Superior Court. “I just really appreciate the fact that you’ve risen through the ranks and have such a diverse practice area, but particularly the fact that you have sat in a number of municipal courts. It means that you’re going to have a fantastic demeanor,” Testa said. After a roll call vote, Hoebich’s nomination was approved to advance. Prior to his 11-year-long tenure as a municipal court judge in Middlesex County, Hoebich was a graduate of St. John’s University School of Law and specialized in practicing municipal law. A former partner with Cahill Branciforte & Hoebich in New Brunswick, he left that firm to establish his own practice. Judicial vacancy rates have been a challenge in the Garden State since the start of the COVID-19 pandemic, which impacted the state’s backlog to fill those positions. At one point, a crisis level was reached with well over 70 vacancies, but even with those numbers having decreased, the mission to keep vacancy levels down continues. In February, there were 42 vacancies on the bench in New Jersey. The total number of Superior Court vacancies statewide stands at 44, according to data provided last week by New Jersey court administrators. In October, 10 candidates were nominated to the bench, and four additional nominees were recently identified. These more recent nominations joined nine others that have been pending since June. In addition, the governor filed notices of intent to nominate two additional candidates on Nov. 24. If these 25 candidates are confirmed, the total number of judicial vacancies would be reduced to 19. Administrative Office of the Courts director Judge Michael J. Blee said earlier this year that he would be comfortable with about 25 vacancies in state courts at one time. His office declined to comment last week about the additional nominations. If the 25 candidates are confirmed, the total number of judicial vacancies would be reduced to 19. Vacancies in Camden County would be down to five, Union County would stand at four, Essex County would be down to three, Monmouth and Passaic counties would each have two vacancies, both Bergen and Ocean counties would each have one vacancy, and Burlington, Mercer, Middlesex and Somerset counties would have no vacancies. Meanwhile, there are currently no vacancies in Cape May, Cumberland, Gloucester, Hudson, Hunterdon, Morris, Salem and Warren counties. In addition to Hoebich’s nomination advancing, the following sitting Superior Court judges were approved for a vote on reappointment at the next full session meeting of the Senate on Dec. 18: Michael N. Beukas, Bergen County; Peter G. Geiger, Bergen County; Jaclyn Medina, Bergen County; Nina C. Remson, Bergen County; Philip J. Degnan, Essex County; Eric G. Fikry, Burlington County; Lisa James-Beavers, Burlington County; Joseph A. Levin, Atlantic County; Benjamin D. Morgan, Gloucester County; Mark B. Shoemaker, Gloucester County.

Dec 1

3 min

A federal antitrust campaign against major technology platforms suffered a significant blow Tuesday with a D.C. federal judge's rejection of a Federal Trade Commission suit accusing Meta Platforms of illegally monopolizing social media through its purchases of WhatsApp and Instagram. A D.C. federal judge's ruling in favor of Meta represents the first loss on the merits for antitrust enforcers pursuing a string of monopolization cases against Big Tech. (Photo by Klaudia Radecka/NurPhoto via AP) U.S. District Judge James E. Boasberg didn't let the FTC get past the threshold question of whether the Facebook successor has a monopoly, finding that Meta Platforms Inc. competes widely in a crowded field of social media companies, a field he said has been heavily redrawn in recent years, especially by TikTok. "With apps surging and receding, chasing one craze and moving on from others, and adding new features with each passing year, the FTC has understandably struggled to fix the boundaries of Meta's product market. Even so, it continues to insist that Meta competes with the same old rivals it has for the last decade, that the company holds a monopoly among that small set, and that it maintained that monopoly through anticompetitive acquisitions," Judge Boasberg said. "Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The court's verdict today determines that the FTC has not done so." Judge Boasberg rejected FTC efforts to paint Meta into a narrow corner for personal social networking connecting friends and family, a field where it says Meta's only competitors are Snap and MeWe, while excluding TikTok and other social media companies. "While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down," Judge Boasberg said in the 89-page ruling. Meta welcomed the decision and its recognition that the company "faces fierce competition." "Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the administration and to invest in America," a Meta spokesperson said in a statement. The company did not immediately respond to a follow-up question asking if the reference to the Trump administration is an attempt to curry favor and avoid an appeal. The FTC turned more explicitly to politics in its own statement, referencing