FTC and Meta Clash in Federal Court Over Discovery Dispute

Mark Zuckerberg

Mark Zuckerberg at the Munich Security Conference (MSC) 2020

Just less than a week ago, the Federal Trade Commission reported that Facebook’s parent company Meta made a “shocking” concession that half of their privilege claims from a sample were “unfounded.”

The revelation prompted a federal judge to take action on Monday afternoon, ordering Meta’s lawyers to analyze a 2,500-entry sample of privilege claims by the end of January.

Disagreeing with Meta’s attorneys characterization of the request “inappropriate” and “burdensome,” U.S. District Judge James Boasberg called the FTC’s proposal “reasonable” during a telephone conference. He declined to accept Meta’s position that the privilege designations should remain in place to remain on course for the looming discovery deadline on Jan. 5, 2023.

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

The judge’s oral ruling during a brief telephone conference on Monday gives regulators another opportunity to glean a large tranche of documents that they believe Meta “wrongfully” withheld.

“The FTC is gravely concerned by indications that Meta is wrongfully withholding tens of thousands of probative documents based on unfounded claims of privilege,” Daniel Matheson, from the FTC’s bureau of competition, wrote in a five-page filing on Nov. 23.

Nearly 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 soon after the case proceeded to discovery.

The FTC noted that its request for Meta to review 2,500 privilege entries related to key witnesses represented less than one percent of the company’s privilege claims.

Meta’s lawyer Geoffrey M. Klineberg complained that regulators do not bear any reciprocal burden.

“It’s a completely one-sided effort,” Klineberg said during the hearing.

In his written filing from last week, he wrote: “This kind of last-minute, unspecified, blanket demand is entirely inappropriate, and the Court should reject it out of hand.”

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

“The FTC’s demand that Meta expedite re-review of 2,500 Log entries during the winter holidays is also inappropriate because it is disproportional and unduly burdensome,” the filing stated.

Meeting the company’s lawyers halfway, Boasberg allowed for a more relaxed schedule than the FTC’s proposed deadline of completion by Jan. 9, 2023. He said that 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 two-fold. Regulators say that Facebook muscled out competition for personal social networking services by acquiring competitors and potential competitors, such as Instagram and WhatsApp. They also claim that Facebook implemented policies that prevented it from operating with other apps the company viewed as nascent threats.

Boasberg had dismissed an earlier version of the lawsuit before the FTC amended the complaint. That second iteration apparently passed the judge’s muster, leading him to introduce his ruling favoring the FTC with the quip: “Second time lucky?”

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

(Photo by Johannes Simon/Getty Images)

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