A group of companies behind now-defunct apps is suing Facebook, alleging that the company took part in an “anticompetitive scheme” that destroyed their business prospects.
NBC News reports that a group of app developing companies has proposed a class action lawsuit against social media giant Facebook which alleges that the company took part in an “anticompetitive scheme.” The lawsuit is reportedly based on leaked documents from the defunct app developer Six4Three which were obtained by NBC News last year.
The 7,000 pages of documents appeared to show that Facebook CEO Mark Zuckerberg and other company executives used Facebook’s dominant market position to force potential rivals and competitors out between the years of 2011 and 2015. “This action seeks to halt the most brazen, willful anticompetitive scheme in a generation — a scheme that verges on final, irreparable completion as of the date of this Complaint,” the complaint alleges. “Facebook stands today as a paragon of unbridled market power.”
Facebook has denied the allegations and stated that the lawsuit has no legal basis with a spokesperson stating: “We operate in a competitive environment where people and advertisers have many choices. In the current environment, where plaintiffs’ attorneys see financial opportunities, claims like this aren’t unexpected but they are without merit.”
In a statement from Paul Grewal, Facebook’s vice president and deputy general counsel, from April the VP alleged that Six4Three’s documents were “cherry-picked.” Grewal stated: “The set of documents, by design, tells only one side of the story and omits important context. We still stand by the platform changes we made in 2014/2015 to prevent people from sharing their friends’ information with developers like the creators of Pikinis.”
The companies suing Facebook include Reveal Chat, a messaging app; Lenddo, a lending service; Cir.cl, an online marketplace; Beehive, an identity verification service; and LikeBright, a matchmaking app.
Yavar Bathaee, an attorney for the defunct apps, said in a statement: “Facebook faced an existential threat from mobile apps. It could have responded by competing on the merits, but it instead chose to use its might to intentionally eliminate its competition. Facebook deliberately leveraged its developer platform, an infrastructure of spyware and surveillance, and its economic power to crush or acquire anyone that competed with them.”
Ashkan Soltani, a former technologist at the FTC, who now works as an independent privacy researcher, commented on the lawsuit stating: “It lays out, very clearly, the critical intersection of privacy and antitrust. The plaintiffs argue, I think reasonably, that Facebook used access to user data as both a predatory and exclusionary tool — relying on data collected from users to identify what apps/markets to move into and simultaneously shutting out competitors by restricting their access to the Facebook API.”