the push by Republican lawmakers to impeach Judge Boasberg, driven by ire over his orders against Alien Enemies Act deportations and on subpoenas for the records of GOP lawmakers as part of the investigation into Trump's alleged efforts to overturn the 2020 election. "We are deeply disappointed in this decision. The deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment. We are reviewing all our options," FTC spokesperson Joseph Simonson said in a statement. FTC Chairman Andrew Ferguson has previously voiced full-throated support for the litigation. The ruling represents the first loss on the merits for antitrust enforcers pursuing a string of monopolization cases against Big Tech. The U.S. Department of Justice has so far won both its cases targeting Google's search and advertising placement technology businesses. Google is expected to appeal the search case, where it managed to avoid the DOJ's most sweeping remedies, and it is expected to similarly contest its ad tech loss after the Virginia federal judge imposes remedies. In the wings is a DOJ case against Apple and an FTC case against Amazon.com Inc. And an aggressive posture adopted by antitrust enforcers during the first Trump administration has materialized in an array of other major cases against the likes of Live Nation, Visa, RealPage, Agri Stats, John Deere, Southern Glazer's Wine and Spirits LLC and pesticide giants Syngenta and Corteva. The FTC case against Meta was the second to be filed in the new wave of monopolization lawsuits that followed a roughly two-decade hiatus in enforcer actions brought under Section 2 of the Sherman Act. Filed in December 2020, two months after the DOJ targeted Google search, the FTC suit accused Meta of buying Instagram in 2012 and WhatsApp in 2014 in order to head off direct competition with Facebook. According to the FTC, Meta feared the juggernauts the companies would become. It allegedly worried WhatsApp would expand from its messaging app roots into a direct rival to Facebook, and the social media giant allegedly deliberately stifled the growth of both companies to keep them from cannibalizing Facebook. But because his decision came down entirely to market definition, in a market where both sides agree WhatsApp does not now compete, Judge Boasberg said Tuesday that "WhatsApp is not relevant to what follows and will now disappear from the case." To try to prove that case, the FTC spent six weeks in the spring of 2025 questioning a series of Meta executives, starting with CEO Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, alongside expert witnesses and representatives of social media companies. The agency's main goal was to show that sharing with friends and family remains a prime use case for Facebook, Instagram and WhatsApp, one that distinguishes the Meta apps from ostensibly more entertainment-focused social media companies like TikTok, YouTube and X Corp. From there, the agency tried to show that Meta deliberately stifled its properties. But Judge Boasberg noted that the time users spend on friends and family content has declined precipitously over the years, down to 17% for Facebook and 7% for Instagram, meaning "friends' content has withdrawn from the main feature to a smaller ingredient in a blend." That content has been replaced by short-form videos, the judge said, pointing in particular to Meta's Reels feature, where content is based entirely on "unconnected" accounts that users haven't friended or followed. "The FTC contends that Facebook, Instagram, and Snapchat form a distinct market that can be identified by those apps' unique features. While those apps certainly show some distinct markings, they mostly resemble two other social-media apps that the FTC insists must be excluded: TikTok and YouTube," he said. "Their dominant features are identical, people mostly use all four to watch unconnected content that they can send in direct messages, industry participants agree that the apps belong in the same competitive market, they use similar resources and technologies, and they charge the same [free] price to the same customers." A key FTC witness was New York University School of Law professor C. Scott Hemphill. But Judge Boasberg said Tuesday that it "seems unlikely" the agency's lead economics expert "could have approached his task with an open mind," given his lobbying for antitrust enforcers to pursue Meta in the first place. "Once Hemphill was brought on, the court doubts that he weighed the evidence objectively. Instead, it was almost as if the FTC had put one of its own lawyers on the stand," Judge Boasberg said. The judge nevertheless did not reject Hemphill's testimony outright. Instead, he said Hemphill's opinions "do not persuade on the merits." Meta had argued at trial that it's done nothing to shortchange the apps but instead gave them the resources they needed to grow to the powerhouses they are today. And it repeatedly argued that Meta, TikTok and YouTube all see one another as rivals and competitive constraints. Judge Boasberg agreed, concluding that TikTok "put enormous competitive pressure on Meta" soon after its U.S. launch in 2018, including by driving the addition of Reels on Facebook and Instagram, "copying TikTok to keep users on Meta's apps." Judge Boasberg also referenced the "convergence" of Meta, TikTok and YouTube as they met somewhere in the middle between entertainment and connecting with friends and family, with mobile apps that look virtually identical and provide virtually identical sharing options. "The possibilities opened by technology, the responses by users, and the competitive choices of the apps have combined to push Facebook, Instagram, TikTok, and YouTube into similar social-media experiences," he said. In rejecting the FTC's claims of monopoly, and thus short-circuiting an effort to force the divestiture of WhatsApp and Instagram, Judge Boasberg also rejected the FTC's bid to argue it doesn't matter if Meta has a monopoly right now. Where the FTC had argued in its post-trial briefing that it can seek an injunction as long as Meta violated the law in the past and that violation continues to harm competition, Judge Boasberg said the FTC Act only allows the agency to pursue "current or imminent legal violation." Judge Boasberg additionally rejected FTC claims of direct evidence of monopoly based on Meta's enormous profit margins, its alleged ability to impose a high "cost" in the form of a high volume of ads and reduced quality, and its alleged ability to differentiate that ad load. Judge Boasberg said there are alternative explanations for Meta's high profits, which the FTC's experts never analyzed. "The agency did not even show that Meta's profits are greater than other successful tech firms," he said. He also said that "Meta's apps have continuously improved," even as ad load has increased, so it's "not clear that the company has reduced quality overall," and he said increases in ad quality may offset assertions that those ads hurt the user experience. The judge also wrote off claims of user dissatisfaction as having more to do with brand perception than user experience. And he similarly said that the idea that Meta has degraded quality by reducing the amount of friends and family content people see "makes no sense," because people are overall doing less sharing as social media use evolves. The FTC's claims of indirect evidence fared no better as Judge Boasberg looked to the market of today, not the past in which he said the FTC was anchored. According to Judge Boasberg, Meta cannot exercise monopoly power because the evidence "resoundingly" demonstrates that "consumers treat TikTok and YouTube as substitutes for Facebook and Instagram," especially at times when Meta or TikTok became unavailable or in an experiment where Meta paid users not to use its apps and tracked where they went instead. "When consumers cannot use Facebook and Instagram, they turn first to TikTok and YouTube. When they cannot use TikTok or YouTube, they turn to Facebook and Instagram. That evidence leaves the court with no doubt that TikTok and YouTube compete with Meta's apps," he said. And that competition, Judge Boasberg said, is fierce, and enough to "prevent the defendant from exercising monopoly power," including based on the billions Meta has spent to compete with TikTok and YouTube, especially through the development of Reels. "When the evidence implies that consumers are reallocating massive amounts of time from Meta's apps to these rivals and that the amount of substitution has forced Meta to invest gobs of cash to keep up, the answer is clear: Meta is not a monopolist insulated from competition," he said. "The court finds the evidence favoring Meta on this issue both credible and convincing." Judge Boasberg based his calculation of market share on time spent on the various apps, ultimately concluding that Meta could not have a monopolistic share — the number itself was redacted, but the opinion quoted a Ninth Circuit opinion in asserting that "market share under 50% is 'below any accepted benchmark for inferring monopoly power from market share.'" The number changes when excluding YouTube, whose inclusion in the market "is concededly more debatable," Judge Boasberg said. But it still didn't put Meta into monopoly territory. The FTC is represented in-house by Daniel J. Matheson, Krisha Cerilli, Nathan Brenner, Patricia Galvan, Maria M. DiMoscato, Robert Zuver, Peter Taylor, David Brunfeld, Ario Fazli, Erin Frake, Melissa Ihnat, Alicia Loh, Gary Mitchell London, Justin Lorber, Karen Goff, Owen Masters, Noel Miller, Njeri Mugure, Danica Noble, Stephen Pearson, Benjamin Rashkovich, Michael Smith, Jennifer Tarr, Oren Vitenson, Barrett Anderson and Nicholas Widnell. Meta is represented by Mark C. Hansen, Aaron M. Panner, Geoffrey M. Klineberg, Ana Nikolic Paul, Lillian V. Smith, Aaseesh P. Polavarapu, Hannah D.C. DePalo, Hilary M. Weaver, Evan T. Leo, Kevin B. Huff, Kevin J. Miller, Leslie V. Pope and Alex A. Parkinson of Kellogg Hansen Todd Figel & Frederick PLLC, James P. Rouhandeh and Michael Scheinkman of Davis Polk & Wardwell LLP, and Sonal N. Mehta and David Z. Gringer of WilmerHale. The case is Federal Trade Commission v. Meta Platforms Inc., case number 1:20-cv-03590, in the U.S. District Court for the District of Columbia.

Nov 18

9 min

A federal antitrust campaign against major technology platforms suffered a significant blow Tuesday with a D.C. federal judge's rejection of a Federal Trade Commission suit accusing Meta Platforms of illegally monopolizing social media through its purchases of WhatsApp and Instagram. A D.C. federal judge's ruling in favor of Meta represents the first loss on the merits for antitrust enforcers pursuing a string of monopolization cases against Big Tech. (Photo by Klaudia Radecka/NurPhoto via AP) U.S. District Judge James E. Boasberg didn't let the FTC get past the threshold question of whether the Facebook successor has a monopoly, finding that Meta Platforms Inc. competes widely in a crowded field of social media companies, a field he said has been heavily redrawn in recent years, especially by TikTok. "With apps surging and receding, chasing one craze and moving on from others, and adding new features with each passing year, the FTC has understandably struggled to fix the boundaries of Meta's product market. Even so, it continues to insist that Meta competes with the same old rivals it has for the last decade, that the company holds a monopoly among that small set, and that it maintained that monopoly through anticompetitive acquisitions," Judge Boasberg said. "Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The court's verdict today determines that the FTC has not done so." Judge Boasberg rejected FTC efforts to paint Meta into a narrow corner for personal social networking connecting friends and family, a field where it says Meta's only competitors are Snap and MeWe, while excluding TikTok and other social media companies. "While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down," Judge Boasberg said in the 89-page ruling. Meta welcomed the decision and its recognition that the company "faces fierce competition." "Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the administration and to invest in America," a Meta spokesperson said in a statement. The company did not immediately respond to a follow-up question asking if the reference to the Trump administration is an attempt to curry favor and avoid an appeal. The FTC turned more explicitly to politics in its own statement, referencing the push by Republican lawmakers to impeach Judge Boasberg, driven by ire over his orders against Alien Enemies Act deportations and on subpoenas for the records of GOP lawmakers as part of the investigation into Trump's alleged efforts to overturn the 2020 election. "We are deeply disappointed in this decision. The deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment. We are reviewing all our options," FTC spokesperson Joseph Simonson said in a statement. FTC Chairman Andrew Ferguson has previously voiced full-throated support for the litigation. The ruling represents the first loss on the merits for antitrust enforcers pursuing a string of monopolization cases against Big Tech. The U.S. Department of Justice has so far won both its cases targeting Google's search and advertising placement technology businesses. Google is expected to appeal the search case, where it managed to avoid the DOJ's most sweeping remedies, and it is expected to similarly contest its ad tech loss after the Virginia federal judge imposes remedies. In the wings is a DOJ case against Apple and an FTC case against Amazon.com Inc. And an aggressive posture adopted by antitrust enforcers during the first Trump administration has materialized in an array of other major cases against the likes of Live Nation, Visa, RealPage, Agri Stats, John Deere, Southern Glazer's Wine and Spirits LLC and pesticide giants Syngenta and Corteva. The FTC case against Meta was the second to be filed in the new wave of monopolization lawsuits that followed a roughly two-decade hiatus in enforcer actions brought under Section 2 of the Sherman Act. Filed in December 2020, two months after the DOJ targeted Google search, the FTC suit accused Meta of buying Instagram in 2012 and WhatsApp in 2014 in order to head off direct competition with Facebook. According to the FTC, Meta feared the juggernauts the companies would become. It allegedly worried WhatsApp would expand from its messaging app roots into a direct rival to Facebook, and the social media giant allegedly deliberately stifled the growth of both companies to keep them from cannibalizing Facebook. But because his decision came down entirely to market definition, in a market where both sides agree WhatsApp does not now compete, Judge Boasberg said Tuesday that "WhatsApp is not relevant to what follows and will now disappear from the case." To try to prove that case, the FTC spent six weeks in the spring of 2025 questioning a series of Meta executives, starting with CEO Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, alongside expert witnesses and representatives of social media companies. The agency's main goal was to show that sharing with friends and family remains a prime use case for Facebook, Instagram and WhatsApp, one that distinguishes the Meta apps from ostensibly more entertainment-focused social media companies like TikTok, YouTube and X Corp. From there, the agency tried to show that Meta deliberately stifled its properties. But Judge Boasberg noted that the time users spend on friends and family content has declined precipitously over the years, down to 17% for Facebook and 7% for Instagram, meaning "friends' content has withdrawn from the main feature to a smaller ingredient in a blend." That content has been replaced by short-form videos, the judge said, pointing in particular to Meta's Reels feature, where content is based entirely on "unconnected" accounts that users haven't friended or followed. "The FTC contends that Facebook, Instagram, and Snapchat form a distinct market that can be identified by those apps' unique features. While those apps certainly show some distinct markings, they mostly resemble two other social-media apps that the FTC insists must be excluded: TikTok and YouTube," he said. "Their dominant features are identical, people mostly use all four to watch unconnected content that they can send in direct messages, industry participants agree that the apps belong in the same competitive market, they use similar resources and technologies, and they charge the same [free] price to the same customers." A key FTC witness was New York University School of Law professor C. Scott Hemphill. But Judge Boasberg said Tuesday that it "seems unlikely" the agency's lead economics expert "could have approached his task with an open mind," given his lobbying for antitrust enforcers to pursue Meta in the first place. "Once Hemphill was brought on, the court doubts that he weighed the evidence objectively. Instead, it was almost as if the FTC had put one of its own lawyers on the stand," Judge Boasberg said. The judge nevertheless did not reject Hemphill's testimony outright. Instead, he said Hemphill's opinions "do not persuade on the merits." Meta had argued at trial that it's done nothing to shortchange the apps but instead gave them the resources they needed to grow to the powerhouses they are today. And it repeatedly argued that Meta, TikTok and YouTube all see one another as rivals and competitive constraints. Judge Boasberg agreed, concluding that TikTok "put enormous competitive pressure on Meta" soon after its U.S. launch in 2018, including by driving the addition of Reels on Facebook and Instagram, "copying TikTok to keep users on Meta's apps." Judge Boasberg also referenced the "convergence" of Meta, TikTok and YouTube as they met somewhere in the middle between entertainment and connecting with friends and family, with mobile apps that look virtually identical and provide virtually identical sharing options. "The possibilities opened by technology, the responses by users, and the competitive choices of the apps have combined to push Facebook, Instagram, TikTok, and YouTube into similar social-media experiences," he said. In rejecting the FTC's claims of monopoly, and thus short-circuiting an effort to force the divestiture of WhatsApp and Instagram, Judge Boasberg also rejected the FTC's bid to argue it doesn't matter if Meta has a monopoly right now. Where the FTC had argued in its post-trial briefing that it can seek an injunction as long as Meta violated the law in the past and that violation continues to harm competition, Judge Boasberg said the FTC Act only allows the agency to pursue "current or imminent legal violation." Judge Boasberg additionally rejected FTC claims of direct evidence of monopoly based on Meta's enormous profit margins, its alleged ability to impose a high "cost" in the form of a high volume of ads and reduced quality, and its alleged ability to differentiate that ad load. Judge Boasberg said there are alternative explanations for Meta's high profits, which the FTC's experts never analyzed. "The agency did not even show that Meta's profits are greater than other successful tech firms," he said. He also said that "Meta's apps have continuously improved," even as ad load has increased, so it's "not clear that the company has reduced quality overall," and he said increases in ad quality may offset assertions that those ads hurt the user experience. The judge also wrote off claims of user dissatisfaction as having more to do with brand perception than user experience. And he similarly said that the idea that Meta has degraded quality by reducing the amount of friends and family content people see "makes no sense," because people are overall doing less sharing as social media use evolves. The FTC's claims of indirect evidence fared no better as Judge Boasberg looked to the market of today, not the past in which he said the FTC was anchored. According to Judge Boasberg, Meta cannot exercise monopoly power because the evidence "resoundingly" demonstrates that "consumers treat TikTok and YouTube as substitutes for Facebook and Instagram," especially at times when Meta or TikTok became unavailable or in an experiment where Meta paid users not to use its apps and tracked where they went instead. "When consumers cannot use Facebook and Instagram, they turn first to TikTok and YouTube. When they cannot use TikTok or YouTube, they turn to Facebook and Instagram. That evidence leaves the court with no doubt that TikTok and YouTube compete with Meta's apps," he said. And that competition, Judge Boasberg said, is fierce, and enough to "prevent the defendant from exercising monopoly power," including based on the billions Meta has spent to compete with TikTok and YouTube, especially through the development of Reels. "When the evidence implies that consumers are reallocating massive amounts of time from Meta's apps to these rivals and that the amount of substitution has forced Meta to invest gobs of cash to keep up, the answer is clear: Meta is not a monopolist insulated from competition," he said. "The court finds the evidence favoring Meta on this issue both credible and convincing." Judge Boasberg based his calculation of market share on time spent on the various apps, ultimately concluding that Meta could not have a monopolistic share — the number itself was redacted, but the opinion quoted a Ninth Circuit opinion in asserting that "market share under 50% is 'below any accepted benchmark for inferring monopoly power from market share.'" The number changes when excluding YouTube, whose inclusion in the market "is concededly more debatable," Judge Boasberg said. But it still didn't put Meta into monopoly territory. The FTC is represented in-house by Daniel J. Matheson, Krisha Cerilli, Nathan Brenner, Patricia Galvan, Maria M. DiMoscato, Robert Zuver, Peter Taylor, David Brunfeld, Ario Fazli, Erin Frake, Melissa Ihnat, Alicia Loh, Gary Mitchell London, Justin Lorber, Karen Goff, Owen Masters, Noel Miller, Njeri Mugure, Danica Noble, Stephen Pearson, Benjamin Rashkovich, Michael Smith, Jennifer Tarr, Oren Vitenson, Barrett Anderson and Nicholas Widnell. Meta is represented by Mark C. Hansen, Aaron M. Panner, Geoffrey M. Klineberg, Ana Nikolic Paul, Lillian V. Smith, Aaseesh P. Polavarapu, Hannah D.C. DePalo, Hilary M. Weaver, Evan T. Leo, Kevin B. Huff, Kevin J. Miller, Leslie V. Pope and Alex A. Parkinson of Kellogg Hansen Todd Figel & Frederick PLLC, James P. Rouhandeh and Michael Scheinkman of Davis Polk & Wardwell LLP, and Sonal N. Mehta and David Z. Gringer of WilmerHale. The case is Federal Trade Commission v. Meta Platforms Inc., case number 1:20-cv-03590, in the U.S. District Court for the District of Columbia.

Nov 18

10 min

A California federal judge overseeing discovery in litigation against social media giants over their impact on youth mental health rejected Meta's bid Monday to block a "disgruntled" former researcher from sharing information it deems attorney-client privileged in an upcoming deposition. U.S. Magistrate Judge Peter H. Kang issued an oral ruling from the bench during a hearing in San Francisco over Meta Platforms Inc.'s request for a protective order in connection with the upcoming deposition of former meta researcher Jason Sattizahn, who testified in September before a U.S. Senate Judiciary subcommittee hearing titled "Hidden Harms: Examining Whistleblower Allegations that Meta Buried Child Safety Research." Meta lawyer Timothy Hester of Covington & Burling LLP told the court it needed the order to protect its attorney-client privilege. He told the court Meta envisioned a situation in which Sattizahn ignores an instruction not to disclose a privileged communication. "We have no assurance that Dr. Sattizahn will respect that instruction," Hester told the court. "He's a disgruntled former employee. He's already disclosed privileged communications in testimony to Congress." Further, Sattizahn's lawyer told Meta that Sattizahn intends to testify consistent with what he told Congress, Hester said. Meta's lawyer said he also expects Sattizahn to "volunteer" privileged legal advice during the deposition. "These are foreseeable scenarios that we submit warrant a protective order," Hester told the court. After all, Sattizahn already disclosed to Congress information about what Meta's counsel told him when he was an employee, Hester said. Those disclosures related to "advice he received about research he was conducting" for the company, the Meta lawyer told the court. Meta asked the court for an order requiring Sattizahn to follow instructions from Meta's counsel when he's asked not to answer questions deemed protected by attorney-client privilege and not volunteer testimony about the legal advice he received while he was a Meta employee. The protective order should also say that plaintiffs can't ask about the privileged communications disclosed to Congress or other privileged advice Sattizahn received as a Meta employee. A lawyer for personal injury plaintiffs and school district plaintiffs in the litigation, Lexi Hazam of Lieff Cabraser Heimann & Bernstein LLP, told Judge Kang that a presumptive court order is not appropriate. "Mr. Sattizahn cannot respect and does not have to respect a privilege that doesn't apply or exist," Hazam said. "Meta presumes that it does." Hazam told Judge Kang that Meta is likely seeking the order because a District of Columbia Superior Court judge recently held that certain documents are not shielded by attorney-client privilege due to the so-called crime-fraud exception. If Sattizahn testifies that Meta's legal department advised that the company's research on kid safety or mental health on its platform "should be altered, suppressed or erased due to a risk of liability, that evidence of spoliation overcomes any privilege," Hazam told the court. The lawyer for the plaintiffs also told Judge Kang that a New Mexico court in the MDL has already ordered that a transcript of Sattizahn's deposition remain sealed until that court rules on any objections based on privilege brought by Meta after the deposition. This avoids the need for an overly broad order from Judge Kang that could suppress "highly relevant testimony, which goes to the core of plaintiff's case," Hazam said. Sattizahn's lawyer, Michael Ward of Baker Botts LLP, told Judge Kang that his client would respect "appropriate" assertions of attorney-client privilege. He also said that Sattizahn plans to testify about his communications with Meta's in-house counsel when he was a researcher for the company. "He's been directed by the New Mexico court to do so," Ward said. "He is going to testify that he was directed to change research protocols by lawyers to avoid collecting evidence of harms," Ward said. "The company did not want to possess any evidence that these harms were occurring." Meta's lawyer told Judge Kang that the New Mexico procedure didn't do enough to prevent the disclosure of confidential communications to a wide variety of jurisdictions. The judge said later in the hearing that he wouldn't grant the protective order Meta sought because of the New Mexico court order governing the deposition. "I'm hesitant to create a separate procedure when the New Mexico has already set one up," Judge Kang said, later adding, "I defer to what the New Mexico judge has done." The MDL involves personal injury plaintiffs, schools and attorneys general who claim that Meta Platforms Inc., YouTube LLC and other social media giants design their multibillion-dollar revenue-generating social media platforms to be addictive, to the detriment of minors' health and livelihoods. In a filing to the court last month, the school districts told the court that Meta clamped down on internal research showing that the mental health of young users suffered from compulsive use of its social media platforms, even as staff likened themselves to drug pushers. The personal injury plaintiffs and school district plaintiffs were represented by Lexi J. Hazam of Lieff Cabraser Heimann & Bernstein LLP and Previn Warren of Motley Rice LLC. Meta is represented by Timothy C. Hester, Ashley M. Simonsen and Paul W. Schmidt of Covington & Burling LLP and James P. Rouhandeh of Davis Polk & Wardwell LLP. Jason Sattizahn is represented by Michael W. Ward of Baker Botts LLP. The MDL is In re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, case number 4:22-md-03047, in the U.S. District Court for the Northern District of California.

Dec 1

4 min